Credible takeaways
- The average graduate student leaves school with $77,300 in debt, or $88,220 total when combined with undergraduate loans.
- Debt levels vary widely by degree type, with medical and law graduates carrying the highest balances.
- Factors like program choice, school type, financial aid, and assistantships significantly affect how much you may need to borrow.
- Managing graduate school debt often requires exploring repayment strategies, refinancing options, and financial planning to stay on track after graduation.
Attending graduate school can put your career on a new trajectory. However, it often comes with a hefty price tag. According to the latest data from the National Center for Education Statistics, graduate students leave school with about $77,300 in graduate student loans, or $88,220 when combined with undergraduate debt.
This guide breaks down the average graduate student loan debt and its financial impact on borrowers.
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What is the average debt for graduate students?
The average graduate student finishes school with about $77,300 in student loans, according to the latest data from the National Center for Education Statistics. When combined with undergraduate debt, the total rises to $88,220.
Average graduate debt by degree type
Professional degrees, such as law and medicine, come with the highest balances, often exceeding six figures. For example, the average medical graduate owes nearly $192,000, while law graduates owe about $133,000. By comparison, students who earn master’s degrees typically have much lower debt balances. For example, an average graduate with a master’s degree in education has less than $40,000 in student debt.
The table below shows the average student loan debt for different graduate degrees:
What factors influence grad school debt?
Several factors determine how much debt you may leave graduate school with:
- Degree type: Professional degrees, such as law and medicine, usually result in much higher debt than a master’s program.
- Institution type: Private schools often cost significantly more than public ones, while choosing an in-state public school can lower tuition and borrowing needs.
- Financial aid: Scholarships and grants reduce how much you need to borrow, and graduate students who secure this type of aid often take on significantly less debt.
- Assistantships and fellowships: These opportunities can cover part of your tuition and may also provide a stipend for living expenses, which lowers your reliance on loans.
Why do graduate students borrow more than undergrads?
Graduate school often requires taking on more debt than an undergraduate degree. Tuition is generally more expensive for advanced programs, and the longer time in school can drive up living costs.
Additionally, graduate students don’t have access to subsidized federal loans, meaning interest begins to accrue as soon as the funds are disbursed. Other graduate federal loans, like Direct Unsubsidized Loans and grad PLUS loans, also come with higher interest rates than undergraduate loans.
Another factor is the limited availability of grants for graduate students. “Graduate students typically receive fewer grants than undergraduate students, needing to rely on loans to complete their degree,” says Carey Donaldson, founder of New Beginnings LLC, a student loan advocacy company.
Good to know
Graduate students received an average of $10,750 each in grant aid for the 2023-24 academic year, according to the College Board.
Financial impact of graduate student debt
Graduate student loans can create a heavy financial burden after graduation. For example, borrowing $88,000 at a 7.94% interest rate translates to a monthly payment of about $1,065 on the 10-year Standard Repayment Plan. Over the life of the loan, you would pay roughly $127,787 before becoming debt-free.
“Whether from undergraduate or grad school studies, high student debt payments can constrain cash flow, making it more challenging to save for retirement, buy a home, or even fund emergencies,” says Rodney Griffin, a financial adviser at Northwestern Mutual.
“It may also influence career choices, as some individuals might choose higher-paying jobs over more purposeful but lower-paying opportunities to meet repayment obligations,” he adds.
If you’re graduating with significant debt, start by using a loan repayment calculator to understand your monthly payments. From there, compare repayment strategies and consider how they align with your financial goals. Depending on your situation, you could focus on aggressive repayment to reduce interest costs, explore student loan refinancing, or enroll in an income-driven repayment plan to make payments more manageable.
Editor insight: “A good rule of thumb is to avoid borrowing more than you expect to earn in your first year after graduation. For example, if your projected starting salary is $60,000, I suggest keeping your total student loan debt at or below that amount, if possible.”
— Renee Fleck, Student Loans Editor, Credible
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FAQ
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