Should professional school student loans (for the entire program) be limited to the 25th (or perhaps 10th to lower risk even more) percentile pay outcome for graduates and dropouts of the specific professional school?
Rationale: it is commonly suggested that undergraduates borrow no more than the yearly pay they may find at graduation (which tends to be around the federal direct loan limit for most; yes, some majors are associated with higher pay, but students do change majors, and recessions can result in lower pay). Why not apply a similar limit to professional school?
Nobody admitted to medical school knows what specialty they will be able to paractice, since acceptance to any residency is determined by a number of things, including grades, recommendations and scores on STEP 1 and 2 tests, which they take in medical school. The highest paying specialties are generally those with the most competitive residencies. Poor STEP 1 scores will eliminate a medical student from consideration for those residencies, and thus from those highest paying specialties.
It’s comparable to people being admitted to college with the goal of becoming a doctor. Nice goal, but you don’t know if that is going to happen by simply declaring yourself to be a pre-med biology (or whatever) major.
It can work by assuming the lowest paid specialty, though using the 10th or 25th percentile eventual pay from the medical school should be a reasonable approximation of the lower paid specialties.
Of course, since the lower paid specialties pay about $200k to $240k, that means that many private and out-of-state medical schools are on the wrong side of this affordability metric for students who need to borrow the entire cost of attendance. Some in-state public medical schools may be only barely inside this affordability metric for students who need to borrow the entire cost of attendance.
That is why the pre-med should not take student loans assuming that s/he will become a physician. The federal direct loan limits for undergraduates are a more realistic limit, particularly for a biology major. Of course, a student who does go to medical school may want to avoid having any undergraduate debt at all to add to medical school debt.
No. That’s all. Just no. Data shows that graduate/professional students repay their loans. If we limit the ability of grad/professional students to borrow, we hinder their ability to get the credentials they need to do the job they have chosen to do.
And with great respect kelsmom, one of the more valuable posters on cc, I say, ‘goodie’ to your comment in #3, as we have way too many people going to grad school to get credentials for jobs that do not exist. Also true of some professional programs, i.e., law. Per the BLS, we graduate 2x the number of JD’s each year that the legal industry can absorb. Are we really helping these folks by loaning them thousands upon thousands of dollars when we know with certainty that the jobs don’t exist once they obtain a credential?
IMO, these massive loan schemes are pushed by the education establishment to better themselves primarily, and students secondarily (but way down the priority list).
Note: by “professional school”, I meant inclusive of many master’s programs of professional subject matter, including the master’s degree in social journalism that the writer with $235k debt ($70k originally from the master’s program) has. Actually, one can consider all graduate programs in this category (including PhD programs which aim for research professions, although the fully funded nature of most of them means that significant debt is much less common).
So you would be limiting most professional schools to the already well off, those whose parents would give them the money? No more working or even middle class people could afford to get an MFA, for example? So that would mean the entire next generation of arts educators would be from the upper classes, even more so than they currently are?
How about, instead of your plan, we actually fund higher education at the levels that it was for the Baby Boomer generation, so that Gen Z has a chance to achieve what their parents did?
Do you have any evidence that the over-treating dentist was driven to over treat due to his federal dental school loans vs. just common variety greed?
Do you have any evidence – other than speculative anecdotes – that federal loan debt ‘pressure’ increases ‘questionable things’?
(note, we cannot account for private loans, since that is on the lender, but at a minimum, we should change the bk laws so that private loans can be discharged.)
Unfortunately, that is the situation we have now – many professions’ education is financially inaccessible to those without wealthy parents, unless they take on a level of debt that is unwisely high compared to the expected level of income in the profession.
Ideally, that would be the case. Perhaps if professional schools could no longer entice students into taking unwise levels of debt to attend, some would lower their prices, and there would be more of a political and societal effort to reach this goal.
Most grad students don’t pay for tuition. They TA or RA and thus tuition and fees are covered, so lowering those costs wouldn’t have a measurable personal impact on grad students. Grad students’ student loans are generally used to pay living expenses, job market expenses, conference expenses, etc. because stipends are rarely sufficient to actually live on. Universities are dependent upon this low-wage TA/RA labor force, and would likely have to raise tuition for undergrads significantly if there were to reduce that labor force. I don’t think disallowing loans for grad students is really going to help improve the overall higher ed funding situation.
I would argue that anyone who is going to grad school without funding should rethink it. If they don’t want you enough to pay you a meager TA salary, you’re probably not going to be good enough to get a job in your field. I know that sounds harsh, but I feel too many people are led on in that way.
Personally, I think all loans should be guaranteed by the individual institution of higher learning. And an in person counseling session with a financial aid counselor should be required for each semester or school year a new loan is given. With a complete discussion of exactly what the loan repayments will look like, and a discussion of future earnings potential for the kids’ chosen major.
Nobody should be able to give the excuse that they didn’t know what they were getting into.
Do you have any data sources to support your thesis, or perhaps change the word from ‘most’ to "many’?
(many MA/MS programs are cash cows for the Uni, and since PhD students get first dibs on TA/RA positions, plenty of MA/MS students are full pay (via loan).
It’s a moral hazard as many (most?) of those newly-minted MFA’s will not be able to get a job as an ‘arts educator’. Are we not doing the middle class a major disservice by enabling their kids to attend a program from which they will end up in big debt with little likelihood of a job in their chosen arts field?
hahahahahaha
Sinclair Lewis: "It is difficult to get a man [Uni] to understand something, when his [and faculty] salary depends upon his not understanding it!
The average salary of a physician in training(ie medical resident) as of 2018 is about $59,000. Depending on the length of program, it could be several years before the big bucks mentioned above kick in. So depending on how many years you are counting, many medical school students would be denied loans. https://www.medscape.com/slideshow/2018-residents-salary-debt-report-6010044#1
There is no evidence that current medical students come from wealthy parents. And if they do, those parents aren’t kicking in much, as average debt is about 200K for a new graduate. https://www.nerdwallet.com/blog/loans/student-loans/average-medical-school-debt/
And there is no evidence linking fraudulent healthcare billing to student loans.
As such, there doesn’t appear to be any objective rationale for the proposed change.
Medical school is somewhat more complicated because of residency requirements. The higher paying specialties tend to also have longer residencies; loans are due and payable during residency (though they can be deferred, with interest running) – and the pay during residency is terrible. Example: average pay** for orthopedic surgeon = $365K, with entry level at about $300K. Average pay for orthopedic surgical resident - $63K. Length of residence - 5 years. So the would-be orthopedic surgeon who borrows $300K to pay for medical school has to get past 5 years of loan payment. Current rate on a graduate PLUS loan is 7.6% – which would be running $1900 in interest a month. So probably not really doable on a residents salary. So the residents end up on income-based repayment plans, which fall short of paying the interest due, and in turn accrues to the loan balance.
(** Note: I am pulling all my “average” numbers from very quick online searches - so there’s room to quibble about exact numbers – but the overall point is the same. There may be a light at the end of the tunnel for medical doctors, but it is a very long tunnel).
That is simply NOT true. My grad program was relatively small with 35 students in each class. Only 2 were students who had TA or fellowships…or research assistants.
When I did my advanced courses…in education…no one received a stipend from the university.
And in the arts, there are plenty of students getting masters degrees with NO TA or other stipends from the colleges.
So no loans for masters degrees for teachers? My sister earned a whopping $37k when she graduated with her MA in education. Her entire program was based on her taking loans and then having those loans forgiven as she taught in Title I schools for 5 years after graduation. The program worked beautifully and the ‘system’ got what they wanted, which was a teacher with an MA locked in to teaching for 5 years.
So no teachers, dancers, theater grad students get loans? No museum curators, no social workers?
The student loan program is set up to be very objective. Grad student borrowers are treated the same, they do not have to qualify to the loans, it doesn’t matter if they go to community college or to Harvard - they get to borrow $COA at X.xx% interest, and repayment it over 10 years. That’s the deal.