An Army veteran, Anthony Manfre paid for his associate’s and bachelor’s degrees mostly with his GI Bill benefits, although he also took out $4,000 worth of student loans.

“At the time, I thought that was a lot,” he said. “And now I look back and wish I only owed that much.”

That’s because Manfre went on to graduate school, picking up a master’s degree before setting off on the long road to a doctorate in marriage and family therapy while borrowing to also pay his living expenses. And now he’s $200,000 in debt.

“In the back of my mind I was always thinking, this money is an investment — that later on, when I graduate and get a job, I’ll be able to pay it off,” said Manfre, who earns $61,500 a year working for the Veterans Administration. “But now I don’t think I’m going to get the return I thought I would.

While much of the concern about ballooning student debt has so far been focused on undergraduates, there is mounting alarm that it has overlooked a principal source of the problem: graduate students like Manfre, who are less likely to have support from parents or other sources, and who face almost no limits on how much they borrow.

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Graduate students now collectively owe as much as 40 percent of the estimated $1.2 trillion in outstanding student debt, according to the independent think tank the New America Foundation, even though they make up only 14 percent of all university enrollment.

This lopsided situation has gotten so little attention that the National Association of Graduate and Professional Students’ Facebook campaign about it is plaintively titled “Grads Have Debt 2.”

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“People focus on the undergraduates, because there are more of them and they’re younger and more naïve,” said Joel Best, a professor at the University of Delaware and coauthor of The Student Loan Mess. “They aren’t really paying attention to graduate students, but graduate students are really stacking up substantial student-loan debt.”

This indifference, Best and others said, helps graduate programs get away with continually increasing their prices. “They can charge whatever they want and say to themselves that they don’t need to worry about it, the students can get loans,” Best said.

It has also freed lawmakers to raise interest rates on graduate and professional students, who are being charged rates nearly half again as much as undergrads. In 2012, to save about $1.8 billion a year, Congress also stopped subsidizing the interest that accumulates on federal student loans taken out by graduate students while they’re in school and for six months after they finish. And a proposal to streamline existing federal tax credits would reduce the deductions they will be able to take for educational expenses.

Meanwhile, one measure to help student borrowers by limiting their repayments to a portion of their income and forgiving any remaining debt after a certain period of time, could actually disproportionately help graduate degree holders — and cost taxpayers, who would end up having to cover the difference.

“You get a lot of bad behavior all around,” Best said.

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The sharp growth in borrowing for graduate degrees is happening even as the Bureau of Labor Statistics projects that the fastest-growing careers through 2022 will require workers to have graduate degrees.

“We might have a philosophical discussion about, ‘Do you need a master’s degree for X, Y, and Z,’ but in a free and open marketplace employers are asking for them,” said Suzanne Ortega, president of the Council of Graduate Schools.

Yet while enrollment in graduate programs has increased 41 percent since 2000, according to the U.S. Department of Education, the Council of Graduate Schools reports that the pace of applications has stalled — in part because people are put off by the cost, said Neleen Leslie, president of the National Association of Graduate-Professional Students.

“We’re going to have graduate enrollment going down in our universities, because people can’t afford to take on that level of debt,” said Leslie, a doctoral student at Florida State University.

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Often past the point at which their parents help them pay for their tuition, room, and board, graduate students borrow an average of nearly three times more per year than undergraduates, the College Board reports. And while the average debt of undergraduates has more than doubled since 1989, according to the Brookings Institution, it’s more than quadrupled during that time for graduate students.

Graduate degrees unquestionably often lead to higher incomes — a worker with a master’s degree makes about 20 percent more than a bachelor’s degree holder, and with a professional degree, 55 percent more, the Bureau of Labor Statistics calculates. But not always.

About 16 percent of master’s degrees are in education, for example, for which graduates end up with a median debt of $50,879, the New America Foundation reports — compared with $30,724 a decade ago, and requiring a loan repayment of $429 a month — when the average public-school teacher with a master’s degree makes $57,830 a year.

“There’s a misperception that people who pursue advanced degrees are going to be able to make enough to pay back those loans,” said Leslie. “That’s not necessarily true.”

Now a new measure to help graduate students could cause problems for everyone else.

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The change, made by executive order in June, expands a little-known provision called income-based repayment under which borrowers can limit their monthly federal loan repayments to 10 percent of their incomes, and forgives any remaining debt after 20 years. That’s down from 15 percent and 25 years, respectively. It’s scheduled to take effect for students who borrow beginning in late 2015. Federal loans account for the largest share of graduate student debt.

While President Barack Obama, when he signed it, explicitly said the provision was meant to help undergraduates (“If you got a professional degree like a law degree, you would probably be able to pay it off,” said Obama, who graduated from Harvard Law School), some observers say it’s far more likely to be used by graduate degree-holders —including those who do earn high incomes, and may not actually need it.

The change could also encourage graduate students to borrow even more than they already do, and remain enrolled and living off their loans for longer than they need to, said Jason Delisle, director of the Federal Education Budget Project at the New America Foundation.

That’s because they’ll know their monthly payments will never exceed one-tenth of their incomes, and that taxpayers will cover any balance left unpaid after 20 years.

“Why the hell should you worry about how much you’re borrowing? Borrow a million, you’ll still have to pay off the same amount,” Best said.

Delisle called it “a policy accident.”

“And who’s going to figure this out?” he asked. “Probably people with graduate degrees.”

[Cross-posted at The Hechinger Report]

Jon Marcus

Jon Marcus is a higher education editor at the Hechinger Report, a nonprofit, nonpartisan education news outlet based at Teachers College, Columbia University.