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Many of the frightening stories you hear about millennials taking on staggering amounts of student loan debt — $50,000, $100,000, or more — are actually about graduate student loans.
Here are the latest statistics from the National Center for Education Statistics on average grad school debt among recent graduates in the following fields:
- Master of Business Administration (MBA): $54,140
- Master of arts: $57,130
- Research doctorate: $109,560
- PhD in education: $109,820
- Law school: $139,580
- Medical school: $240,800
Read on for more details on how much debt students typically take on when pursuing a master’s, doctorate, or professional degree in various fields of study:
- Graduate student federal loan debt
- Average grad school debt by degree
- How to Manage Grad School Debt
Graduate student federal loan debt
Graduate students represent about 16% of students enrolled at colleges and universities, but 47% of federal student loan debt belongs to graduate student borrowers, according to College Board data.
The amount of debt that graduate school students take on is determined not only by their personal finances, but the cost of attendance at their chosen school and the type of degree they’re pursuing. But federal loans for grad students have some limits. Depending on the type of loan and degree, graduate students can borrow up to:
- Federal direct loans: $138,500 (no more than $65,500 in subsidized loans)
- Federal direct loans for medical, dental, or veterinary students: $224,000
- Federal PLUS loans: Up to school’s cost of attendance
Average grad school debt by degree
According to the latest numbers from the U.S. Department of Education, this is the average graduate school debt among recent graduates who borrowed to earn a post baccalaureate certificate, master’s, doctoral, or professional degree:
- Average grad school loan debt: $76,620
The amount of debt varies according to the type of degree earned. Here’s the average cumulative debt for recent graduates who borrowed to earn the following degrees:
- Postbaccalaureate certificate: $54,090
- Master’s degree: $50,290
- Research doctorate: $101,490
- Education doctorate: $101,730
Keep in mind these numbers don’t include any additional debt borrowers might have from their undergraduate education.
Master’s degree debt by program
In addition to the type of degree, the amount of debt taken on by students can depend on the program or course of study they enroll in. Here are the latest numbers from the Department of Education on graduate school debt for recent master’s degree earners, by program:
- Master of education: $45,080
- Master of science (MS): $51,770
- Master of business administration (MBA): $54,140
- Master of arts (MA): $57,130
Doctoral degree debt by program
A doctoral degree is the most expensive type of grad school degree, but the debt that students take on can vary by program. Some degrees take longer to earn than others, and some offer students opportunities to defray their costs by teaching or conducting research while they’re still in school.
Here are the latest numbers from the Department of Education on graduate school debt for recent graduates who borrowed to earn a doctoral degree, by program:
- PhD (non education): $104,450
- Education (any doctorate): $109,820
- Medicine (MD or DO): $240,800
- Other health-related doctorate: $205,450
- Law (LLB or JD): $154,230
- Other doctorate (non-PhD): $140,160
Graduate school debt by school type
Another factor affecting how much debt students take on in the course of earning their graduate degree is the type of school they attend — a taxpayer-funded public school, a private nonprofit, or a private for-profit.
Here’s how average debt of recent graduates varies according to degree type and school, according to NCES data:
Analysis: In general, graduates of public schools take on the least debt, while those attending nonprofit private schools take on more. While it’s not always the case, graduates of for-profit private schools tend to have the highest average debt.
Trends in graduate school borrowing
Even after adjusting for inflation, data collected by the Department of Education’s National Center for Education Statistics shows a startling increase in the debt taken on to earn some graduate degrees.
Here’s how much average student loan debt has increased since 1999-2000 for recent graduates earning degrees in these areas:
- MBA: +27.57%
- Master’s (all): +64.17%
- Law school: +77.47%
- Medical school: +101.47%
- Research doctorate: +108.13%
Annual grad school borrowing
Although they represent only 15.6% of students enrolled in colleges and universities, grad students take out about 47% of federal student loans — $39 billion in 2020-21, according to the College Board.
Even after you adjust for inflation, that’s still a major increase in borrowing in the last 15 years. As of the 2005-2006 school year, graduate students only borrowed $24.1 billion in federal student loans annually, which constituted only 32% of all federal student lending.
Average time to complete grad school
Why do students pursuing professional degrees rack up nearly twice as much debt as those earning research doctorates, and close to three times as much as those earning master’s degrees?
For one thing, a master’s degree usually requires only one to two years of full-time academic study. Some students also hold down a job while pursuing degrees like a master’s in business administration (MBA).
Students who enroll in law school full-time are expected to graduate in three years, while medical school takes four years — plus an additional three to seven years as a supervised (and relatively low-paid) resident doctor.
A research or scholarly doctoral degree program is typically designed to be completed in four to six years, but often takes longer. The median time to complete grad school and earn a doctorate — meaning half of all students will take longer and half will take less time — was 7.3 years in 2016, the most recent numbers available from the National Science Foundation. Time to earn a degree varies considerably by field: :
- Physical and earth sciences: 6.1 years
- Life sciences: 6.7 years
- Engineering: 6.5 years
- Computer science and mathematics: 6.9 years
- Psychology and social sciences: 7.9 years
- Humanities and arts: 9.3 years
- Education: 11.7 years
Even though they may take longer than professional students to earn their degrees, students pursuing research and scholarly doctorates often have opportunities to work as research or teaching assistants, reducing their costs and need to borrow.
Grad school debt and earning potential
Although many graduate students take on what seems like frightening amounts of debt, the degrees they earn typically provide an earnings boost that makes repaying their loans manageable. In fact, it’s borrowers who take out relatively small amounts of student loan debt, but fail to complete their degree, who are the most likely to default on their loans.
So graduate students need to weigh the amount of debt they’re willing to take on against what they can expect to earn with their degree.
The majority of student loan borrowers owe less than $50,000, according to a Brookings Institute analysis of the National Student Loan Data System data. But as you can see from the numbers above, grad students borrowing for masters degrees and doctorates can easily rack up six-figure debt.
Although professional degrees often lead to higher levels of student loan debt, they can also lead to higher earnings that can add up over the course of a lifetime.
The chart below — based on a 2021 study by the Georgetown University Center on Education and the Workforce — demonstrates the impact education has on lifetime earnings potential. A master’s degree provides a 14% boost in median lifetime salary compared to a bachelor’s degree. But workers with professional degrees earn about 68% more than their colleagues with a bachelor’s degree do.
Among borrowers investigating refinancing their student loan debt, we’ve found that holders of advanced degrees in finance and public policy have more manageable levels of debt than doctors, lawyers, and pharmacists. Dentists, optometrists, and veterinarians are more likely to take on challenging levels of debt.
Interest rates on graduate student loans
Another cause for concern is that grad students pay considerably higher interest rates on federal student loans than undergraduates.
Federal student loans have three interest rate tiers. Students taking out loans for the 2021-22 academic year will pay the following rates:
- Subsidized and unsubsidized direct loans (undergrads): 3.73%
- Unsubsidized direct loans (grad students): 5.28%
- PLUS loans (grad students and parents of undergrads): 6.28%
Since 2013, rates for new federal student loan borrowers have been calibrated to 10-year Treasury notes. This means rates can fluctuate from one year to the next, as you can see from the chart below.
Once you take out federal student loans, the rate is set for life. But the 0.98 percentage point increase in rates for new borrowers from last year’s rates means more than $4,124 in extra interest payments for a borrower graduating with $91,150 in undergraduate, graduate, and PLUS loans and repaying that debt on the standard 10-year plan.
Impact of rising interest rates on cost of a degree
| Loan type | Loan balance | 2020-21 interest rate | 2021-22 interest rate | New monthly payment increase | Total interest payments increase |
|---|---|---|---|---|---|
| Unsubsidized undergraduate | $31,900 | 2.75% | 3.73% | $130 (+$6) | $2,601 (+$712) |
| Unsubsidized graduate | $48,300 | 4.3% | 5.28% | $519 (+$23) | $13,969 (+$2,760) |
| PLUS loan | $10,950 | 5.3% | 6.28% | $123 (+$5) | $3,823 ($652) |
PLUS loans for law school or medical school
Because they’re the most likely to hit the limits on Stafford loans, students seeking professional degrees in fields like law and medicine are also the most likely to resort to taking out high-interest PLUS loans. The most recent NCES data available, from the 2015-16 academic year, reveals the percentage of students who borrowed by degree type:
- Master’s degree: 39.5% took out Direct Unsubsidized Loans, 6.3% took out PLUS loans, and 5.5% took out private student loans
- Research or scholarly doctorate: 27.1% took a Direct Unsubsidized Loan, 5.7% relied on PLUS loans, and 1.9% took out private loans
- Doctorate in a professional field like law or medicine: 68.7% took a Direct Unsubsidized Loan, 39.1% took out PLUS loans, and 5.4% had private loans
Tip: Interest rates on PLUS loans are currently 6.28%. Factor in the 4.228% upfront fee and the APR on PLUS loans can exceed 7%. Some students can qualify for better rates with private lenders — particularly if applying with a cosigner — although they’ll lose access to federal borrower benefits like income-driven repayment.
Taking on extreme student loan debt
The chart below — based on Direct Loan data from the Department of Education for the first quarter of 2022 — reveals that:
- 3 out of 4 borrowers owe $40,000 or less.
- 2.8 million borrowers owe more than $100,000.
- This relatively small group of 2.8 million borrowers owe $510.2 billion (well over one-third of all outstanding federal student loan debt).
When students take on extreme amounts of debt, they often need to stretch their payments out over much longer than the standard 10-year repayment plan to make their monthly payments more affordable. The chart below shows the cost of repaying $200,000 in student loan debt in any of eight commonly used government repayment plans and compares those plans to refinancing into a private loan at a lower interest rate.
| Repayment plan | First monthly payment | Last monthly payment | Total amount repaid | Projected loan forgiveness | Monthly payments |
|---|---|---|---|---|---|
| Standard | $2,269 | $2,269 | $272,305 | N/A | 120 |
| Graduated | $1,305 | $3,914 | $292,038 | N/A | 120 |
| Extended fixed | $1,349 | $1,349 | $404,550 | N/A | 300 |
| Extended graduated | $1,079 | $1,968 | $438,954 | N/A | 300 |
| PAYE | $339 | $577 | $53,925 | $275,671 | 120 |
| REPAYE | $339 | $577 | $53,925 | $237,835 | 120 |
| IBR | $339 | $577 | $53,925 | $275,671 | 120 |
| ICR | $785 | $1,286 | $122,212 | $214,014 | 120 |
| Refinance into 5-year loan at 4.2% | $3,701 | $3,701 | $222,083 | N/A | 60 |
| Refinance into 10-year loan at 4.9% | $2,112 | $2,112 | $253,386 | N/A | 120 |
| Refinance into 20-year loan at 5.6% | $1,387 | $1,387 | $332,902 | N/A | 240 |
The calculations assume that the borrower starts repayment with $138,500 in unsubsidized federal direct loans for graduate students at 6.16% and $61,500 in PLUS loans at 7.20% (those are average rates for each type of federal student loan issued from 2006 to 2022).
Although income-driven repayment plans like PAYE and REPAYE can lead to loan forgiveness, the amount forgiven is currently considered taxable income by the IRS (forgiven amounts granted through the Public Service Loan Forgiveness program aren’t taxed).
Read more: Income Driven Repayment: Which Plan Should You Choose?
For high-earning graduate degree holders who can afford the monthly payments, refinancing into a loan with a shorter repayment term can be the quickest way to dispatch debt with the least amount of interest paid.
How to Manage Grad School Debt
Even though the majority of graduate school students turn to student loans to help them pay for their education, borrowing up to six figures in student loans is not inevitable. You have a number of ways to help you keep your costs low and manage what student debt you’ve taken on. Here are some strategies to keep in mind:
- Explore all your financial aid options. There’s no limit to the amount of money you can receive via grants and scholarships, so it pays to apply to as many as you’re eligible for.
- Talk to your employer. If you’re pursuing a graduate degree while working, your employer may help pay for your education. Talk to your HR department or supervisor to see if your workplace offers any educational benefits.
- Consider long-term payment options. If you feel you must take on a sizable chunk of student loan debt, make plans early for how you’ll handle repayment over time. If you’re launching into a relatively low-paying career, you may find that income-driven repayment could help keep your monthly payments manageable and make you eligible for eventual loan forgiveness. You may also choose to work in a lower-paying public service job for at least 10 years to qualify for Public Service Loan Forgiveness.
Emily Guy Birken contributed to this report.
