Student loan reform has been a major policy initiative of the Obama administration and most of the changes made to these programs have been advantageous to borrowers.

But a change that goes into effect in July of next year needs closer examination to know if it’s a good thing for student loan borrowers needing to take out loans for graduate school.

A recent article at the Mint Life blog broke this down to its most basic: for current borrowers there’s no change but for future grad school students, the cost of debt will be higher.

Why This Matters

A lot of readers are probably wondering why this is such a big deal. Doctors, lawyers and other professionals coming out of grad school should be able to repay any debt with ease, right? Not so fast.

For one, everyone who goes to grad school also completed undergraduate studies. That means that they have already shelled out a chunk of change for their first four years of college and for most it also means that they borrowed to do it.

Student loan borrowers are already in sorry shape, with student loan debt now surpassing credit card debt at over one trillion dollars and the average borrower now leaving school more than $25,000 in hock. So debt from graduate school just adds to the pile they already owe.

Secondly, when in grad school, most students aren’t earning what they could if they were just working. This is especially true for medical and law students who typically study full time with little additional income. So these grads are well behind the curve on getting their undergraduate loans repaid.

Finally, many grad students (like many undergraduate students) emerge to find that the lucrative careers they thought they’d fall into fail to emerge. This is especially true in the legal trade where many grads now believe that law school is itself a scam exactly because incoming students are promised big-paying jobs only to find the real world offers very different.

So in the end, it’s unfortunate that the government has elected to in effect raise the cost of going to grad school for so many Americans. However, there’s a silver lining to this cloud if it makes more students reconsider whether or not it’s really worth taking on additional debt for that additional degree.