Wharton | Mr. Renewable Energy Consultant
GRE 320, GPA 3.3
Duke Fuqua | Ms. Health Care Executive
GMAT 690, GPA 3.3
Columbia | Mr. Government Shipyard
GMAT 660, GPA 3.85
Stanford GSB | Mr. Entrepreneurial Writer
GMAT 700, GPA 3.8
Tepper | Mr. Technology & Community
GMAT 650 Practice Test, GPA 3.05
Cambridge Judge Business School | Ms. Story-Teller To Data-Cruncher
GMAT 700 (anticipated), GPA 3.5 (converted from Australia)
UCLA Anderson | Ms. Apparel Entrepreneur
GMAT 690, GPA 3.2
Duke Fuqua | Mr. Backyard Homesteader
GRE 327, GPA 3.90
Kellogg | Mr. Military In Silicon Valley
GMAT 720, GPA 3.0
INSEAD | Mr. Typical Indian ENG
GRE 322, GPA 8.8/10
Wharton | Mr. Chemical Engineering Dad
GMAT 710, GPA 3.50
Cornell Johnson | Mr. Long-Term Vision
GMAT 710, GPA 3.28
Yale | Mr. Hedge Fund To FinTech
GMAT 740, GPA 61.5
Cornell Johnson | Ms. Chef Instructor
GMAT 760, GPA 3.3
Cornell Johnson | Mr. Electric Vehicles Product Strategist
GRE 331, GPA 3.8
Ross | Ms. Packaging Manager
GMAT 730, GPA 3.47
Stanford GSB | Ms. Healthcare Operations To General Management
GRE 700, GPA 7.3
Tuck | Ms. Women-Focused Ventures
GRE 321, GPA 2.89
Cornell Johnson | Ms. Healthcare Worker
GMAT 670, GPA 4
Harvard | Mr. French Economist
GMAT 710, GPA 15.3/20 in the French grading system 3.75-4.0/4.0 after conversion
Stanford GSB | Ms. Independent Consultant
GMAT 750, GPA 3.5
Berkeley Haas | Mr. Bangladeshi Data Scientist
GMAT 760, GPA 3.33
Stanford GSB | Ms. 2+2 Tech Girl
GRE 333, GPA 3.95
Ross | Mr. Automotive Compliance Professional
GMAT 710, GPA 3.7
Wharton | Mr. Digi-Transformer
GMAT 680, GPA 4
Chicago Booth | Ms. CS Engineer To Consultant
GMAT 720, GPA 3.31
Kenan-Flagler | Mr. Engineer In The Military
GRE 310, GPA 3.9

The First MBA Class With More than $100 Million In Debt

How did we come up with the estimate that Wharton’s Class of 2013 will rack up $112.4 million in debt and interest fees?

As conservatively as possible.

Here are the assumptions:

Roughly 75% of the Class of 2013 will graduate with debt (that’s the average percentage of borrowers among top business schools).

The average debt load for an MBA will be just shy of $124,000. The estimate is based on Wharton’s reported average debt per student in the Class of 2010: $109,836. It was adjusted to account for three years of increases in the cost of getting a degree. Those adjustments are equal to previous increases in the average debt numbers.

Many schools expect the average indebtedness of their students to increase due to the Great Recession. At Stanford Graduate School of Business, for example, the average debt of this year’s graduates jumped by 9.8% to $78,700 from $71,700 in 2010. “This was expected because these students started in the fall of 2009 right after the economic downturn in 2008,” says Jack Edwards, director of financial aid at Stanford. “I expect that my peer schools would also have been a similar increase.”

For each $124,000 borrowed, it was assumed that a graduate first maxed out a Stafford loan for $20,500 each year, or a total of $41,000 for two years, at an interest rate of 6.8% and a loan origination fee of 1%.

For the remaining $82,980 in loans, it was assumed that a graduate then borrowed at the same interest rate of 6.8% (it would more likely be higher, probably closer to 7.9%, according to loan experts), and a loan origination fee of 4%.

Using FinAid’s online loan calculator, a typical Wharton MBA borrowing the estimated average of nearly $124,000 would have monthly payments of $1,477 over ten years. The cumulative payments would come to $177,256, including nearly $53,000 in interest alone.

The total cumulative payments per graduate were then multiplied by 634 of the 845 enrolled students, roughly 75% of the class. Using a 10-year payback period, the total loan and interest payments for the class came to $112.4 million, including $33.5 million in interest.

This estimate is conservative based on the lower 6.8% interest rate chosen for the entire borrowed among as well as the fact that most students would likely pay back their loans over a period in excess of ten years.

Using a more likely 18-year payback period (the average for undergraduates who incur far less debt tends to be between 16 and 18 years), the total loan and interest payments for the class come to $140.7 million.

MBA DEBT: A BEAST OF A BURDEN