The New Student Debt Crisis–The Wall Street Journal

Country/area: United States

Organisation: The Wall Street Journal

Organisation size: Big

Cover letter:

To the Judges:

The Wall Street Journal exposed the predatory nature of elite U.S. universities. These schools baited vulnerable families into taking on mountains of debt to pay for high-cost degrees. The universities became richer while low-income students and parents were burdened with loans in fields with dim salary options.

The Journal’s reporting focused on the fastest growing sector of student loans: the federal government’s Grad Plus and Parent Plus program. This unlimited supply of debt has become a money machine that allows families to meet otherwise unaffordable costs. When borrowers fail to pay down the loans—and they are doing so in shocking numbers—taxpayers are left with the bill.

The coverage showed how both the federal government and wealthy schools put financial benefit and political expediency ahead of poor and middle-class students, many with loan balances above $300,000. One borrower we profiled said of his university: “You tell them, ‘I need assistance,’ and they’re like, ‘OK, here’s a loan.’ It was just an endless supply of money.”

The investigation drew on new data released by the Education Department that for the first time exposed how much graduate students from individual programs borrowed and whether they paid it back.

Among our findings:

  • The social work master’s program at the University of Southern California teamed up with a for-profit company, charging $115,000 for a two-year online degree that left half its graduates earning $52,000 or less two years later. 

  • Parents borrowing to send their children to Baylor University had the worst repayment rate after two years—only about 25%—of any private school with a large endowment. Parents were saddled with Plus loans because Baylor is one of the least generous among wealthy colleges in giving scholarships to needy students.

  • Film program graduates of Columbia University who took out federal student loans had a median debt of $181,000. Two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year. That’s the worst debt compared with earnings among graduates of any major university master’s program in the U.S.

  • New York University topped them all. Graduate students and parents collectively borrowed $3.4 billion in Plus loans over the past decade, more than at any other university in the U.S.

In Washington, lawmakers acknowledged that their no-limit borrowing has plunged millions of families into debt but they have punted on capping or otherwise changing the Plus program year after year. One reason, the Journal showed: They fear universities’ backlash. 

Many families we profiled are burdened for life, with debt relief coming in some cases only upon death. Kayla Foots’s mother owes $57,000 in Parent Plus loans. The $100,000 taken out by her stepfather was wiped away when he died in 2020. Ms. Foots said: “That is so crazy and so sad that that was the silver lining out of the situation.” 

At USC, the Journal found that the social work program targeted poor and minority students. Their marketing materials had cartoon profiles of the school’s hypothetical recruits including “Needy Nelly,” a Black woman who repeatedly needed help with her application. Days after our article ran, the dean of the social work school told students it was trying to get out of its “stupid” contract with its for-profit partner, 2U, Inc. 

Beyond our articles, the Journal offered consumer-oriented tools and visualizations to help parents and students better understand how their debt can balloon and which schools and programs are providing the best or worst value.

Our data-driven project represents the finest tradition in accountability journalism, and we are proud to nominate it for a Sigma Award.


Description of portfolio:

Getting access to Grad Plus and Parent Plus data was a years-long effort by The Wall Street Journal’s Andrea Fuller, a data reporter on the investigative team who specializes in education.

The U.S. Education Department denied her request for the information a decade ago when she was a data reporter at the Chronicle of Higher Education because it hadn’t calculated the figures. In other words, federal officials didn’t have a handle on their $1.6 trillion student loan portfolio, and consumers couldn’t know which schools were fueling the problems.

That began to change in late 2019, when the Education Department first published some salary data for the graduates of individual programs. It released the largest trove yet in January 2021, including data on what graduate degree recipients earned two years out of school, what their early-career loan repayment rates looked like, and how good of a job parents of students at different colleges did at paying back their debts.

Armed, finally, with this massive new data set, Ms. Fuller teamed with a number of Journal reporters to produce a series of text articles and visualizations that provided a tremendous service to the public. They took data with thousands of columns of information repeated across multiple files, cleaned and analyzed it and then presented it in a way that was accessible to people making financial decisions about their educational future.   

In our first visual story, we revealed with undeniable specificity which programs left graduates with debt loads far beyond what they could pay back on their new salaries. This debt-to-income ratio can be wonky, so we presented examples, such as the master’s degree programs in public health at the University of Southern California and California State University, Long Beach. Graduates from these nearby schools had similar median incomes two years after finishing, but USC graduates left school with 2.5 times as much debt as Cal State Long Beach grads.

Our tool then allowed users to make their own such comparisons for programs at the undergraduate, master’s, doctorate and professional degree levels. More than 28,000 programs were showcased at some 1,700 universities and colleges.

Our second visual explains how graduates can diligently pay on their loans only to end up with more debt than when they started paying. We put readers in the shoes of a graduate who begins a two-year master’s program in 2021 that charges $100,000 in tuition. Our “borrower” ends up paying $185,000 but still owing $202,000.

Both the reporting and visualization components took enormous effort. Ms. Fuller spent many hours on the phone with experts on various student loan forgiveness programs as she built her model. Even the experts didn’t always know the particulars or agree on them. For the visual element, graphics reporters James Benedict and Jason French used scrollytelling to keep the reader focused on one main visual that changed over time. It showed the amount paid growing with very little impact on the bright red debt column. This seemingly simple design – bar charts and animation – makes an immediate and powerful statement of how crushing this debt can be for individuals.

Project links: