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Debt Piling Up Faster4Most Grad Students-But Not

 
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SamoneLenior View Drop Down
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    Posted: Apr 08 2014 at 3:50pm

Debt Is Piling Up Faster for Most Graduate Students—but Not MBAs

By Patrick Clark

A degree from one of Bloomberg Businessweek’s top 10 MBA programs will set you back more than $111,000 on average, at least before financial aid. If that kind of price tag causes you to break out in hives, you’re probably not a prospective MBA: New research shows the median debt load of a business school grad remained steady from 2004 to 2012, even as tuition costs increased, indicating that MBAs can generally afford the rising cost of a degree.

MBA grads’ static debt loads make them unique among graduates of advanced degree programs, according to research published on March 25 by the New America Foundation’s Education Policy Program. Median debt loads for graduate school borrowers increased to $57,600 in 2012, from an inflation-adjusted $40,209 in 2004, the study said. Over the same period, the debt load for the typical MBA borrower increased just $627, to $42,000. In contrast, the median debt load for a master of arts graduate rose to $58,539, from $37,965, according to the survey, while the debt load for the typical law student rose to $140,616, up from $88,634.

Let’s be clear about what’s being measured. The New America study used data from the Department of Education to determine the total amount of debt graduates from advanced degree programs are carrying by the time they’ve completed their studies. Therefore, the numbers above include loans used to pay for undergraduate degrees if those loans were not paid off by the time a student has wrapped up graduate studies. Moreover, students who graduate with no debt aren’t included in the median debt figures. (For those wondering: Fifty-seven percent of MBAs graduated with student debt in 2012, according to the study, up from 54 percent in 2004—the lowest percentage of any of the degree programs the study examined.)

The New America Foundation appears to have conducted the research with the motive of persuading policymakers and others to distinguish between undergraduate degrees, which the study calls “a must for anyone who wants to secure a middle-class income,” and graduate degrees, which usually aren’t “the foundation for economic opportunity.”

To that end, the study doesn’t offer any theories as to why MBA debt loads have remained stable. 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.

From 2007 to 2012, the average cost of MBA tuition increased by more than a third, as my colleague Erin Zlomek reported last week. At the same time, the average starting salary for a newly minted MBA has held steady at about $93,000 since 2008. If MBAs are paying for their degrees with money saved from their early professional careers, that would help explain why rising prices haven’t dampened demand for the degree.

Nunzio Quacquarelli, owner of QS Quacquarelli Symonds, a London company that studies MBA programs, told Zlomek that higher costs don’t phase prospective MBAs: “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.”


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sexyandfamous View Drop Down
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Post Options Post Options   Thanks (1) Thanks(1)   Quote sexyandfamous Quote  Post ReplyReply Direct Link To This Post Posted: Apr 08 2014 at 5:51pm
Originally posted by SamoneLenior SamoneLenior wrote:




A degree from one of Bloomberg Businessweek’s top 10 MBA programs will set you back more than $111,000 on average, at least before financial aid. If that kind of price tag causes you to break out in hives, you’re probably not a prospective MBA: New research shows the median debt load of a business school grad remained steady from 2004 to 2012, even as tuition costs increased, indicating that MBAs can generally afford the rising cost of a degree.


To that end, the study doesn’t offer any theories as to why MBA debt loads have remained stable. 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.

From 2007 to 2012, the average cost of MBA tuition increased by more than a third, as my colleague Erin Zlomek reported last week. At the same time, the average starting salary for a newly minted MBA has held steady at about $93,000 since 2008. If MBAs are paying for their degrees with money saved from their early professional careers, that would help explain why rising prices haven’t dampened demand for the degree.




Well, the first thing bolded points out why. Those people are graduating from the TOP 10 MBA schools. No wonder they pay their tuition faster; they have much more opportunities of getting a well paid job or getting a promotion after doing MBA at Wharton than if they did at XYZW college.
And since many are working already, their company offers to pay for tuition.

When my sister was AVP at one big bank, they offered to pay a nice amount of their employees' tuition, and she was amazed that no one was taking advantage of that, so she applied and got her Masters in a University in NY, but she wanted to later get a MBA at Wharton or Harvard, forgot which.
Where you got your degree from means a lot in that business.
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EPITOME View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote EPITOME Quote  Post ReplyReply Direct Link To This Post Posted: Apr 08 2014 at 7:50pm
My mentee was applying to B school and she was waiting on HBS  but had already gotten a full scholarship to a top tier school out West.  I advised her to take the full ride.  Apparently there are some companies though that if you intern with them will pay for your second year of B school which I didn't know.  She told me they don't advertise that often.

At Wharton they don't even have grades.  Those motherfkers don't do any real work.  The hard part is getting in honestly. 

There are programs out there that are for minorities that will give you a full ride to business school--and good ones too--top ones.

But I saw another article awhile ago that conflicted this one.
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Post Options Post Options   Thanks (3) Thanks(3)   Quote Princess Grace Quote  Post ReplyReply Direct Link To This Post Posted: Apr 08 2014 at 8:09pm
Well whatever yo do , do not ignore the student loan people, someone just called me the other day crying about her check being garnished and them taking her tax refund. She is the same person who spent the tuition reimbursement checks from her job. Confused

Edited by Princess Grace - Apr 08 2014 at 8:11pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote NARSAddict Quote  Post ReplyReply Direct Link To This Post Posted: Apr 09 2014 at 1:01pm
Originally posted by Princess Grace Princess Grace wrote:

Well whatever yo do , do not ignore the student loan people, someone just called me the other day crying about her check being garnished and them taking her tax refund. She is the same person who spent the tuition reimbursement checks from her job. Confused


How tragic and a bitter pill to swallow.
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