Since I have over $92,000 in student loan debt myself at last count, perhaps I'm just finely attuned to news coverage on this issue. However, my very unscientific observation is that there have been quite a few articles on student loan debt in the news lately, particularly graduate school and Ph.D. debt. And I think that devoting more attention to this issue is definitely a good thing.
What's the big deal, anyway? #PhDdebt
According to the National Science Foundation's Survey of Earned Doctorates (SED), in 2012, just over 12 percent of individuals graduating from Ph.D. programs had student loan debt of $50,000 or more. Almost 47,000 people earned Ph.D.s in 2012, so 12 percent means over 5,700 people. While that's an extremely low number compared with the overall population, that's a lot of lives potentially ruined by debt that can't be discharged in bankruptcy.
Doctoral students in fields such as social sciences and the humanities are significantly more likely to carry a larger debt load. For example, in the social sciences, 23 percent of Ph.D. recipients have more than $50,000 in student loan debt. That's almost twice the percentage of Ph.D.s overall with a debt load of over $50,000. In the humanities, 19 percent of doctoral graduates have student loan debt of $50,000 or more.
They're also far less likely than fields like the hard sciences or mathematics to find tenure-track or related full-time work upon graduation. What's even scarier is that these numbers don't include debt accrued while obtaining an undergraduate education. They also don't include consumer debt such as credit cards, car loans, or home loans. Also omitted are doctors, dentists, veterinarians, MBAs, attorneys, and other terminal degrees where debt is the norm.
What else doesn't this number include? #PhDattrition
Perhaps scariest of all, these numbers don't include doctoral students who left their programs without earning a degree. According to the Chronicle of Higher Education, Ph.D. programs have approximately a 50 percent attrition rate. So for those 47,000 who graduated in 2012, there are just as many folks who started a Ph.D. but didn't finish.
If we assume debt levels are similarly distributed across non-graduates, there are perhaps 10,000 people per year joining the ranks of the extremely indebted. Per year. It's a fairly reasonable assumption — the Chronicle of Higher Education reports that only half of Ph.D. attrition in humanities programs takes place by the third year. The other half leave after Year Three but before Year Ten!
I know plenty of people anecdotally who left Ph.D. programs for reasons such as poor health and family obligations. These are exactly the kinds of situations where a cash cushion — easily obtained via student loans — come in handiest. They're also the type of situation most likely to prevent you from working full time even if you wanted to. And if even a Ph.D. isn't enough to guarantee you full-time employment, what chance does someone who left without the degree have?
What's the solution? #DontBeStupid
Karen Kelsky, ex-anthropology professor and head of the consulting service The Professor Is In, recently demonstrated that fully-funded students also accumulate high debt loads. Her open Googledoc, which has been filled in by thousands of individuals anonymously sharing their experience and debt loads and featured in stories by Slate and The Atlantic, is a study in heartbreak. So what's to be done about this issue?
Don't go to graduate school at all, you might say. Or don't travel to participate in professional conferences/meetings while living on a graduate stipend. Or don't meet up for study groups at the local watering hole. Or don't have kids while pursuing a graduate degree. Or don't have a car. Or live with five roommates. Or work five jobs while you're in school. Or eat nothing but beans and rice.
It's easy to judge other people for their spending. However, in my experience, judgment is not a particularly effective method for solving problems. That's especially the case when we're talking about such a large group of people. Let's say that you're able to stop one person from taking on significant student loan debt simply by telling them that it's stupid, illogical, sub-optimal. What about the other 9,999 or so people? Who's stopping them?
Who else is disadvantaged? #StudentLoanDefault
In other words, it almost doesn't matter what one individual does or doesn't do. We're faced with a systemic problem that almost certainly requires a systemic solution. But what if you don't have a Ph.D. or don't know anyone who does? Why should you care?
Back in my days as a TA, I used to tell my students that human beings were inherently lazy. As a result, convincing people that a problem exists isn't enough. You also have to convince people that:
the problem affects them directly,
there is something they can do about it, and
inaction will result in more discomfort/inconvenience for them personally than taking action will
That's asking a lot! But I really do think this is a problem that affects everyone. According to the Federal Reserve Bank of New York, in late 2013 outstanding student loan debt topped $1 trillion. Additionally, over 11 percent of those loans are delinquent by 90 or more days. Because many loans are federal loans, the taxpayers are the ones who aren't getting paid back.
Even individuals who aren't in default must make significant sacrifices to stay current. It's all fun and schadenfreude to say things like “they made their bed, now they can lie in it.” However, the fact is that not being able to do things like buy a house, have children, or find a well-paying job utilizing the only skill set you have has a negative impact on the economy.
Again according to the SED, the median time to (Ph.D.) degree is currently 7.7 years in the social sciences and 9 years in the humanities. Imagine if instead of accruing a five- or six-digit debt load, they had spent that time paying taxes on a five- or six-digit income. Imagine that some of the brightest and hardest-working people didn't have to spend every waking moment worrying about next month's loan payment. What significant social and economic problems could they put their minds to solving if they didn't have the constant worry of their debt?
I'm not advocating student loan forgiveness (though I wouldn't say no if the opportunity arose). But it just seems to me that a problem of this magnitude can only really be solved via structured change.
What do you think should be done to address this issue?
Honey Smith has been reading GRS since at least 2008, right when she got her first â€œrealâ€ job and started getting serious about finances. She and her husband Jake are in their mid-30s and recently bought a home together. Currently, she manages graduate programs at a large state institution, and he is an attorney at a mid-sized firm.
Between them, they have paid off approximately $30,000 in consumer debt since she started writing for GRS in 2012. However, they still have nearly $200,000 of student loan debt, so she will continue to chronicle their debt-paydown journey. In addition to personal finance, Honey is interested in vegetarianism and cooking, gardening (despite living in the desert and having a black thumb), issues in higher education (including the student loan bubble and the slow death of tenure), and animal rights; however, her heart lies with fantasy novels, trashy TV and Skyrim.