Elite Business Schools Hiking Tuition
You had to know this was coming. But get ready for the sticker shock anyway.
With next year’s classes filling out, business schools are turning their attention to tuition. With 3 to 5% increases being the norm, you shouldn’t be surprised that top schools are raising tuition by 4%, on average, for next year, according to Bloomberg Businessweek. At this rate, students can expect to pay up to $60,000 a year in tuition and fees at elite schools. When you factor in expenses, that cost rises to $150,000 of debt by graduation.
And it’s only going to get worse, according to Nunzio Quacquarelli, owner of QS Quacquarelli Symonds, a firm that analyzes MBA programs. He tells Bloomberg Businessweek, “At U.S. business schools, there has been a tendency to assume prices can go up every year.” And that’s partially on the students’ shoulders. “MBA candidates aren’t highly price sensitive,” he says. “They’re not going to bat an eye at $64,000 vs. $58,000 a year when it comes to the value of their education and potentially benefiting their career.”
So where are these increases going? One place is scholarships and fellowships, according to Quacquarelli’s research. By reinvesting this money in promising candidates, schools are able to continue attracting the best and brightest (sometimes at the expense of classmates footing a higher bill).
Then again, the Dardens, MITs, and Stanfords aren’t alone in hoisting tuition. The average cost of MBA tuition is rising across the board, from $32,473 in 2007 to $44,476 in 2012–a 27% increase, according to the Association to Advance Collegiate Schools of Business. And the average price of a private school MBA has jumped to $55,451.
But these increases can’t go on indefinitely for every school. The average MBA starting salary has remained stagnant at $93,000 since 2008, according to Quacquarelli. Even if rising salaries in various sectors have balanced out compensation cuts in finance, students will eventually get wise. But it will take time for schools to follow suit. As Quacquarelli notes, “There has to be some price stability. At some point, U.S. business schools will continue to increase tuition, just at a lower rate.”
Source: Bloomberg Businessweek