The role grad students play in overall student loan figures

Grad School Costs Are on the Rise

Does your business pay special attention to student loans among those who are borrowing for graduate school? If not, a recent story from CNN Money might be cause for your company or bank to think more critically about this subgroup.

The source cites the findings of the New America Foundation, which indicates that grad student debt seems to be on the rise. This perhaps point to some potentially damaging trends in the future for these borrowers. The article quotes the author of a recent report from that organization, Jason Delisle, who speculated on where this might be coming from.

“Are graduate students thinking: I’ve got less money to get a graduate education, so I should borrow more?” Delisle wonders. “My employment prospects look worse, so should I borrow more? That’s problematic.”

However, while graduate programs in general seem to be leading to a higher level of debt among borrowers, Bloomberg Businessweek pointed out a different angle on the same situation by noting that the study seemed to pay less attention to MBA programs.

During the eight-year period measured by their research, while debt for law school students shot up to an average of $140,000 per person, debt levels for MBA candidates stayed more or less the same at the humbler figure of $40,000.

Writing for Bloomberg, Patrick Clark asserts that one of the reasons for this disparity may be that MBA students are “paying for their degrees with money saved from their early professional careers.”

Lenders still need to make sure that suitable application processing is performed for all borrowers to make sure there are no problems with repayment later on.

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