Stanford GSB | Mr. Navy Officer
GMAT 770, GPA 4.0
Stanford GSB | Mr. MBB to PM
GRE 338, GPA 4.0
Chicago Booth | Mr. Semiconductor Guy
GMAT 730, GPA 3.3
Harvard | Mr. Sales To Consulting
GMAT 760, GPA 3.49
Harvard | Mr. Polyglot
GMAT 740, GPA 3.65
Duke Fuqua | Mr. Enlisted Undergrad
GRE 315, GPA 3.75
Kellogg | Mr. Danish Raised, US Based
GMAT 710, GPA 10.6 out of 12
Darden | Ms. Unicorn Healthcare Tech
GMAT 730, GPA 3.5
Wharton | Mr. Sr. Systems Engineer
GRE 1280, GPA 3.3
Tuck | Mr. Consulting To Tech
GMAT 750, GPA 3.2
Stanford GSB | Mr. Rocket Scientist Lawyer
GMAT 730, GPA 3.65 Cumulative
Darden | Mr. Stock Up
GMAT 700, GPA 3.3
Stanford GSB | Mr. Classic Candidate
GMAT 760, GPA 3.9
Cambridge Judge Business School | Mr. Social Scientist
GRE 330, GPA 3.5
Darden | Mr. Federal Consultant
GMAT 780, GPA 3.26
INSEAD | Mr. Consulting Fin
GMAT 730, GPA 4.0
INSEAD | Ms. Hope & Goodwill
GMAT 740, GPA 3.5
Harvard | Mr. Milk Before Cereals
GMAT 710, GPA 3.3 (16/20 Portuguese scale)
Chicago Booth | Mr. Guy From Taiwan
GRE 326, GPA 3.3
Darden | Mr. Leading Petty Officer
GRE (MCAT) 501, GPA 4.0
Columbia | Mr. NYC Native
GMAT 710, GPA 3.8
Tepper | Mr. Leadership Developement
GMAT 740, GPA 3.77
Harvard | Ms. Athlete Entrepreneur
GMAT 750, GPA 3.3
Darden | Mr. Education Consulting
GRE 326, GPA 3.58
Harvard | Ms. Ambitious Hippie
GRE 329, GPA 3.9
Stanford GSB | Mr. Unrealistic Ambitions
GMAT 710, GPA 2.0
Stanford GSB | Mr. Equal Opportunity
GMAT 760, GPA 4.0

Student Loans Get A Bit More Pricey

Going to business school just got a little more expensive.

Each year, it’s pretty much a rite of passage that every school hikes its tuition and fees between 3% and 5%. But this year, there’s a less visible but far more enduring increase—in the cost of student loans to get the MBA.

The impact of those changes on an MBA borrowing $100,000 or more to finance her education could add more than $5,000 to the total cost of the degree. Average MBA debt currently ranges from Wharton’s $114,339 to Chicago Booth’s $71,839. The median for a top ten business school was about $88,500 last year. The minimum interest on the median debt would run to more than $40,000 if the loan were repaid within ten years.

ORIGINATION FEES ON STUDENT LOANS JUMPED ON JULY 1

The increases start from day one, with higher loan origination fees. Those fees on Stafford loans have doubled, from 0.5% to 1% as of July 1. In the past, students who took out Stafford or Federal Plus loans had to fork over a 0.5% origination fee on their borrowings. If they missed any of their monthly payments in the first year, the government would add an extra 0.5% onto their loans. Now the fees are 1% from the start, no matter what.

Of course, the lower interest Stafford loans are limited to a maximum of $20,500. Most students then pile on more borrowing by taking out a federal Graduate Plus loan. The origination fee for this loan increased to 4% on July 1, up from 2.5%. The interest charge on a Stafford loan is currently 6.8%, while the charge on a Graduate Plus loan is 7.9%.

GOVERNMENT ACCRUES INTEREST ON STAFFORD LOANS WHILE YOU’RE STILL IN SCHOOL

Besides the increases in origination fees, students also will have to begin paying interest on their Stafford loans immediately.  In the past, no interest accrued on those loans as long as they were in school and for six months after graduation. That quickly adds up over a two and one-half year period: A student maxing out their $20,500 Stafford loan at the start of an MBA program, will rack up an additional $3,485 in interest.

Christopher Chapman, president and chief executive of Access Group, a national nonprofit lender focused on graduate and professional schools, told BusinessWeek he is worried about the impact the new loan regulations will have on people considering graduate programs.

“I don’t know whether that will [affect] a person’s decision to go and get an MBA, but it certainly adds to their debt burden,” he told BusinessWeek. “It is a meaningful increase in debt to what is already a fairly highly debt load coming out of an MBA program for most people.”

DON’T MISS: GRADUATING WITH AN MBA AND LOTS OF DEBT or A HARVARD MBA GOES ON A CRASH FINANCIAL DIET AND PAYS DOWN HIS $101K IN STUDENT DEBT

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.