Posted by: Louis Lavelle on October 17, 2008
It will come as a surprise to absolutely no one that the cost of business school is high and getting higher by the minute. But we’ve recently turned a corner on costs that I think bears noting.
It is this: there are places in this world where getting an MBA—and by that I mean nothing more than tuition and required fees—is now a six-figure proposition. At Harvard Business School ($101,660) and Wharton ($100,860) each of those three little letters will set you back more than $33,333.33. A third school, Duke ($99,906), is teetering on the brink of six figures, and perhaps four more will join that exclusive club within a year.
Add in the cost of living and forgone salary, and there are now five schools where the total cost of an MBA is in excess of $300,000—Wharton ($320,000), Harvard ($308,300), Chicago ($305,965), Stanford ($302,664), and Columbia ($301,178). London Business School is about $600 away from breaking the $300K barrier, and at least three other schools will probably do within a year.
Of course you can still get a perfectly servicable MBA for about half that...it just won't have that Top 10 pizzaz.
As expensive as the top programs are, I still believe they're a bargain, especially when you look at lifetime earnings. Which is probably why schools like Stanford (8% selectivity) have more applicants than they know what to do with.
Still, I sometimes wonder about the impact of the high-cost of b-school. If the doors are closed to all but the very rich (generous financial aid packages notwithstanding) will it create a generation of business elite completely disconnected from the concerns of the merely middle-class? Will the nation's most promising entrepreneurs avoid b-school, and the staggering debts they won't be able to repay for years? Will young men and women who want to use their newly minted management skills to help eliminate poverty and hunger and other world problems, and aren't expecting any big stock option grants for their troubles, do the same?
I don't know. But now that we've entered the era of the $100,000 degree, I think a discussion of the high cost of b-school, and what it means for students, business, and the broader economy is in order. Any takers?