Page 20 - August 2021 Issue.indd

DOLLARS AND SENSE by Tolbert Rowe

Graduate Level College Debt Skyrockets

recent article in the Wall for the first time in history graduate I completely understand the desire to
Street Journal by Melissa students are on track to have borrowed achieve as much education as one can.
Korn and Andrea Fuller as much as undergraduates in the 2020- More education means higher lifetime
exposed how colleges 2021 academic year according to Federal earnings, this is a proven fact. What I

n
a
A d universities have Data. am finding more diffi cult to understand
awarded thousands of graduate degrees is why we have a system of financing
Now I want to pause and let this factoid
that provide a fraction of income aft er higher education based on the dreams
sink in a little, and I will restate. For
graduation in relation to the debt taken and aspirations of our young people
the first time in history the dollar
on to acquire the degree, according to without any accountability of the success
amount of student loans lent to
US Education Data. of the end product, the graduate.
graduate students will equal what is
Columbia University in New York was lent to all undergraduate students. On Shouldn’t all colleges be held accountable
singled out in the article because their average there are 4 to 5 times more for the success of their graduates,
Masters in Fine Art’s graduates had the undergraduate students than graduate regardless of whether it is and Associates
highest student loan debt in relation to students. Hence the result of an ever- Degree, Bachelor’s Degree or Master’s

income. They had a median of $181,000 expanding number of graduate school Degree?
in debt and f of their graduates were programs with an unlimited pool of We have seen an increase over the last
making less than $30,000 per year, 2 money for grad students to borrow from. several years of Federal monitoring
years after graduation. In very basic This situation sounds so familiar to the of primarily for-profit schools of

terms they got their Master’s Degrees but mortgage market of the early 2000’s higher education and the success of
were saddled with 6 times their annual when there was an overabundance their graduates. Several have been
gross income in debt.
of loan programs that had very lax held accountable and shut down.
Six figure student loan balances are requirements for qualifying. Low Pandemic adjustments to the delivery
no longer the exception for Master’s income? No problem, do a no income of instruction have and I believe will
Program graduates. The Grad Plus verification loan. No assets? No problem, put further pressure on colleges and

loan program created by Congress in do a no asset verification loan. Low universities to justify their expense.
2005 opened a cash drawer for Colleges credit scores? No problem, you will just
and Universities, by allowing students have to pay a higher interest rate. Have There is no question that the more
to borrow tuition, room, and board all three of these issues? No problem, education one receives translates to
without limit. Most loan programs for just pay a high interest rate. higher lifetime earnings. There is no
undergraduates have limits. question that achieving more education
The issue becomes, in both situations the comes at a price unless you are blest

And as one would expect, since 2005 the debt must be repaid. If it isn’t then there to get scholarships and grants. And
number of graduate programs off ered are consequences there is no question that if you can fog
has exploded to such an extent that a mirror while breathing on it and you
are accepted at an institution of higher
learning you can borrow your way
to achieve it. Hence the $1.6 Trillion
“Your Mortgage Consultant Since 1985”
and growing balance of students loans
Purchase or Refinance outstanding.

But is all this debt to acquire a higher
education, and hence higher lifetime
earnings actually worth it?

Data is showing that there is a direct
115 E Dover St. Ste 3 - Easton, MD correlation between those with lower
tolbert@baycapitalmortgage.com C. Tolbert Rowe, student loan balances at graduation and
www.baycapitalmortgage.com NMLS Vice President/Lending their feeling that a degree was worth
182844
it and those who graduate with high
410-819-3005 / cell 410-310-3520

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