In America, adding a MBA to your academic portfolio could be a really rewarding or worthwhile achievement. Being able to afford it is another pertinent question that needs to be answered. After considering the financial mountain that typically stands between you and a MBA degree, you`d likely recoil and rethink the aspiration. For many who have been financially bold enough to take on the project, they later found themselves wallowing in pits of indebtedness to the federal student loan scheme, sometimes sooner than they expected. The average cost of a two-year MBA program in the US today is estimated at $162,326 at Wharton School, and $151,368 and $146,880 at MIT Sloan and Harvard Business School respectively. Young graduates, and certainly not many professionals with years of experience can measure up to that.
Interestingly, the fees have been rising over the past few decades; the average cost of attending a top U.S MBA has increased even faster than the rate of inflation. Without doubt, it will rise higher in coming years. Forbes report that the cost of college education is increasing almost 8 faster than wages. Unfortunately, this trend leaves a lot of college and postgraduate students buried under a huge, growing stack of student debt. Connor Hays reports this as a crisis – a student debt crisis that is mounting yearly. The student loan system have a massive issue in their hands because this is not sustainable; the numbers of loan defaults is growing steadily according to Lori Trawinski et al. Affording college education in the US is gradually seeming like a luxury for many American homes.
Ethnic and racial minorities happen to be the worst hit by this crisis. Dirk Witteveen and Paul Attewell report that students from lower income homes and self-sponsoring students find it harder to cope with the repayment burden that others from supporting families. The social inequality captures most black and Latino students who do not have strong supports from home. Besides having to deal with heavy loans while schooling, they have to face the grim prospect of entering a racially unequal labor market after college. On the other hand, Witteveen and Attewell also noted that some students who graduate with large loans might face financial pressure to take a job immediately after graduation, because of their need to start paying off those loans, while their counterparts with less debt might feel freer to delay taking a job until they can find a better-paying position, or even decide to continue their education.
The sustainability of college programs raises serious concerns. A proper analysis of the student debt financing scheme makes obvious the need for a change in paradigm. A study shows that student retention in college is higher when financial assistance is given as federal grants and much lesser when it is accessed in form of loans. In other words, government support, for higher education, to colleges and universities is an impactful method for fighting back the growing debt rate.
References
- MBA tuition fees (2019/2020): Calculating the соѕt of уоur ѕtudiеѕ. Rеtriеvеd from https://www.mba.today/guide/fees/
- Camilo Maldonado (2018), Price Of College Increasing Almost 8 Times Faster Than Wages. https://www.forbes.com/
- Connor Hays (2018), The Student Debt Crisis. Bloom Economic Research Division, pg. 1-11.
- Lori A. Trawinski, Susanna Montezemolo and Alicia Williams (2019), The Student Loan Debt Threat: An Intergenerational Problem. AARP public policy institute, pg. 1-10.
- Witteveen, Dirk and Attewell, Paul (2019), “Social Dimensions of Student Debt: A Data Mining Analysis”. Journal of Student Financial Aid: Vol. 49: Iss. 1, Article 1.
- Hossler, D., Dundar, A., Shapiro, D.T. (2013), Longitudinal pathways to college persistence and completion: Student, institutional, and public policy perspectives. In L.P. Perna & A. Jones (Eds.). The state of college access and completion (pp. 140 – 165).