A Wall Street Journal analysis of federal student loan showed that graduates of almost 98 percent of MBA programs in the US made more money in salary within two years than they had accrued in debt for their degree. At the most prestigious of programs, such as Harvard Business School and Stanford’s Graduate School of Business, over half of graduates were able to repay their federal loans within two years of graduation.
It is important to note that this analysis only includes the salary and student loan debt for students who took out federal student loans. Many students also take out private loans at lower interest rates. Harvard’s Managing Director of MBA Admissions, Chad Losee, confirmed that over half of Harvard’s 2020 graduates (56 percent) graduated with debt, and that the average was $79,000 in combined federal and private loans.
The high rate of return on investment for MBA programs may be attributed to the fact that many MBA students come into the program with work experience, which drives up the starting salaries they are offered at graduation. Additionally, many who work in high-paying industries such as finance and consulting tend to gravitate towards the degree, and return to those or other high-paying industries.
Tuition costs and potential debt load, as well as possible starting salaries and cost-of living post-degree may be easy to overlook at first, but they are important to consider during the school selection process.
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