Are you planning for college or graduate school and considering taking out student loans? For many years, we have been hearing about enormous student debt that students are ill prepared to pay back. The two primary reasons for this are investing too highly in a low paying career and choosing a school that incurs much more debt accumulation than comparable programs.

According to a recent New York Times editorial by Kevin Carey, recent data shows that the biggest culprits are graduate schools and for-profit colleges. Many of these schools hire trained recruiters who aggressively encourage students to borrow heavily to attend their programs. Unlike undergraduate programs, there is no cap on federal borrowing for graduate schools, and students are encouraged to borrow for all their living expenses in addition to tuition.

The program you choose makes a tremendous difference. According to recent data obtained by Mr. Carey, there are vast discrepancies between schools. For example, “a Pratt Institute master’s of architecture resulted in average borrowing of $157,000, while the same degree from Ohio State produced average debt of $38,000.”

In many cases, the accumulation of student debt results in a career that is too low paying to pay it back. While the expensive loans taken out by medical students and law students often pay off with lucrative careers, this is not the case in other fields, like art and social work. “People don’t become social workers to become rich – most earn less than $50,000 per year – yet $109,486 was the average amount borrowed for a master’s in the subject at the University of Southern California.” [Kevin Carey, New York Times]

For higher education, you can get your best deals from public colleges and graduate schools, and private nonprofit universities that offer scholarships and financial aid. To be eligible for merit based financial aid, it is important to obtain the best grades and test scores you can get, so that you are a desirable candidate. Also, do your research to find programs that have generous aid programs. When borrowing money for higher education, be sure to research the earnings potential of the chosen career. Don’t be lured in by aggressive recruiters.

View Mr. Carey’s full article, Biggest Offender in Outsize Debt: Graduate Schools.