Commentary: Taxpayers End up Paying off the Insane Tuition Costs of Grad Programs at Elite Colleges

A see of college graduates at the commencement ceremony.
by Hans Bader


“Columbia and other wealthy universities steer master’s students to federal loans that can exceed $250,000. After graduation, many learn the debt is well beyond their means,” notes the Wall Street Journal.

The Journal reports on Columbia University’s Master of Fine Arts Film program, one of the worst examples, in an article titled “Financially Hobbled for Life: The Elite Master’s Degrees That Don’t Pay Off”:

Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000.

Yet two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year.

The Columbia program offers the most extreme example of how elite universities in recent years have awarded thousands of master’s degrees that don’t provide graduates enough early career earnings to begin paying down their federal student loans….Recent Columbia film alumni had the highest debt compared with earnings among graduates of any major university master’s program in the U.S.

Columbia is one of America’s most progressive universities, and one of the richest: “Its $11.3 billion endowment ranks it the nation’s eighth wealthiest private school.”

It is now graduate students, not undergraduates, “who are accruing the most onerous debt loads.” That’s because “the federal Grad Plus loan program has no fixed limit on how much grad students can borrow.” Its “no-limit loans make master’s degrees a gold mine for universities, which have expanded graduate-school offerings since Congress created Grad Plus in 2005.” As a result,

Highly selective universities have benefited from free-flowing federal loan money, and with demand for spots far exceeding supply, the schools have been able to raise tuition largely unchecked…Universities, which receive their tuition up front, have an economic incentive to expand graduate degree programs and face no consequences if students can’t afford to pay the federal loans after they leave.

As James Stoteraux notes, “There were 55 students in my incoming class at Columbia’s MFA Film program. Only 4 of us ever managed to make a career out of it. And of those 4, one guy dropped out the first semester. Funny enough he’s the most successful one having co-directed Avengers Endgame.”

But as Ian Lamont of Lean Media observes, “a graduate financing program enabled by Congress ~15 years ago basically lets Columbia charge whatever it wants and get paid up front. Students are on the hook for hundreds of thousands; if they can’t pay it off taxpayers are on the hook.”

Even students who can find jobs after graduating often dump much of their massive student-loan debt on taxpayers. Once out of school, the students enroll in an income-based repayment program, in which the federal government forgives all loans after 10 or 20 years. This “Pay as You Earn” program allows eligible student-loan borrowers to cap monthly payments at 10 percent of their discretionary income, and have their remaining federal student loans forgiven after 20 years — or just 10 years, if they go to work for the government.

Stoteraux describes how little he got for his tens of thousands of dollars in annual tuition at Columbia: “During my 2nd year I suspected that the school wasn’t providing a launching pad to a career — most of the instructors were struggling to establish a career themselves & many weren’t even much more experienced than their students. A 4th yr student taught our cinematography class.”

After getting their MFAs, his classmates, unable to find jobs as filmmakers, sometimes ended up “teaching… in MFA programs.” So the MFA programs became a never-ending cycle of failure, in which people who already have the useless MFA degree help transmit it to others who spend a fortune on the degree.

Columbia film students received little for their massive tuition. As Stoteraux explains,

The brass ring the program dangled was that your film could be chosen for the annual festival where, in theory, big-time agents would see it and maybe sign you. But it was cutthroat to even be selected for the festival. And tuition didn’t cover the cost to make those films. You were on your own to pay for them…Students were going into debt to the tune of 100K to make films with the hope that they might maybe have a chance to be seen by a CAA agent.

Not having the money to make a film, I switched to writing. I teamed up with a friend to write a screenplay that we hoped could be our calling card….Within a year, that script sold — not because of anything my fancy school did, but because randomly I met a producer’s assistant who offered to read it, liked it, & championed to his boss.

I was officially a working writer, but I was still 2 credits shy of getting my degree. I asked if there was possibly a way I could finish my degree while in LA starting my career. But Columbia was offended by the request and refused. So I dropped out within 2 credits of MFA.

After Stoteraux became successful, the MFA program wanted him to speak to its students. In exchange, he wanted Columbia to allow him to finish his degree. But the Chair of the MFA program would only do so if he provided a special favor to the Chair himself:

[T]he Chair began pitching me his idea for a TV pilot. In excruciating scene-by-scene detail…He made it pretty clear if I wanted my degree, I needed to help him sell his tv pilot. Yep, the Chair of Columbia’s prestigious graduate film program tried to shake me down in order to jump-start his own stalled out career…I still don’t have my MFA. That Chair is no longer the Chair, but still teaching there. And to my knowledge, they never sold their pilot.

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Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law.

Appeared at and reprinted from

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4 Thoughts to “Commentary: Taxpayers End up Paying off the Insane Tuition Costs of Grad Programs at Elite Colleges”

  1. 83ragtop50

    The whole student loan sham is a bait and switch scheme from many perspectives. And all the “fee” money just allows the schools to continually raise tuition costs because they know the government will just hand out larger loans. On top of that the senior faculty members at many universities MAY teach for a few hours a week and spend the majority of their time on tax dollar funded “research”. This stuff is out of hand.

  2. DavidMH

    The Federal student loan program needs to be reformed for everyone’s sake – students and taxpayers. As the article says, students are being ripped off by colleges.

    Part of the problem is the “follow your dream” idea that is promoted to kids. If a kid is rich, they can do whatever they want. But most kids need to prepare for a career.

    Before being approved for a loan, students should be required to do research about the average starting salary for the career they are pursuing so they will know if they can pay back the loan. And there should be a limit on how much they can borrow that is tied to the cost of an online college degree.

    1. Dr Ken

      I agree with you David with the exception the lending institution ought to be responsible as well in their loan practices. They too, have to share the risk. Aggregate student loan totals have to be firmly linked with potential earnings a person can expect with that degree.

  3. M. Flatt

    The one flaw in the 10-year “Public Service Loan Forgiveness” is that one has to be making loan payments at the same time as they are working for “Public Service”.

    Of course, I was medically ineligible for military service, so I’m not able to take advantage of the free degree, mortgage help, or hiring boost that comes from those few uniformed years.