NEWARK, Del.–(BUSINESS WIRE)–Career aspirations are driving students to graduate school, they’re footing the bill themselves, and borrowing is the number one way they’re paying for it, according to “How America Pays for Graduate School,” the new national study from Sallie Mae — the nation’s saving, planning, and paying for college company — and Ipsos, an independent global market research company. Two-thirds of grad students (64 percent) believe an advanced degree is the new minimum standard level of education for any professional occupation, and nearly all (95 percent) say an advanced degree is necessary to enter, advance, accelerate, or remain competitive in their chosen career.
Students spent an average of $24,812 on grad school in academic year 2016-17, and more than three-fourths of them (77 percent) paid for it, at least in part, by borrowing. Funds borrowed by students covered more than half of the cost (53 percent), while money students earned, including income and savings, paid for 24 percent. Grants, fellowships, scholarships, and tuition waivers accounted for 15 percent. Eight percent of grad school costs came from funds borrowed or contributed by parents or others.
Federal student loans paid 27 percent of the bill, or $6,853, and private student loans covered 8 percent ($2,077). Half of the grad students who used federal student loans said they expect to receive Public Service Loan Forgiveness after they graduate. Two-thirds of grad students (64 percent) filed a Free Application for Federal Student Aid (FAFSA).
“‘How America Pays for Graduate School’ provides a fascinating contrast to Sallie Mae’s annual ‘How America Pays for College’ study, and finds that graduate students are more results-oriented in their pursuit of a graduate degree, and they expect a return on their investment in the form of a significant jump in their earnings potential,” said Julia Clark, senior vice president, Ipsos Public Affairs. “As students increasingly regard having a graduate degree as an educational ‘norm’ for professional careers, it will be interesting to see the extent to which employers agree.”
Cost is less of a factor in the final enrollment decision, as more than eight in 10 based their enrollment decision on a school’s academic offerings, prestige, location, campus culture, or other personal consideration. Eight in 10 grad students (80 percent) said they took more responsibility for paying-for-school decisions than they had for their undergraduate studies. The majority of grad students (63 percent) entered their advanced degree program within 12 months of obtaining their undergraduate degree.
“It is human nature to plan for what you value, and that includes graduate school. Today’s students see graduate school as their ticket to a successful and prosperous career, and most have a plan to pay for their advanced degree before they enroll,” said Raymond J. Quinlan, chairman and CEO, Sallie Mae. “That planning pays off: the overwhelming majority are confident in the financial decisions they’ve made about how to pay for their graduate education.”
The study reveals that scholarships and grants are far less available for grad students than for undergrads, accounting for just 15 percent of grad school costs. In comparison, the companion study by Sallie Mae and Ipsos, “How America Pays for College 2017,” found that scholarships and grants paid for 35 percent of undergrad costs.
In response, Sallie Mae announced a new Bridging the Dream Scholarship for Graduate Students that will award four $20,000 scholarships in 2018. Students may apply by visiting SallieMae.com/BridgingTheDreamGrad. For more information, see official rules. No purchase necessary. Ends Feb. 14, 2018, at 11:59 p.m. EST.
“How America Pays for Graduate School” reports the results of 1,597 online interviews Ipsos conducted between May 18 and July 19, 2017, of students age 20 or older enrolled full or part time in graduate school. The complete report and infographic are available at SallieMae.com/HowAmericaPaysGrad. Join the conversation using #HowGradsPay.
Find additional research from Sallie Mae and Ipsos, including “How America Pays for College,” “How America Saves for College,” and “How American College Students Manage Their Finances,” at SallieMae.com.
Ipsos is a global independent market research company ranking third worldwide among research firms. At Ipsos, we are passionately curious about people, markets, brands, and society. We make our changing world easier and faster to navigate, and inspire clients to make smarter decisions. We deliver research with security, speed, simplicity, and substance. We believe it’s time to change the game — it’s time for Game Changers! Visit http://www.ipsos-na.com to learn more.
Sallie Mae (Nasdaq: SLM) is the nation’s saving, planning, and paying for college company. Whether college is a long way off or just around the corner, Sallie Mae offers products that promote responsible personal finance, including private education loans, Upromise rewards, scholarship search, college financial planning tools, and online retail banking. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
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