Survey: Graduate Students Expect a Financial Return on Investment

Graduate students are looking for career advancement and an earnings premium when they enroll, and they judge their overall satisfaction with their program by their outcomes after graduation, new research from think tank Third Way and Global Strategy Group found.

The research, presented in a Feb. 15 webinar by Third Way, highlighted surveys and focus groups with graduate students and those who recently completed graduate school.

Based on these data, higher education leaders should consider visibility and transparency in graduate student outcomes a high priority to attract and support learners, say Third Way education policy experts.

Today’s grad student: Most of Third Way’s survey respondents were adult learners over the age of 25 (81 percent); 66 percent were white, around one-third (36 percent) were parents and many had a full-time (49 percent) or part-time (22 percent) job.

Four in 10 (43 percent) students borrowed between $20,000 and $60,000, 18 percent borrowed between $60,000 and $100,000, and 10 percent borrowed more than $100,000. Among graduates with debt, 61 percent held undergraduate loans, as well.

Student perceptions: The survey solicited students’ opinions on their graduate institution in serving students.

Most said their institution has excellent or good overall education quality (89 percent) and quality of professors (86 percent). Students were less likely to say there was aid available for those who need it (68 percent) and felt less confident in the overall value of their graduate experience compared to the cost (76 percent).

When asked if going to graduate school was worth it, 53 percent of students over all said it was definitely worth it, and 36 percent said it was probably worth it. Black students were more likely to say graduate school was definitely worth it (62 percent), as were students studying health (64 percent).

Among graduate students who were employed full-time, 90 percent said grad school was definitely or probably worth it, but among those employed part-time or unemployed, 21 percent said it was probably or definitely not worth it.

Similarly, students who borrowed more than $40,000 were more likely to believe graduate school was not worth it (13 percent) than students who borrowed less (9 percent) or didn’t take out loans (7 percent).

Why they enroll: The most common reason students enrolled in graduate school was to advance in their field of choice, get a good job or to earn more money. Less important factors in the decision to go to graduate school included learning more about something the student was interested in, mastering a skill, earning a credential, meeting people in other professions or planning to make a career change.

“Students are feeling strong about their career advancement and hoping that, before they come to a graduate program, that’s what they achieve,” said Chazz Robinson, education policy adviser at Third Way, in the webinar.

Focus groups revealed similar trends, with students and recent graduates naming as the long-term benefits of a graduate degree career advancement and financial security. Other benefits include the educational experience, skill attainment, gaining confidence, setting an example for their children or achieving a milestone as a first-generation student.

Need for transparency: Students in graduate education also advocated for more transparency about postgraduate outcomes, even if the data are imperfect. Three-fourths (76 percent) of students said they wanted more transparency from their institution, even if it requires additional resources.

“Students want to be an informed consumer going into graduate school,” Ben Cecil, education policy adviser at Third Way, said in the webinar. “It’s such a big decision, because you’re taking time out of the workforce, you’re potentially taking time away from other things you could be doing in the hopes of gaining that earnings.”

A 2022 report found, among 14,000 graduate degree programs, that 60 percent of M.B.A.s and 40 percent of master’s programs have a negative return on investment. New federal regulations would hold institutions accountable for the cost of programs and graduates’ career outcomes, prioritizing financial value transparency.

In focus groups, graduate students said their institution provided data on program completion rates, rates of passage on required exams, alumni success stories, broad job placement info and some details on expected income, but not much. Very few said their institution shared a student’s typical debt-to-earnings ratio after graduation.

Students shared they wanted more up-front financial counseling about taking out loans, understanding total enrollment costs and preparing them for how long it takes to pay back loans.

“Some students also felt that their institution or their program might have misrepresented the market value of their program, and that the job statistics that they received on the front end might have been misleading or even a little bit outdated,” Cecil said. “That, unfortunately, then leaves the student on the back end to contend with what that reality looks like … after they’ve already made a large investment into their graduate education.”

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