What MBAs Borrow & How Much It Ultimately Costs Them

MBA student debt can be considerable

There’s no getting around it. For many people, getting a prestigious MBA experience is an expensive proposition. It often leads young professionals into considerable MBA student debt.

Just how much borrowing people do to obtain an MBA will likely surprise you. But the sums spent are an investment in yourself and your future. And the rewards, both tangible and intangible, do pay off over the course of one’s career.

Even so, the MBA student debt numbers can feel like a difficult mountain to climb. The highest borrowing occurs at The Wharton School where graduates who borrow to get an MBA there leave campus with median debt of $161,635, higher than any other business school in the world. That’s more than the cost of a brand new Maserati Gran Turismo.

WHARTON SAYS IT IS ‘NEARLY IMPOSSIBLE TO CALCULATE THE RETURN ON INVESTMENT OF AN MBA’

Unlike Harvard Business School, which is among the most generous in fellowship grants and the most transparent in reporting on them. Also unlike Harvard, Wharton declines to disclose graduates’ average indebtedness to U.S. News & World Report which also gathers info on debt. Wharton is mum when it comes to how many of its students receive scholarships along with stats on the average award. But that may well explain the nearly $50,000 more in borrowing at Wharton than at Harvard.

Wharton obviously knows about the gap with its peer schools. It devotes an entire section of its website to “the value and ROI of a Wharton MBA,” even referring applicants to a popular Poets&Quants analysis that shows the 20-year earnings of MBAs. According to the school, “It is nearly impossible to calculate the total return on investment of an MBA degree. In addition to increased earning potential and career opportunities, there are countless, less quantifiable benefits of the two-year, full-time experience. Most significantly, you are bound to meet and engage with hundreds of classmates and faculty that will challenge your worldview, help you discover strengths and weaknesses, and open your mind to brand new ways of thinking. These relationships will stay with you for a lifetime.”

And all that is true. These latest numbers on MBA student debt come from surveys of MBA graduates by Bloomberg which publishes the numbers in an ROI calculator. They can differ markedly from other existing estimates (see MBA Debt Burden At The Top 50 U.S. Business Schools: Where Grads Owe The Most & Least). According to the out-of-date data compiled by the College Scorecard of the U.S. Department of Education, Wharton MBAs from 2014 to 2019 incurred average debt of $85,570, much lower than these very recent numbers from Bloomberg.

MEDIAN MBA STUDENT DEBT: $58,415

In any case, the new data shows that MBA students are willing to borrow large sums of money for the degree and the network. At Dartmouth College’s Tuck School of Business, median debt is an astounding $146,102. At Cornell’s Johnson Graduate School of Management, the median MBA student debt is an astounding $145,607. At Northwestern University’s Kellogg School of Management, it’s an eye-popping $144,714. MBAs who graduate from the University of Michigan’s Ross School of Business close out the top five in borrowing: $137,941.

Across the sample of 77 MBA programs. Bloomberg estimates that the median MBA student debt is $58,415, with graduates paying interest of $9,043 during the ten-year term of a student loan. That makes the Wharton estimate more than $100,000 above the median for all the schools, though the rewards of a Wharton MBA can far exceed many of those other schools. It also means the estimated interest payments on that Wharton debt is huge: $25,021.

All told, MBA grads from 22 schools rack up MBA student debt in six figures, while 42 of the 77 schools tracked by Bloomberg are graduating students with debt at $50,000 or above. Typically, the debt is highest among the big brand schools. The average MBA student debt burden for the M7 programs comes to $131,366.

Where Students Borrow More Than $50K For Their MBA Experience

Notes: Estimate of interest is based on a ten-year loan, with an interest rate of 5.47%. Total cost includes tuition, fees, health insurance and living expenses but not foregone earnings

DON’T MISS: RANKING MBAs BY RETURN-ON-INVESTMENT or QUIT A SIX-FIGURE JOB FOR AN MBA? THAT’S WHAT  STUDENTS HAVE DONE AT THESE TEN B-SCHOOLS