How to Make Master’s Degrees More Affordable

Earning a master’s degree can be a career-altering decision, accelerating your advancement and opening doors to new opportunities. But it might also saddle you with crippling debt.

How can universities and the federal government make master’s degrees more affordable for the growing number of students who pursue them each year?One national organization has a few ideas.

If you’re thinking about pursuing a master’s degree, you have plenty of company. The credential has become increasingly popular over the past decade or so. According to the National Center for Education Statistics (NCES), the number of master’s degrees conferred grew 19% from 2011-2021.

That trajectory hasn’t been consistent across all fields, however. The number of master’s degrees awarded in education dropped 17% during that span, while those awarded in health professions grew by 89%. Computer and information sciences saw the largest growth, with a whopping 178% increase over that decade, per NCES.

The takeaway is rather simple: More people are earning master’s degrees.

And they’re doing so despite the high cost. On average, a two-year master’s program will run you just over $62,000, which includes tuition, fees, books, and living expenses.

Costs do range considerably by school, field, and type of program (online, hybrid, on-campus). On the low end, an online master’s program can cost as little as $4,000-$7,000 per year. Two years at Harvard Business School, on the other hand, will set you back $230,000.

Likewise, the return on that investment varies widely, according to the National Association of Colleges and Employers. The mean starting salary for master’s graduates in computer engineering is more than $113,000, while someone earning a master’s in library science can expect about $46,000.

Given these costs, it’s no wonder students are taking out more loans to finance their education. A new Department of Education report reveals that graduate student loan disbursements last year accounted for 47% of total loan volume, an all-time high, even though graduate students constituted only 21% of all borrowers.

The report projects that graduate loans may soon comprise the majority of federal student loan disbursements.

Heaping graduate loans upon existing undergraduate loans can be a recipe for financial distress. What, if anything, can be done to make master’s degrees more affordable for the growing number of students pursuing them?

It turns out the Council of Graduate Schools (CGS), a national association aimed at advancing graduate education, has a number of ideas. As part of its “Master’s Degrees at Work” campaign, which promotes the individual and societal benefits of master’s degrees, the Council has put forward several policy recommendations that would make graduate education more affordable.

Specifically, the Council’s recommendations include the following:

Graduate students are not eligible for Pell Grants, which are awarded only to undergraduate students with significant financial need. The current award is $7,395 annually.

The CGS wants students to be able to apply any unused funding toward graduate education.

In 2016, nearly 46% of first-year graduate and professional students were Pell recipients, the Council points out. That year, about 70% of former Pell recipients in their first year of graduate education took out student loans to fund their graduate program, compared to 37.6% of those who never received a Pell Grant.

More than one-third (34.6%) of former Pell recipients pursuing graduate education didn’t exhaust the allowable 12 semesters of support during their undergraduate education, meaning they had funds left over but couldn’t apply them to graduate school.

The Expanding Access to Graduate Education Act, introduced in 2021, would enable graduate students who received Pell Grants as undergraduates to roll over the remaining Pell money toward graduate school, assuming they remained income-eligible.

The bill is still pending in Congress.

One recommendation is to reinstate Subsidized Direct Loans for graduate students. Thanks to the Budget Control Act of 2011, graduate students are not eligible to receive subsidized federal loans. They can take out only unsubsidized loans, which have higher interest rates than subsidized loans. And unlike subsidized loans, unsubsidized loans accrue interest while students are in school.

The pending Protecting Our Students by Terminating Graduate Rates That Add to Debt (POST GRAD) bill, introduced in 2021, would make subsidized loans available to graduate students.

The CGS also recommends eliminating student loan origination fees. Known as a “student loan tax,” origination fees are a percentage of the loan amount charged by lenders for loan processing. Fees range from 1-4% depending on the type and amount of the loan.

The GAANN program provides three-year fellowships to graduate students in “fields of national interest” such as cybersecurity, artificial intelligence, biological sciences, and psychology, among others. From 2011-2021, federal funding for this program decreased from $30 million to $23 million, while the number of awards dropped by 50%.

To fuel research and innovation, argues the CGS, Congress should allocate $35 million for this critical program beginning with the next budget cycle.

Should attending graduate school be tax-deductible? The Council thinks so.

Among its recommendations are 1) strengthen the ability of employers to provide tax-exempt tuition assistance, and 2) exclude tuition waivers and remissions, along with grant aid, as taxable income.

At the same time, making graduate education more affordable begins with universities themselves, which bear responsibility for driving up costs and failing to satisfy students’ financial needs, argues CGS leadership.

“Universities are taking a really hard look at what they can do to constrain the cost of graduate education, or at least slow down its rate of increase,” Suzanne Ortega, CGS’s president, told BestColleges.