Just two years ago, the Consumer Financial Protection Bureau estimated that nearly 33 million American workers eligible for student loan forgiveness weren’t taking advantage of the programs. Times have certainly changed, as the federal government earlier this year revealed that these program were now so popular they cost nearly $22 billion more than they anticipated. But it doesn’t appear the increase in use for such plans is by those who might benefit the most.

Instead, as a new report from the Wall Street Journal points out, they’re being utilized by those that often have the most debt and the best chance of actually earning enough money to one day repay their obligations: graduate students.

The promise of student loan forgiveness has drawn thousands of students to take out additional loans to pursue post-secondary education, a move critics say is a misuse of federal programs meant to keep the most vulnerable student borrowers from defaulting.

Student loan debt has now topped the $1.9 trillion mark, thanks in part to a surge of students taking out loans in excess of $100,000 to finance their graduate school education.

As the WSJ points out, postgraduate borrowers account for about 40% of all student debt, but represent just 14% of students in higher education. In all, nearly 1.82 million consumers have graduate student loans exceeding $100,000.

Unlike many government loan programs – such as those for undergraduates and home buyers – that put a limit on how much a borrower can obtain, programs for graduate students, like GradPLUS, don’t place a limit on the amount that can be borrowed.

These unlimited loans, coupled with federal forgiveness and income-based repayment programs, have created a “moral hazard” by allowing borrowers to amass debts they have little hope or intention of repaying, critics of income-based repayment programs such Pay As You Earn, tell the WSJ.

It’s these programs that some post-secondary graduates say propelled them to pursue higher degrees and, in turn, take out more loans, creating a cycle of borrowing.

That was the case for Bonnie, who owes almost $209,000 after earning her doctorate degree from a for-profit college.

She tells the WSJ that after borrowing for her bachelor’s degree, she decided to pursue her master’s and then doctorate as a way to postpone making student loan payments.

“There’s no way to pay it afterward. It’s a continuous cycle. I’ll be the retiree that’s getting Social Security garnished,” she says of her student loan debt.

Still, she has hopes that federal income-based repayment programs will help.

The situation is similar for Virginia, a public defender in Florida, who says the promise of forgiveness was the only reason she even considered taking out additional loans to attend law school.

She now owes $256,000 in student debt, but pays just $330 a month under a federal income-based repayment program that allows borrowers to only put 10% of their discretionary income toward their student loan balances on a monthly basis.

Virginia’s plan is to have her entire balance forgiven in seven years under a debt-forgiveness program meant to encourage students to become teachers, public defenders and other public-service employees.

Under that program, borrowers who work full-time for a government agency or a nonprofit employer – and make on time payments of their debt – will have their balances forgiven after 10 years.

While these programs have likely increased the number of individuals working in positions deemed to benefit society, the influx of graduate students covered by the program means those being benefited might actually be those that need the least amount of help.

In many cases doctors and lawyers will go on to make six-figure salaries – often enough to manage their debts without assistance from government-run programs.

According to the WSJ, the Obama administration is reportedly taking steps to ensure that these federal programs are better targeted to borrowers who need help the most.

Grad-School Loan Binge Fans Debt Worries [The Wall Street Journal]

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