Graduate Students Won’t PROSPER

Graduate Students Likely Won’t Fare Well Under PROSPER Repayment Framework

Plenty of digital ink has been spilled articulating the numerous detrimental effects the House Higher Education Act (HEA) reauthorization bill, known as the PROSPER Act, would have on students and families. But as a potential law student, or really any graduate or professional student, are you getting a better deal under PROSPER than you would be under current federal policy?

In a word: No.

If a goal of PROSPER is, as it should be, to make graduate education more affordable or to help student borrowers better manage their loan repayments, the bill falls short. In fact, it does the exact opposite in many cases. Under PROSPER’s proposed changes to the federal student loan programs, graduate and professional borrowers will lose out the most.

The bill’s authors assert PROSPER’s reforms will simplify and improve student aid and that the proposals outlined will help students borrow responsibly. Those are certainly laudable goals, but the bill seems to miss two of the largest problems facing higher education today: maintaining access and increasing affordability. Strikingly, no language in the materials promoting the bill explicitly states how PROSPER’s proposals address making higher education more accessible or making paying for school more affordable. That is probably because, at least for most graduate and professional students, it won’t.

Here’s an example:

Let’s say you went to a three-year graduate school in the Midwest where the tuition was around $27,000 a year. Adding your books, fees, living expenses and other items, your total cost of attendance was around $47,000 per year. Thus, you needed to borrow a total of $141,000 to graduate. Because PROSPER has annual loan limits, you had to take out both federal loans and private loans to finance your education. You consolidate both your federal and private loans with totals of $85,500 and $55,000, respectively.

You currently make enough to have an adjusted gross income of $60,000 with no children, spouse, or other complex financial situations. This means you would likely end up initially paying over $1,000 a month for your student loans before you paid rent or bought food to eat. That is well over 25% of your discretionary income! Compare those figures with the fact you would be initially paying around $350 (or 10% of discretionary income) under current federal policy.

That’s an easy choice.

While this is just one example, it is indicative of how many graduate and professional students would be harmed by the loan policies in PROSPER. You will pay more and, in many instances, pay longer for graduate education under this new proposal. You can read a more detailed explanation of this example above here.

If you want to get involved and ensure these policies are not enacted, visit our #MakeTheCase advocacy page. If you are a student, please visit our student advocacy campaign site. Among other tips and resources, we created a one-pager with a few other examples of graduate student repayment scenarios, differentiated by school type, under PROSPER to use when advocating for better student loan policies.

View the Full Brief.

View other sample PROSPER repayment scenarios.