Advanced Degrees and the Financing Squeeze
Advanced degrees are increasingly becoming a prerequisite for a comfortable standard of living in a growing number of American metros, but the process of financing those degrees is changing.
Key Findings
- 1In many major metro areas, bachelor’s degrees alone no longer guarantee wages that support comfortable standards of living. Advanced degrees are becoming increasingly necessary to access wages that support those standards.
- 2Newly proposed federal loan caps that are scheduled to take effect in fall 2026 will shift the landscape of financing large swaths of degree programs. For students without significant financial aid, their options will either be restricted to institutions with lower prices, or they may have to seek alternative loan sources.
- 3Private institutions and advanced healthcare programs will likely be impacted most by these changes. Higher education programs must strategize new revenue optimization and justify their ROI as federal loans will no longer cover the full cost of attending many programs.
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We examined where the average wage gap between a bachelor's degree and an advanced degree is now the determining factor in whether someone can reasonably afford a home. The results are significant: 55 million people live in counties where that gap makes or breaks middle-class homeownership.
At the same time, proposed federal loan caps set to take effect this fall would leave more than a third of professional degree students borrowing above the new limit. For many programs, particularly at private institutions and in clinical healthcare, federal loans will no longer come close to covering the full cost of attendance.
The implication for higher education leaders is not that advanced degrees have lost their value. The rising costs of living have instead increased their value.
It's that the business model built around financing them is under real pressure. Programs that cannot clearly articulate their return on investment will struggle to justify their price as traditional borrowing options narrow.
In our latest analysis, we model where these pressures are most acute, which programs are most exposed, and what institutions can do to respond.
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