The top business schools may be hiking their tuition, but that doesn’t mean MBAs are accruing more debt. In fact, MBAs carry far less debt than students in any other graduate program.
That was among the findings released by the New America Foundation’s Education Policy Program this week. In their research, the foundation found that median debt load increased just 1.5% from 2004-2012, rising from $41,373 to $42,000. In contrast, law school debt rose 37%, from an inflation-adjusted 88,634 to $149,616, over that same span. Similarly, masters of arts grads saw their median debt jump 35%, from $37,965 to $58,539 in eight years.
Overall, graduate school borrowers saw a 30% increase in median debt, going from $40,209 of debt in 2004 to $57,600 in 2012. Bloomberg Businessweek adds that students graduating from its top 10 MBA programs leave school with around $111,000 in debt, “on average.”
So what makes MBA students much less likely to stumble into a financial hole? Bloomberg Businessweek offers a few theories:
“One likely reason is that many MBAs enroll in business school after having spent several years in the professional workforce, often in such lucrative fields as finance or management consulting. Some MBAs also get assistance with tuition from their employers, though company sponsorship of employee education is said to be waning. The upshot is that many MBAs seem to have saved enough to partially offset the cost of their education. That’s probably less true of people studying to be lawyers, doctors, or college professors.”
Most surprisingly, MBAs are likely incurring less $42,000 in debt when all graduates are factored into the equation. Why? The New America study relied on Department of Education data, which doesn’t include students who graduate without debt. According to Bloomberg Businessweek, 43% of MBAs graduated without student debt in 2012 (a 1% increase over 2004), which is the lowest percentage of any graduate degree program.
Bottom line: Wages may be static, but employment is trickling up and debt is manageable. Maybe there is something to the “It’s a great time to be an MBA” mantra.
Source: Bloomberg Businessweek