Universities are increasingly turning to graduate programs to balance their books. Students are shouldering the costs.

This story was produced in collaboration with the Hechinger Report.

Angie Perez and some of her classmates are studying together in a covered plaza that connects a classroom building with the law library at St. Thomas University.

It's a sunny afternoon beneath a clear blue sky, and they appear surprisingly upbeat considering they're slogging through the notoriously tough first year of law school.

Don't be fooled, Perez says. "We may look like we're not stressing, but inside it's, 'Oh, my god.'"

In addition to the academic demands, she and her friends acknowledge, they're concerned about the cost of their graduate educations, the debt they may accumulate to pay for it, and whether jobs will be available at the other end.

But many say they don't think they have much of a choice.

"Nowadays everyone's going to graduate school," says Ernesto Rivero, a second-year law student sitting nearby, who hopes to become an agent for artists, actors, and musicians. "Most of my close friends are in law school or medical school. That's what they tell you to do."

As the number of undergraduates steadily declines in seeming direct proportion to rising costs, debt, and the many other obstacles faced by college students, graduate enrollment is quietly on the upswing. It's being driven by the better job prospects and higher salaries people think it will bring them—and by a conscious strategy among universities like this one to add graduate programs that produce much-needed revenue.

While undergraduates get much of the attention, students who pursued graduate and professional degrees now account for 40 percent of the notorious $1.5 trillion-worth of outstanding national student loan debt, the College Board reports; each owes three times more, on average, than an undergraduate, according to the Urban Institute.

That's in part because the net price, or the amount students actually pay after discounts and financial aid, has increased nearly twice as fast for graduate as for undergraduate programs in the 10 years ending in 2016. "Graduate school is way more expensive than undergrad," Rivero says. Tuition and fees at the law school at St. Thomas are $42,190 a year.

Graduate students can also borrow an unlimited amount toward their educations, unlike undergraduates, whose borrowing is capped. The federal government even charges higher interest rates for graduate than for undergraduate loans: 6.6 percent, compared to 5.05 percent for undergrads.

Yet the number of graduate students continues to grow, up 38 percent since 2000, much faster than the increase in the number of undergraduates during that time, according to the United States Department of Education. Undergraduate enrollment has, in fact, dropped by 7 percent since 2010—for reasons that include not only cost and aversion to debt, but also a decline in the number of 18- to 24-year-olds and an improving job market—while the number of graduate students keeps on rising.

The number of master's degrees alone that are being conferred by universities is up by 66 percent since 2000, and has tripled since 1970. Today, two master's degrees are awarded for every five bachelor's degrees, the Urban Institute calculates.

This despite the fact that only around half or fewer of people with graduate degrees think they were worth the cost, depending on the discipline, according to a Gallup poll. Fewer than one out of four law and business students and fewer than one in three other master's recipients think their graduate educations prepared them for the workforce. Many say they got inadequate advising and support.

Meanwhile, data from states that track graduates' income show that, even after all that debt, people with master's degrees in some fields, including early childhood education, philosophy and art, make less than others with only bachelor's or even associate degrees. And graduate students are as much as six times more likely to suffer mental-health problems than the general population, according to new research.

"There's a lot of frustration," said Kristofferson Culmer, a doctoral student at the University of Missouri and former president of the National Association of Graduate-Professional Students, for which he's now the spokesman. "Graduate education is being used to subsidize undergraduate education. Graduate students feel like they're just a cog in the machine."

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At St. Thomas, the number of graduate and professional students has increased 30 percent in the last 10 years, the university says, fueled largely by the addition of new graduate degrees in high-demand fields including education, cybersecurity, data analytics, and criminal justice. A doctoral program in sports administration began this year.

A chain-link fence surrounds a onetime parking lot where construction is about to begin on a new business school to house still more new programs, including one in logistics; once the complex is completed, the university plans to double its business enrollment.

Small, faith-based liberal arts institutions like his have to do this to survive, says David Armstrong, who took over in August as president of the Catholic university that has already overcome one dramatic brush with fate: The U.S.-backed religious order that established it in Havana in the 1940s moved it to this city just north of Miami when it was expelled from Cuba in 1961.

Now St. Thomas and other private, non-profit colleges face threats from new competitors such as coding bootcamps and start-ups promising much cheaper bachelor's degrees, Armstrong says. "One of these things is going to hit, and when it does schools that aren't paying attention are going to be left at the station."

Some already have been. Several small liberal-arts colleges have already closed, plan to close at the end of this year, or are publicly looking for merger partners.

To Armstrong, it's simple: To continue to provide the labor-intensive undergraduate education that is at the core of such places, "You have to bring in the revenue stream," he says. "We are all about our mission. And if there is no margin, there is no mission."

From students' point of view, graduate degrees in many subjects can lead to higher salaries. A graduate this year with a master's degree in business is projected to earn a starting salary of $77,347, compared to $57,657 with a bachelor's degree, according to the National Association of Colleges and Employers; in engineering, $82,589 versus $69,188; and in computer science, $81,466 compared to $67,539.

"In this day and age the bachelor's degree is what the high school diploma used to be and the master's degree is what the bachelor's degree once was," Armstrong says. "You have to have those letters after your name for people to open the door to you."

With her undergraduate degree in sociology and political science, "I couldn't get anything more than serving jobs—not to diss on serving jobs," says Jackie Vazquez-Aldana, a second-year law student at St. Thomas. These days, she says, "People expect that once you finish your undergrad, you go to grad school."

Karina Velazquez found that too. "That's what a lot of people told me that a master's is like what a bachelor's degree used to be," says Velazquez, who wants to go into public relations and is working at St. Thomas toward an executive master's degree in communication and digital media.

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Universities' strategies to take advantage of this new reality are starting to face problems of their own. Some have been too hasty introducing graduate programs for which demand proved sparse, for instance, and have had to scale back. St. Thomas spent $10 million adding 19 graduate programs in the last seven years, Armstrong says, but has suspended at least eight of them for lack of interest.

Many of universities' new graduate programs are online rather than in person, marketed and delivered to students by for-profit "online program management" middlemen such as 2U that take as much as 60 percent of the tuition off the top in commissions, as 2U disclosed in a presentation to investors.

Even with that, financial documents show, the company has yet to turn a profit, thanks to the high cost of recruiting new students.

That's among the signs that persuading students to go to graduate school is getting harder. The federal government projects that graduate enrollment will rise by about another 3 percent through 2027—a much more sluggish pace than in the last 10 years.

Applications to U.S. graduate business programs, which account for a quarter of all master's degrees, fell this year and last, the Graduate Management Admissions Council says. The number of all-important graduate school applications from abroad is down for the second year in a row, according to the Council of Graduate Schools, after increasing every year since 2003. The American Bar Association reports that law school enrollment was up incrementally this year, but that's after falling 29 percent since 2010.

Some of those drops can be blamed on a dearth of jobs in the legal profession, hostility toward international visitors, and tightened visa requirements for international scholars. Economic competitors such as India and China, which are among the principal sources of customers for American graduate programs, also have embarked on building sprees at universities of their own, which threaten to keep their students home.

But there is also growing resistance among prospective graduate students to the magnitude of the investment. Nearly seven in 10 students considering advanced degrees are turned off by the high cost and potential debt it takes to finish them, a survey conducted for the Association of American Law Schools found. Half complain it takes too long.

Students already in graduate programs are also beginning to grumble. Fewer than one in five graduate business and one in four law students told that Gallup poll that their professors cared about them as people. After 40 percent of graduate students at Stanford University said in a survey that faculty were not available enough to them, the faculty senate required departments to more clearly define expectations for advisers. The National Association of Graduate-Professional Students and other advocacy groups are lobbying Congress to mandate training for graduate mentors and advisors.

"If you talk to graduate students across the country, at small universities or large, public private, you'll hear a similar refrain," Culmer says. "The support just isn't there."

Researchers at the University of Texas Health Science Center at San Antonio and elsewhere have diagnosed a mental-health crisis among graduate students, 39 percent of whom show moderate to severe depression, compared to 6 percent of the general population. A study at Harvard University conducted among graduate students there and at seven other top universities found the average doctoral student in economics reports greater feelings of loneliness than a typical retiree.

Graduate students at St. Thomas said they still enjoy the comparative advantage of being on a close-knit campus where their concerns are heard; some at the law school were planning to sit in on a talk by a guest speaker about managing their debt.

At other places, however, acknowledges Provost Jeremy Moreland, "Students feel like a number. People get lost."

Meanwhile, graduate debt is rising to scary heights. Average balances have doubled since 2000 for people who completed doctorates outside the field of education or who graduated from medical school, to $98,800 and $246,000, respectively, when adjusted for inflation, the Department of Education says. Law school grads owed an average $186,600. The proportion of graduate students who take out these loans is also up, from 47 percent to 60 percent of master's degree recipients.

Alex Stevens, who works in the control room of a local television station, went back at 31 to St. Thomas, where he has just started studying toward a master's degree in mental health counseling.

"I feel like I have more options now by doing this," Stevens says.

But he says he sometimes chats with classmates about how they're going to pay for it, and wonders why there's not more discussion about the struggles of graduate study.

"It definitely needs more attention," Stevens says.

This story about graduate programs was produced by The Hechinger Report, a non-profit, independent news organization focused on inequality and innovation in education. Sign up for its higher education newsletter.

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