No Surprises: MBA Debt Burden Climbs Again

mba debt

The debt just keeps on growing, as MBAs keep paying more for the education they get from elite business schools, with no sign of a reversal of the trend.

Of course, they keep making more money, too. More on that in a moment.

The Class of 2016 saw its debt burden grow across the elite MBA program landscape, with nine of the 10 full-time programs with the highest average debt seeing increases from the year before. Only one — Duke University’s Fuqua School of Business — saw its average individual debt drop, from $114,498 to $109,960. The rest of the top 10 schools saw their debt climb an average of $7,715. The biggest leap? MIT Sloan School of Management, where students saw a $14,650 jump in average individual debt and cash advance loan requests, to $121,822.

In total, students in the Class of 2016 racked up $261,736,988 in debt at the top 10 schools, according to a Poets&Quants analysis. The University of Pennsylvania’s Wharton School led the way with an average debt load of $130,446, followed by USC Marshall School of Business ($125,822), MIT Sloan, NYU Stern School of Business ($115,861), Dartmouth College’s Tuck School of Business ($115,340), Northwestern University’s Kellogg School of Management ($111,537), Georgetown University’s McDonough School of Business ($111,316), Duke Fuqua, Columbia Business School ($109,798), and Yale University’s School of Management ($107,339). (See the tables on pages 2 and 3 of this story for a more detailed breakdown.) All have increased in the last five years, some by huge leaps like MIT Sloan, up nearly 30% from $86,688 in 2011.


In all, 14 schools in the top 50 have seen their average student debt burden rise to six figures — 15 if you go by Bloomberg Businessweek calculations, which do not jive perfectly with P&Q‘s analysis. In 2011, there were only two schools with debt burdens of $100,000 or greater; in 2016, they range from $130,446 at Wharton to $101,667 at Carnegie Mellon University’s Tepper School of Business.

Wharton has led all schools in debt burden for each of the past four years, its average debt rising 10% from $117,200 in 2012. Whartonites who graduated in 2016 borrowed $49,895,595 to gain that MBA degree. What does that mean for the individual graduate and his or her brand-new MBA? Practically speaking, assuming the standard 6.8% interest rate over 10 years, someone who owes the average from two years at Wharton will pay 120 installments of $1,501, which also covers $49,695 in interest.

Of course, that might not be such a big deal since Whartonites in the Class of 2016 report median pay packages of $148,892 and better than 98% of grads got job offers.

Wharton was among five schools in the top 10 for debt that don’t disclose average debt or the percentage of students in debt; the others are USC Marshall, Northwestern Kellogg, Georgetown McDonough, and Columbia. The University of Chicago Booth School of Business is among four other schools in the top 50 that don’t release debt data; as Susan M. Guibert, executive director of media relations and communications at Booth, says, “We view (the data) as belonging to the students, not to us.” Contacted by P&Q, three other schools — Cornell University’s Johnson Graduate School of Management, Dartmouth Tuck, and the University of Wisconsin School of Business — provided previously unreleased statistics.


Wharton Dean Geoffrey Garrett said last year that financial aid is a priority for him because “I know we’re behind most of our peers in financial aid, and we don’t want to be in a place where we say to you that we cost $20K more than our peers. We want you to make choices based on what’s best for you, and not what’s most affordable for you.

“But that’s an enormous undertaking for our MBAs, because the mindset of our donors is, ‘Why should we aid MBAs when they come from big jobs and go to big jobs after they graduate?’ So I’m persuading them that we should consider the incredible opportunity costs that you’re all paying to be here. That’s the reality and it won’t go away.”

Wharton grads don’t seem to be having trouble finding employment. For others, student debt can put a big dent in their plans. That’s what University of North Carolina economist Dora Gicheva found last year when she analyzed survey data that tracked about 2,500 young people as part of an unrelated study analyzing how people make the decision to get an MBA. The survey, as reported on NPR’s Morning Edition, asked people questions before they took the Graduate Management Admission Test and then tracked them over several years.

Among the questions were some about marriage — and Gicheva found there was a connection between the amount of debt people carry and their choices about love and marriage. “Holding student debt,” she says, “decreases the likelihood of getting married. So roughly four years after graduation, those students who hold student debt were less likely to be married.” In fact, for every $10,000 young people carried in student debt, Gicheva found the likelihood of getting married in the seven years following graduation dropped by 3 or 4 percentage points.


Public university business schools aren’t exactly a safe haven from debt. Of the 25 schools whose MBAs graduate with the highest average loans, six are publics, including the University of Virginia Darden School of Business, where the average debt load for a full-time MBA is $106,710, the University of Michigan Ross School of Business ($102,665), and the University of North Carolina Kenan-Flagler School of Business ($95,582). Compare that to the debt accrued at Harvard Business School ($86,375) or Stanford Graduate School of Business ($80,091) — and compare the median compensation reported those two schools: at HBS, $158,080, up 4.5% from $151,211 a year earlier, and at Stanford an even more impressive $179,346, up 4.2% from $172,196 in 2015.

In fact, besides No. 1 Harvard and No. 2 Stanford (as ranked by Poets&Quants), there are lots of top-ranked schools that are relatively budget-friendly. Members of the Class 2016 at No. 3 Chicago Booth carried an estimated debt burden of $87,596 compared wth a median starting salary of $145,000; MBAs from No. 8 UC-Berkeley Haas School of Business carried $87,546 compared with a median base salary of $125,000; and No. 15 UCLA Anderson School of Management grads averaged $80,806 in debt but made a starting annual salary of $118,000. Meanwhile No. 13 Ross surprised a lot of people by reporting that median total compensation for Ross MBAs hit a record $150,606 this year, more than any other business school with the exception of Stanford and Harvard; Ross MBAs accrued an average of $102,665 in debt in the 2016 class.

Another fact that bears repeating: Stanford (47%) and Harvard (55%) don’t have as many MBAs overall who carry debt — at least not compared to Dartmouth Tuck (67.5%, the highest reported), Duke Fuqua (60%), Yale SOM (61%), and Virginia Darden (62%). The schools with the lowest reported percentage of students in debt are tied at just 26%: George Washington University School of Business ($83,174 average) and Michigan State University Broad College of Business ($55,666 average), though another eight schools range between 30% and 39%.

And what is the top-50 school with the lowest average debt? Wisconsin, at a mere $17,354 (up from $15,481 in 2015) — nearly $15,000 less than the next closest school, the University of Washington’s Foster School of Business ($32,047). Meanwhile, Wisconsin can dangle a decent average starting salary of $100,000 in front of prospective MBAs.

See next pages for our tables on debt burden, tuition cost, and percentage of students in debt at the top 50 U.S. business schools.

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