Dive Brief:

• Federal tuition assistance programs for graduate students who end up working for government or non-profit agencies will encourage those students to borrow more and encourage schools to charge more, according to a new study from non-partisan Washington think tank New America.
• The report also found that many graduate students that participate in the recently modified federal Income-Based Repayment and Public Service Loan Forgiveness programs are unlikely to repay their loans, even if they take high-income jobs.
• Policymakers should change the federal programs to place greater limits on the kinds of jobs that graduate students can take and qualify for loan forgiveness, according to the think tank.

Dive Insight:

Without changes, the programs will have a greater impact on the market and borrowing, which will alarm lawmakers to the point that they might do away with the programs, New America warns. In some professions, the programs as currently designed provide benefits so large that the government can end up paying the entire graduate education bill. And students in certain fields will know from the beginning of grad school that they will be working only in fields that are covered by the programs, such as teaching and social work, so they will have no incentive to seek lower-priced degree programs.