Conspicuously absent from the list (below) are the debt numbers for Columbia Business School, MIT’s Sloan School of Management, the University of Southern California’s Marshall School, and Washington University’s Olin School. Those institutions apparently did not disclose this data to U.S. News. But it’s a sure bet that all of them would be among the top 25 if they had provided the information, given their high levels of tuition and similar student pools.
WHY HARVARD & STANFORD MBAS GRADUATE WITH MORE THAN A THIRD LESS DEBT THAT MBAS AT WHARTON.
Another question raised by the numbers: Why do MBAs at Harvard and Stanford graduate with more than a third less debt than those at Wharton? Wharton officials declined to respond. Unlike most business schools which use scholarship money to attract the best students, Harvard doles out some $21 million a year in fellowship grants to students based on financial need, not merit. The primary aim of its fellowship program is to keep debt at low levels. Harvard measures financial need by taking into account an admitted applicant’s income for the last 3 years, assets owned, spouse’s income (if any) and outstanding undergraduate debt. In other words, if an applicant has the wherewithal to pay for his or her MBA experience, he’s unlikely to get fellowship support.
Our conclusion: Harvard and Stanford are far more generous with their scholarship packages than Wharton so the sticker price of an MBA at Harvard and Stanford is more likely to be discounted. Harvard, for example, says that its students receive average scholarships of $48,200 over their two years at the school. Stanford reported that its students received $20,644 in fellowship money in the last academic year, or roughly $41,300 over the two years of the MBA program. Wharton does not disclose this number.
Wharton can not only lay claim to having the highest student debt loans. Compared to Harvard, Stanford, Dartmouth, and other top schools, it also has been less successful at placing recent graduates in jobs. A full three months after commencement, nearly 16% of Wharton’s class failed to be employed, versus just 7.6% at Stanford and 9.7% at Harvard. So more Wharton students are also likely to have trouble meeting their higher loan payments.
Once you add an effective interest rate of 7.65% from government loan programs, these debt burdens grow quickly over the years. If a Wharton MBA paid down his $110,000 over the next 10 years, the total cumulative payments would come to more than $180,000. With a repayment schedule over 25 years, the debt would balloon to more than $280,000–not accounting for any deferrals or penalties for missing a payment.
|School||2010 Average Debt||2009 Average Debt|
|1. UPenn (Wharton)||$109,836||$105,489|
|2. Dartmouth (Tuck)||$96,292||$85,917|
|3. Duke (Fuqua)||$92,827||$88,050|
|4. Michigan (Ross)||$92,734||$84,798|
|5. Northwestern (Kellogg)||$87,256||NA|
|6. Cornell (Johnson)||$86,900||$83,700|
|7, Yale School of Management||$86,895||$99,418|
|8. New York University (Stern)||$85,198||$78,887|
|9. Georgetown (McDonough)||$82,577||$78,746|
|10. Vanderbilt (Owen)||$80,857||$76,957|
|11. Chicago (Booth)||$79,539||$86,758|
|12. Texas-Austin (McCombs)||$77,644||$69,552|
|13. North Carolina (Kenan-Flagler)||$77,124||$75,251|
|14. Carnegie Mellon (Tepper)||$75,570||$87,592|
|15. California-Berkeley (Haas)||$73,186||$63,748|
|16. Harvard Business School||$73,110||$76,958|
|17. Virginia (Darden)||$72,027||$66,272|
|19. George Washington||$68,959||$66,989|
|20. Pepperdine (Graziado)||$66,242||$71,680|
|22. Notre Dame (Mendoza)||$62,858||$65,925|
|23. UCLA (Anderson)||$62,711||$64,030|
|24. Wake Forest (Babcock)||$61,846||NA|
|25. Emory (Goizueta)||$60,435||$58,440|
Source: Business schools reported to U.S. News & World Report.