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For Graduate Students, Help Weighing The Costs Of An Advanced Degree

Student debt in the U.S. has reached an astonishing $1.08 trillion. Would-be doctors, lawyers and other grad students must carefully consider how graduate school will impact their future finances. One tool aims to help.

Student debt in the U.S. has reached an astonishing $1.08 trillion. Would-be doctors, lawyers and other grad students must carefully consider how graduate school will impact their future finances. One tool aims to help.Yes it’s true: Student debt has reached an astounding record level of $1.08 trillion—and that was just for the end of 2013, according to a report released earlier this year by the Federal Reserve Bank of New York.

Trying to make sense of that debt, and what’s behind it, represents something of a mind-bending task.

For starters, most people don’t really know the difference between a billion and a trillion. If you were to spend $1,000 a day, it would take you about 2,740 years to get to $1 trillion, as opposed to just 1,000 days to spend $1 million.

This may explain why certain concerned parties are trying to take action when it comes to student debt, particularly on the graduate school side of the equation.

“There are no quick fixes for the student debt crisis,” says Mike Noetzel, Managing Director at TIAA-CREF. “But three sectors — business, education, and government — can help. By providing students with the knowledge and tools to effectively borrow, save, and spend — and pointing them to available financial aid — we can reduce the amount that students need to borrow and help them better manage any debt they may incur.”

“Debt can affect a graduate student’s career and life choices,” says Daniel Denecke, Associate Vice President at the Council of Graduate Schools. “That’s why we want students to be empowered early on as they make important financial decisions that can affect their lives and careers.”

Part of the push involves the council and TIAA-CREF teaming to create GradSense, a tool that helps graduate students plot out their future by taking a look at how their degree choices will affect their financial futures.

“There is a lot of talk surrounding the problems of student debt,” Denecke says. “Success for us means creating a dialogue that focuses on solutions. Many of today’s students lack the basic financial education and skills necessary to manage debt. GradSense can help by empowering students as they make financial decisions, providing them with more financial opportunities in their lives and careers.”

The GradSense tool is helpful to potential grad students mulling a degree, though those in the midst of pursuing one can also get a lead on where they’re headed financially. It asks for three simple criteria: “What degree level do you want to pursue?”, “Your field of study” (broken down into 12 areas), and “An occupational area (more than 60 occupations). It also has links that cover two sides of the same coin: How much you could save via compound interest, and what it will take to cover monthly loan repayments.

GradSense data was drawn from two primary sources. The debt-to-earnings tool draws from two national databases: the National Postsecondary Student Aid Study (NPSAS), which is administered by the U.S. Department of Education’s National Center for Education Statistics, and the National Survey of College Graduates (NSCG), administered by the National Science Foundation.

Because the salaries and debt numbers came from different years, the Council of Graduate Schools normalized the data by adjusting all dollar figures to 2012 U.S. dollars using the Consumer Price Index.

For now, “GradSense also provides links to helpful resources for students, including loan repayment calculators, budgeting guides, money saving tips, and information from the Federal Student Aid Office and the National Student Loan Data System,” Denecke says. But there are plans to build on this platform: “Over the next two years, CGS, TIAA-CREF, and the 15 universities partnering with us on the Enhancing Student Financial Education program will be developing additional tools to help students navigate other important financial decisions.”

The list of current schools includes Arkansas State, Cornell, Ohio State, Loyola University Chicago, the University of Kentucky and the University of South Florida. Another 19 schools are participating as affiliate partners, and universities can work GradSense into their existing web pages, which promises to spread its offerings even further.

Financial experts say tools like GradSense point in a common-sense direction: that students need to take charge of what’s happening to them financially any way that they can, and foster their own independence.

“The bottom line is to live in a world where we take care of ourselves,” says Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation and Senior Vice President, Charles Schwab & Co. Inc. “If you’re under 30, this is your opportunity to take control of your future and that it’s in your hands. Be personally responsible for what it’s going to look like and you’ll be better off. You wouldn’t be dependent on your employer, the family, or the government.”

Take for example the notion of pensions, once very common for those who got jobs straight out of graduate school. “There are still some pensions around today, but for the 30 year olds they will be dinosaurs,” Schwab-Pomerantz predicts. “You have to have the discipline to save, to invest and create that paycheck—and often without any financial education.”

Her point is a great one: All the grad school training in the world may not teach students how to save and invest in the real world. To that end, GradSense doesn’t offer all the answers (nor does it claim to do so). But it’s a solid step in the direction of increased financial literacy.


Published or updated on May 30, 2014

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About Lou Carlozo

Based in Chicago, Lou Carlozo is a personal finance contributor for Reuters Money, a columnist with, and a former managing editor at AOL's Contact him with story ideas for Money Under 30 at, or follow him via LinkedIn and Twitter (@LouCarlozo63).


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  1. Trish says:

    Great read, I couldn’t agree more! I have an advanced degree and it was very expensive. Fortunately, I have a husband who is a CPA, who has helped me (us) get through grad school with as little loans as possible. We still ended up with a lot of loans however (we both have graduate degrees). There is a lot of danger for young professionals who get into loads of student loan debt and have no financial knowledge. The school I went to for physical therapy (we know nothing about money) caught on to this problem and started hosting a series of financial “seminars” to help students make a budget, understand their loans and make sense of their current situation. While it was step in the right direction, it really highlighted the fact that so many students have no idea how to manage money and at the same time, are six figures in debt!

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