Business school is expensive, so pricey that MBA students are racking up huge debts to get the degree. In many cases this is a bet on a brighter future. For a two-year program, you make the decision to leave a well-paying job, forgoing between $100,000 and $200,000 in compensation. And then you have tuition, fees, room and board, and living expenses that can easily total $150,000 or more during the two years of study. As much as the starting pay packages for MBAs can dazzle, these numbers make the stomach churn.
So exactly how much money are students borrowing to get the degree? The latest data from U.S. News & World Report shows that it varies greatly from school to school. At the top of the list, the graduates who have the most debt hail from Wharton, the only school where MBAs leave with six-figure debt totals. The average debt burden of a Wharton grad is a whopping $105,489, according to U.S. News. Next on the list? Graduates who get their MBAs from Yale ($99,418), Duke ($88,050), Carnegie Mellon ($87,592), and Chicago ($86,758). The least debt? According to U.S. News, it’s MBAs from Fayetteville State University in North Carolina ($3,810).
What do these numbers suggest? The easy interpretation is that people who go for MBAs are willing to make major sacrifices to get the degree in both opportunity and real costs. They’re even willing to go more deeply in debt for their education than they probably will on any other purchase, other than the acquisition of a home. The more difficult interpretation gets to what these different numbers tell you about the individual schools and the students who attend them.
Are the schools at the top of the list there because their scholarship money is less than adequate? Do they tend to accept students whose parents won’t shoulder any of the cost of getting the MBA? Or do these students have bank accounts that can’t begin to offset the huge costs now charged for the degree? Hard to know, for sure. But it is surprising that the average indebtedness of a Wharton MBA is $28,531 more than it is for a Harvard MBA. That’s 37% more on average.
One of the biggest shocks? The fact that Pepperdine University comes in at number 15. Why in the world are students at Pepperdine’s Graziadio School going into debt to the tune of nearly $72,000 for that MBA degree? The school fails to make our list of the top 50 in the U.S. That’s a heavy debt load for a degree that lacks top-50 finish.
|Business School||Average Debt Burden|
|1. Pennsylvania (Wharton)||$105,489|
|2. Yale School of Management||$99,418|
|3. Duke University (Fuqua)||$88,050|
|4. Carnegie Mellon (Tepper)||$87,592|
|5. Chicago (Booth)||$86,758|
|6. Dartmouth (Tuck)||$85,917|
|7. Michigan-Ann Arbor (Ross)||$84,798|
|8. Cornell (Johnson)||$83,700|
|9. Stanford Graduate School of Business||$80,677|
|10. New York University (Stern)||$78,887|
|11. Georgetown (McDonough)||$78,746|
|12. Harvard Business School||$76,958|
|13. Vanderbilt (Owen)||$76,957|
|14. UNC-Chapel Hill (Kenan-Flagler)||$75,251|
|15. Pepperdine (Graziadio)||$71,680|
|16. University of Texas-Austin (McCombs)||$69,552|
|17. Rice University (Jones)||$68,450|
|18. George Washington University||$66,989|
|19. University of Virginia (Darden)||$66,272|
|20. Notre Dame (Mendoza)||$65,925|
|21. UCLA (Anderson)||$64,030|
|22. Berkeley (Haas)||$63,748|
|23. Loyola University/Chicago||$62,826|
|24. Case Western (Weatherhead)||$59,731|
|25. Emory (Goizueta)||$58,440|
Source: U.S. News & World Report, average indebtedness of the 2009 graduating class.