These graduate degrees have the worst debt-to-income ratios

Public policy debates over the nation’s roughly $1.5 trillion in college debt often focus on the financial obstacles to obtaining an affordable undergraduate education. Graduate students, however, shoulder more than a third of the federal higher-education loan burden while comprising a relatively small slice of post-secondary school enrollment.

On graduation day, the average graduate-school student debt tallies approximately $66,000  – excluding undergraduate school loans – Savingforcollege.com reported last summer.

Master’s degree students graduate with an average of $44,900 in grad-school debt, while those earning law degrees leave with an average of $113,300 and MDs enter their careers with an average of $223,700 in grad-school loans, according to the site. 

The largest graduate degree debt, however, doesn’t necessarily translate into the largest long-term burden. The relationship between student debt and professional earnings can help determine how heavily that load will weigh on a graduate and how many years (or decades) it may take to repay.

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Looking at graduates’ educational debt-to-income ratio – the percentage of school loan payments to gross income – can shed light on which graduate degrees leave professionals with the most onerous student debt.

Various studies have analyzed debt and income data to find the highest grad-school debt burdens. The results vary to some extent because researchers use different approaches and data sets to crunch the numbers.

Here are several graduate degrees that appear among the costliest in terms of debt burden.

Optometry

Credible analyzed data from 91,000 borrowers seeking to refinance grad-school loans from 2015 to 2018, comparing their federal and private debt to salaries based on graduate majors. Optometry topped the list, with a 14.9 percent monthly debt-to-income ratio, based on an average $1,369 monthly loan payment and $110,000 annual income.

Optometry also ranked among the degrees with the highest median loan balances as a percentage of annual income, all exceeding what Credible called the 1:1 debt-to-annual-earnings rule.

Veterinary

These graduates carry a 12.6 percent debt-to-income ratio, with an average $891 monthly loan payment and $85,000 annual income, according to Credible, which also ranked this degree among those with the highest median loan balances as a percentage of annual income.

Physician assistant

These graduates bear a monthly 11.6 percent debt-to-income ratio, with a $964 monthly loan payment and $100,000 annual earnings, Credible found. It was also ranked among the highest median loan balances as a percentage of annual income.

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Dentistry

With a $1,434 monthly loan payment and $150,000 annual income, dental-school graduates average an 11.5 percent monthly debt-to-income ratio, by Credible’s accounting. It also has one of the higher median loan balances as a percentage of annual income.

Pharmacy

A 10.9 percent monthly debt-to-income ratio, with a $1,092 monthly loan payment and $120,000 annual income, makes this one of the most debt-burdensome degrees, Credible found, also citing pharmacy among those with the highest median loan balances as a percentage of annual income.

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Students considering a graduate degree should explore the range of salaries in their field and compare likely future income to their potential graduate debt. High-income professions won’t necessarily spare graduates years of cumbersome debt, so it’s important for students to assemble as clear a picture as possible of the financial consequences.

Those facing a big debt burden might explore graduate school scholarships and grants, consider lower-priced schools or more financially viable degrees, and focus their post-graduation plans on higher-paying employers.