MBA Graduate Debt Less Than Other Graduate Programs: MBA News

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A recent study from the New America Foundation’s Education Policy Program shows that the debt load of the average MBA graduate remained steady between 2004 and 2012, reports Bloomberg Businessweek. Although median debt for graduate school borrowers increased around US$17,000 during this time period, the typical MBA debt only increased US$627.

On top of this, the stats show that the percentage carrying MBA graduate debt is considerably lower than other graduates (only 57%). This is good news for aspiring MBAs looking to enhance their business skills and are, or at least have been worrying about the price tag that comes with the qualification (an average of $111,000 at Bloomberg’s top 10 schools).

Why has MBA graduate debt remained so stable for so long? For the 2004-2012 period the average Master of Arts debt load rose from $37,000-58,000, while the average law student debt went up from $88-140,000.

One obvious reason may be that an MBA graduate has already spent a good number of years working the professional sector before they join the course. The degree is a popular choice for candidates in lucrative sectors such as consulting and financial services and these candidates can generally pay for themselves. Indeed the data seems to back this argument up as despite the increase in the cost of tuition fees (the class of 2016 can expect to pay 4% more), there is still strong demand for the programs despite the relative stagnation of MBA salaries at around US$93,000.

MBA sponsorship readily available

Where does this leave prospective MBAs who can’t fund their own studies? One thing is certain; they are by no means left out of the game as there are plenty MBA sponsorship opportunities available. 78% of companies offer tuition reimbursement as part of talent retention polices, according to the Cornell HR Review, signifying a stable commitment to investing in the further education of its employees separate from market forces.

Even in the years following the crash, MBA sponsorship was on the rise. Lorrie Lykings, managing editor and director of research services of the Institute for Corporate Productivity told The New York Times in 2011: “What we’re hearing is that they are really ramping up tuition reimbursement programs…the war for talent is really going to heat up.”

In this competition the MBA seems to be the tool of choice and is increasingly becoming a “key, key recruitment tool,” said Lorrie, borne out today by the QS research which shows a continual rise in MBA job opportunities around the world.

Generally speaking, MBA sponsorship from companies tends to be for part-time rather than full-time MBAs as companies want the employees they invest in to put their skills to use straight away, so full time MBAs may lose out of this corporate sponsorship to some extent. However, school-provided funding tends to be focussed on full-time candidates, so whichever format you opt for, options are available.