MBA Debt Burden: The Embarrassing Data Point That B-Schools Stopped Reporting

‘MAKE SURE LOAN REPAYMENT IS NOT THE LEADING FACTOR’ IN CHOOSING A JOB

Tuition, as we see below, has risen at almost every school (though some schools, like Harvard and Chicago Booth, have frozen tuition in the last three years). The lone exception is USC Marshall, where it declined by about 4%. At just five schools where it’s up — Stanford and Chicago among them — has it risen by only single-digit percentages. But MBA salaries are going up too, and while placement rates are down across the board, that’s largely because of a worldwide health crisis that won’t be a factor in future recruitment seasons. It boils down to this: With the right approach, an MBA is still a life-improving degree in most cases. Debt doesn’t sink the hard-working B-school grad.

That’s what Les Williams, a 2005 HBS graduate, emphasizes in a recent blog post. Williams financed his MBA through scholarships and fellowships, but also through significant public and private student loans. “I could have put more money down upfront from my salary, but I viewed HBS as an investment and I preferred to take the loans and pay them off over time,” he writes. Over the last 15 years he has worked in technology, real estate development, and entrepreneurship, with varying compensation — and varying loan repayment schedules.

It took a decade and a half, but Williams has paid off his private loans and has a balance of $15,000 on his public loans, making his payments about $224 per month. Over the years, he says, he chose not to use his bonuses toward his loans — “but instead invested it and used it to pay for other things.”

His advice? “Find a job that fits around you, and then work out the loan situation,” Williams writes. “Resist the temptation to find a high-paying job in order to lump-sum pay your loans and live a lifestyle you can’t support in a job you don’t actually want. Understand why you are doing it. Make sure loan repayment is not the leading factor.”

U.S. News will publish new data along with its MBA ranking later this month, and we will re-examine the debt numbers then. Will more or fewer schools report their grads’ debt burden? If history is a guide, the answer is fewer.

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