Wharton | Mr. Social Impact CPA
GMAT 740, GPA 3.5
Chicago Booth | Ms. RA For MBA
GMAT 710, GPA 3.80
Stanford GSB | Mr. Economics To Business
GRE 331, GPA 3.99
INSEAD | Mr. Tesla Manager
GMAT 720, GPA 3.7
Foster School of Business | Mr. Tesla Gigafactory
GMAT 720, GPA 3.0
Harvard | Mr. Financial Services
GMAT 750, GPA 3.8
Stanford GSB | Mr. African Entrepreneur
GRE 317, GPA 2.6
Stanford GSB | Mr. Tesla Intern
GMAT 720, GPA 3.9
Berkeley Haas | Mr. Looking To Learn
GMAT 760, GPA 3.0
Wharton | Mr. Infrastructure
GMAT 770, GPA 3.05
Chicago Booth | Mr. Asian Veteran
GRE 315, GPA 3.14
Stanford GSB | Ms. Artistic Engineer
GMAT 730, GPA 9.49/10
Cornell Johnson | Mr. Emporio Armani
GMAT 780, GPA 3.03
Harvard | Mr. Future Gates Foundation
GMAT 720, GPA 7.92
Harvard | Mr. Amazon Manager
GMAT 740, GPA 3.2
Harvard | Mr. MBB Consultant
GMAT 730, GPA 3.9
USC Marshall | Mr. Utilitarian Mobility
GMAT 740, GPA 2.67
McCombs School of Business | Ms. Second Chances
GRE 310, GPA 2.5
Duke Fuqua | Ms. Account Executive
GMAT 560, GPA 3.3
MIT Sloan | Mr. Data Mastermind
GMAT N/A; will be taking in May, GPA 3.6
London Business School | Mr. Aussie Analyst
GMAT 680, GPA 3.3
Darden | Mr. Sustainable Real Estate
GRE SAT 1950 (90th Percentile), GPA 3.7
Stanford GSB | Mr. Entrepreneurial Bassist
GMAT 740, GPA 3.61
Cornell Johnson | Mr. IT To IB
GMAT 660, GPA 3.60
Harvard | Ms. Lucky Charm
GMAT 690, GPA 3.2
Tuck | Ms. Green Biz
GRE 326, GPA 3.15
Harvard | Ms. URM
GRE 325, GPA 3.6

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.