(1) I don't know where you got the 20K figure from. According to ASA the average undergraduate debt per borrower was 23K in 2008 and the total cumulative debt was 60K for phd students. Overall, 70% of all graduate students borrow money sometime in their college career with an average debt of 47K. It's quite the common myth that grad school is mostly scholarship funded. That's true for phd students in the hard sciences. But it's more rare in other fields. Overall, 45% of people in phd programs borrow. All stats from: Student Loan Debt Statistics - American Student Assistance One of the issues that these stats don't reveals, however, is the impact of interest. Many students will wind up paying twice what they borrow due to interest. This is especially true now that subsidized loans have been eliminated for graduate students. I detest that change with a passion because it makes school cost more without being honest about it up front. It's important to look at the system as a whole because as I suggested above it's a set of interlocking pieces. Cutting student loans is going after the root because in order to get the phd you need a college degree in the first palace. If you can't afford undergrad you can't get a degree and if you can't get a degree you can't even get into a phd program. (2) I agree which is why I qualified it with "all other things being equal." Because one can imagine a nightmare scenario when the whole thing spirals down the tubes. I don't think it's likely though provided it's managed properly.