The MBA is more of a credentialing and marketing expense than an experiential one. For example, some big accounting/finance firms only hire "top MBAs". No amount of garage-startup experience is going to get you in there; remember that not every educational/experiential endeavor can/should be viewed via the "Is this good for a startup?" lens. Don't underestimate the network effects of high-powered rich people who all went to the same school: many companies are unfortunately not meritocracies.
I agree with you. I'm not sure if I could justify spending 180k to work for a company that views credentials with higher weight than experience. If I worked for such a company, I would always be worried about the new hire coming in with even higher credentials.
I suppose it depends what you want to do with your life. Some people are happy to pursue an MBA for the signalling effect. At the very top tier of institutions, if you have a particular career track in mind, this is not a bad idea.
It might not appeal to most HN readers but there's still a rational argument for the degree, even at this price.
I'm not sure how many people attending Stanford GSB are interested in creating minimal viable products.
At a $185,000 price tag, you're buying yourself into a job in big three managerial consulting (McKinsey, Bain, Boston Consulting Group), or finance, which generally comes with a very nice starting salary, signing bonus, and a built-in career trajectory.
Most consultants are either deep in consulting in 10 years and making very nice money (mid to high 6 figures, low 7) as a partner or manager or have moved on to vice president or higher level positions at client organizations you've consulted for.
And then what? He /she will always be a Stanford MBA and as much as some VCs hate them, blue chips companies hire them on the spot. The problem is with second and third tier MBA and Law degrees.
(Maybe VCs hate them since they try to create regular companies and that increases the value before VCs invest in them.)
Assuming you also worked instead of doing the school, some quick back of the napkin math places it as a $25,000 income for the rest of your life for doing absolutely nothing.
Though I suspect $25K isn't even small a blip on the income statements of these people.
I am a Stanford, but not in the MBA program. My understanding is that many students do pay full tuition. Graduating with an MBA from the GSB guarantees that you will find a high paying job that makes it well worth it. To put it one way, my one friend asked an MBA student friend
"how does everyone in the GSB afford such nice cars while paying MBA tuition?"
"When you are already paying 200 grand, whats an extra 50 thousand?"
I think its very revealing of the mindset.
Another interesting stat : 40% of incoming MBA students say they want to found a startup. Ultimately only 2% do. The reason for the differential not being for failure to do so, but for being unwilling to turn down lucrative job offers.
Your analysis of the situation is a bit off. The vast majority of MBA students have worked some amount of time since graduating from their undergraduate institutions. Not only that, many were working in highly lucrative industries like investment banking/consulting. It's really not far-fetched that they purchased these cars prior to entry into the program.
Also your note that 2% pursue startup opportunities seems to be incorrect, given that the 2012 employment report showed 13% of students not seeking employment to start a new business.
This doesn't really answer the question about whether everyone is paying full sticker, but debt loads for MBA graduates is a nice data point to check out. (2009/10 data)
The thing that irks me about the cost of college isn't that it costs a lot, it isn't ideal that the cost can be so prohibitive but if someone can really get great value from college it can be worth it. The thing that irks me is that from a very young age we're told that if you want to achieve something in life, if you want to be someone then you NEED to go to college and if you don't you're a failure and you're destined to work in McDonalds until the day that you die. This means that people who won't get any real value from college end up spending hundreds of thousands of dollars (that they don't have and don't understand the repercussions of spending because they're a teenager when they commit to it) and become at a very big disadvantage in life because that's what they were told they had to do.
Well colleges had good marketing. With the near guarantee that anyone could get a loan they were pretty much set to make money. All they needed was a way to make you feel obligated to get that loan and give them the money.
Could you expound on that a little? Are you referring to parents of college students transferring wealth by paying for tuition? Maybe I'm just being dense but I can't quite figure out what you meant.
I really wish we put more focus on discovering strengths from a young age and developing upon those in students. College really is not for everyone.
A friend of mine in high school wasn't the brightest guy when it came to the core classes, but was hands down THE guru in auto shop. The guy could disassemble an engine entirely and put it back together squeaky clean before he could even drive a car himself while I would (and still do) struggle to even change the oil.
He's now doing just fine for himself working as a manager at a local auto repair shop, and will most likely be happy doing that the rest of his life.
What's interesting to me about stories like that is, is he realizing his full potential by doing auto-repair the rest of his life, or could he have done more in a system like Germany's that might have channeled him into an apprenticeship at a BMW or Audi factory?
The US educational progression has a strong bias toward one type of intelligence, and seems to more easily sideline people like your friend.
Great question -- I often wonder if the repeated "failure" in the core classes was also discouraging in being more ambitious. Obviously I'm not going to advocate for less math/science/english for someone like him, especially through at least high school, but I can't imagine it did wonders for his confidence repeatedly being required to attend after school tutoring, having to get his parents to sign failed tests, etc.
When most folks are not interested in education early on and do it for purposes other than learning itself tells something about our society and education system.
If you're not getting value out of college, you're doing something wrong. College is a resource, not a teaching facility, and the amount you put in is directly related to how much you get out of it. There are too many people, in my opinion, who take the "$120k for a piece of paper" expression seriously and miss out on the vast number of opportunities that one gets from 4+ years of uninterrupted study.
This only works if you have an idea of what you want out of college. The same group of people that are told they need college to be successful are often the people that can only take what is given to them, since they probably don't have a strong internal drive to be there. 4+ years of uninterrupted study requires a deep interest in some area, and a personal drive to carry out that study.
If you don't have an idea of what you want out of college it is best to figure it out fast. And even if you don't have an idea you are better off in college meeting a whole bunch of people and attempting to figure it out.
There are actually a variety of reasons why people don't get value out of college, and it's not always because they're doing something wrong.
For example, most young people are told to set their sights on college. Realistically, most young people are not suited for "4+ years of uninterrupted study." This might not seem obvious if you took AP/honors classes your whole life; in that case, the mean is probably much lower than you've been conditioned to expect.
Haven't studies shown that even subsistence farmers do better with education?
As far as I've read, more education is good for anyone who can afford it. (Even at its inflated prices, a college degree remains a good investment for most.)
It seems to me the real problem is that most people who'd do just as well with a smaller university education are paying 5x as much for a big/name school education. Which, for those taking on debt, is hardly optimal. And their willingness to do this is what drives the prestige/price bubble.
So, really, the correctable social prejudice is not breaking "everyone should go to college" [1], it's breaking "small school education is inferior to big/name school education". [2]
[1] Though that could certainly stand a weakening and reformation to "most people should do post-high school education", with a heavy dose of de-stigmatization for trade schools, community college and the like.
[2] That prejudice is undoubtedly true of a minority of places and programs, but rarely; and extremely so in the case of undergrad programs.
Sure. I agree with that general notion. I'm just of the mind that many more people will get an education in a directed experience than in a self-taught manner.
It's rather like the famous anecdote of the would-be musician who asks a famous self-taught master how they should approach becoming a musician. Paraphrasing:
Aspirant: "How do I go about becoming a great musician?"
Master: "Go to school."
Aspirant: "But you never went to school."
Master: "I never had to ask anyone 'how', either".
Which is to say: those who are capable and willing to do self-directed learning will do so regardless. For anyone who seeks/takes advice on how to proceed "go to college" remains the best answer.
Education is not enough. It needs to be converted into "knowledge that can be applied". That is the part that college handles. I would much rather go to a surgeon that has gone to college/univ over someone who has read all about surgery on wikipedia during his travels to Thailand.
The surgeon is actually is an apprentice under the guide of a more senior doctor. Access to the master requires enrollment in medical school and then a residency. It is not book learning per se.
This article is about the cost of an MBA, which is a master's degree (in business administration), at a very prestigious university. So you're kind of hijacking the thread when you bring up the cost of a college education.
There's no doubt that universities represent declining value for money to their students[1][2]. But the reason we tell young people that they should go to college if they want to achieve something in life is because higher education, particularly at the top universities, remains a great investment.
Besides the edge cases and exceptions what you are told from a very young age is accurate. You can look at the income data for people who have univ degrees vs. those who don't.
The education industry today is 100% a business and institutions are run more or less like corporations (this wasn't so true many years ago and is a horrible model for education for general society). It is their incentive to continue perpetuating the correlation between college and career success... and its not some sort of grand lie in many cases - there are many indicators that show its becoming increasingly important to have a college degree.
They do have a coming problem though. With the escalation in price and the well known stories of college grads moving back in with their parents, their next set of customers are starting to question if college is for them. Essentially the education industry has started to eat its young and does so even more every time prices rise above reasonable amounts. The other thing to consider is that the cost for college has risen much faster than the label price. Given that most students need loans, when you factor in interest paid and the long term rise in interest rates - the cost of education has REALLY gone up... much more than is reported.
At some point things will correct - either the government will step in (unlikely) or there will be a fall out when inevitably their customers realize that education is more of a liability than an asset.
Something like 56% of college students don't complete. Also many take more than 4 years, so the first wave of value is finishing in less than 4 years. Universities may reduce costs by dropping non-essential non-major classes.
In the "watch and learn" department here is what the comments below are missing about this story.
The author of the story appearing in CNN is John Byrne who is the owner of poetsandquants.com website (of course it could be a coincidence but I don't think that's the case).
The article on CNN doesn't disclose this fact.
That doesn't make the data inaccurate necessarily but it shows how easy it is to get national media attention for your website at least if you target CNN as the recipient of some good link bating information.
This is the "about" page of the poetsandquants.com website:
The very first paragraph of the article (below the byline) has a link to the author's website. And, the "About this author" section on the sidebar also mentions the fact.
Just another reminder that our top business leaders are taught on a fundamental level to leverage. Whether this is good or bad it certainly separates a lot of the rest of us from those in the driving seat: they are willing to take on massive debt obligations for themselves and for the companies they run, and understand the world of leverage and all it entails/empowers.
MBA may not seem selective (a lot of mediocre people get in) on intelligence, but the "work experience" bar can be quite high and usually requires a leadership position in an established business (not some acq-hired startup) before 26. Stodgy blue-chips don't promote that fast, so no one gets that without their daddies pulling strings, which means they also come from money.
Pretty much everything about that statement in inaccurate.
The vast majority of them have parental funding.
Most MBAs are self-funding; almost every MBA I met at the Berkeley, Stanford, Case, Loyola, USC, and UCLA business schools was. A few were lucky enough to have their employer bankrolling the degree. Perhaps one or two were attending on their parents' dime.
MBA may not seem selective (a lot of mediocre people get in) on intelligence, but the "work experience" bar can be quite high and usually requires a leadership position in an established business (not some acq-hired startup) before 26. Stodgy blue-chips don't promote that fast, so no one gets that without their daddies pulling strings, which means they also come from money.
MBAs can be very selective; it depends on the school, but even the most selective only require 2-3 years of work experience before they will seriously consider an applicant. Experience can be acquired in any industry, including startups, restaurants, and service industries. The key factor is not where an applicant worked, but what the applicant managed to accomplish while working there.
I know a lot of MBA students at NU/Kellogg, and very few bit that mold. They're mostly upper middle class, like pretty much everyone in professional degree programs, but their work experience is stuff like two years at an investment bank, consulting firm, etc. Lot of people from non-profits too. Being VP at IBM or something is decidedly not a requirement...
In my experience the amount of work experience and intelligence are actually switched around. There is usually some filtering for intelligence as a result of the GMAT while their experience can often be quite limited.
This can lead to newly minted MBAs having a good grasp of certain tools of management but fairly limited intuition around when to appropriately apply those tools.
Stanford GSB is actually extremely competitive. Acceptance rate is about 6% (lowest in the world for MBA programs, I believe), and almost the entire applicant pool is highly qualified.
That salary figure is misleading since only base is reported. Moreover, total compensation for the type of careers pursued by Stanford MBAs increases rapidly, especially in finance. VPs (achieved in your late 20s to mid 30s) at Lehman brothers were making 600k on average.
Guys, I have a doubt: Is it commom to companies to pay MBA for their employees?
Here in brazil is a fairly common habit, but MBAs here are weekly or two times a month, on the weekends. Not something you have to commit so much.
So I'll actually answer your question, given that all you got was an English critique and an semi-meaningless one liner: It depends.
An MBA is usually considered individual learning by most employers, so the total cost is picked up by the individual. That said, there are companies out there that will consider picking up some or all the tab, especially for key employees or where there is a direct benefit demonstrated to the company. If you are working and taking an MBA at the same time, schools will offer "Executive MBAs" which are just part time courses with less full time classroom time. Often a week or two on campus, with everything else just online.
More often than not, however, people are taking an MBA to get into one of those key positions in the first place, and as such don't have the clout to receive funding from their company. You'll also find in North America that the value of an MBA is quite debatable overall.
I think MBA from a top school is more of an elitist club so if it's terribly expensive that's just fine. It limits number of holders just like for any other expensive stuff. I don't believe in the value of business education, anyways - i have one (while not MBA) and know it's worthless shit, and i seen MBAs who don't know how to calculate NPV. And i know an MBA whos job is mostly replacing printer cartridges.
That is indeed worrying. It is worrying that our society has no place for Journalism, Literature, History, ...
We are building a society with an extreme focus on personal wealth. Since we are stuck on a single planet with limited resources, that type civilization will not end well.
Our society has plenty of place for Journalism, Literature, History. The question is if you want to study Medieval poetry, who's going to pay your bills? If you manage to have gainful employment while studying Medieval poetry, all power to you. If you come to me and say I have to pay your bills via taxes, while you enjoy reading poetry, then we have a problem here.
The problem is not the focus on personal wealth. The problem is that some people think that if they like doing something, its the reason enough to force other people to pay for it, just because that people have personal wealth and thus by definition are soulless fatcats whose property has to be "redistributed" because it's not fair that their pursuits are profitable and poetry reading is not. This is the real problem we are having right now.
There is a place for those things in our society, and indeed a much larger place in today's society than there has ever been in the past. Even 100 years ago, the study of any of those things was mostly limited to a very tiny elite who could afford entry to the very tiny number of universities. Now, we have numerous state universities that have created far, far more paying jobs available today for someone with a degree in liberal arts or humanities than has ever been the case in the past.
The problem is rather that even with this historically high number of jobs available in history, literature, and so on, the universities are now producing people with degrees in those fields at a much higher rate than there are jobs available. Each faculty member added supports the creation of that many more new degrees in the field every year. Our society currently has a place for n historians (and that's a bigger n than ever before), but there are now also n^2 (or whatever) people with history degrees competing for those slots.
There is a place for professionals in these fields, certainly; but there is not a place for every single person who thinks it'd be fun to be a professional historian. The number of people interested in doing that is just far larger than the number of people our society needs to do that. Not everyone can be an astronaut or a rock star, and being a professional in the liberal arts is not different.
Any data to back it up? I.e. any comparison, ceteris paribus, of Stanford MBA graduate income vs. other MBA graduate income and non-MBA graduate income that proves, say, if we define "no time" as 5 years, that 5-year income of Stanford MBA graduate is at least 185K higher (after taxes, of course, so before taxes, given federal & California taxes, it'd be around 400K or 80K per year) than the income of other people mentioned above?
I imagine you should already have a substantial income to qualify even for 185K loan (in most places, it's a mortgage-size loan, with over 2K per month payments), let alone paying 185K in cash, so the improvement should be from the level of people that are already capable of spending 185K - i.e. either having current income substantially higher than, say, level of experienced software developer, or somehow having amassed 185K in cash that they can invest in their education.
So you're saying you can get 185K unsecured loan with no proof of income to back it up? I heard in some country they recently got into big problems with giving large loans to people that couldn't pay for it under the premise that the property they buy with these loans is going to raise in value so much that it will cover the loans anyway. But this time I'm sure it would work out just fine.
It works in America because student loans are non-dischargeable. It doesn't matter if you are penniless and have filed for legal bankruptcy, the lender can still keep coming after you and even garnish your wages for the rest of your life. It is extremely difficult to escape an American student loan obligation, basically you will pay it off, with interest, unless you die first.
This system is what enables American universities to put such high price tags on education, and also what allows the students to actually get approved for such large loans. Almost all of the risk is assumed by the borrower. Even if the graduate cannot find sufficiently gainful employment to repay the loan, the lender still eventually gets a return on their investment. If they were forced to take a loss, that would cause lenders to make their approval processes more stringent, and would limit most students' ability to attend these universities. So it becomes a political issue because no politician wants to be perceived as being responsible for limiting students' access to higher education. The fact is that the risks and costs must be absorbed by someone--under the current system it is the students' future selves. (My personal opinion is that this is a form of modern indentured servitude and should be outlawed.)
Dischargeability does not matter if the person has no income to pay it. You can't take 2K per month form a person that earns 2.5K per month before taxes. In fact, unless you have six-figure salary, 2K per month will bankrupt you very quickly, since you also need to pay for shelter, food, utilities, etc. and with income that allows to pay 2K per month you will get no welfare. So repayment of the loan is linked to the person having substantial income.
Actually, as far as I know most of education loans are now government loans, so there is zero incentive of changing the requirements, and zero incentive to reduce the costs. If these loans are losing money, we can just tax the rich and have more money, can't we?
The non-dischargeability of student loans matters because it significantly reduces the lender's risk of taking a loss. Even if the student doesn't have the income to service the loan debt within 5-10 years after graduating, the lender will still recoup their investment, with interest, if the person ever makes enough income to pay it down in their entire lifetime. And the lender is near the front of the line for collections (just behind things like the IRS and child support). So the only case in which the lender takes a loss on their investment is if the borrower dies before they can pay it off. In the aggregate this is a very small risk.
Student loans are not all government loans, maybe 70% are Federal Student Aid loans. Both FSA loans and subsidized private loans are subsidized by the government, which only means that the government pays the portion of the interest that would be due while the student is still in school. But it does not matter whether the lender is the government or a bank--the loans still carry an interest rate and are still non-dischargeable. The government cannot "just tax the rich" to pay off students' loan balances, the government does not work that way.
The gov't ends up buying the deliquent loan in full and then they chase you down. Extreme hardship is the only way to get it dismissed and that is very unlikely.
They do have a 20 year minimum payment plan and then will forgive the remainder. Not sure if that becomes taxable after the fact.
They also have principal forgiveness plans for government or teaching service.
Forgiven debt is taxable as ordinary income and the lender will send you a form 1099 for it, but in the case of principal forgiveness plans where "you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation," that is not taxable as income.
yep...Its an unsecured loan. Student loan is the next crisis waiting to happen. Also, in case of Booth School MBAs, I hear (from friends), that students are charged something like 4% extra...since statistics show 4% of people typically default on MBA loans.
... that 5-year income of Stanford MBA graduate is at least 185K higher (after taxes, of course, so before taxes, given federal & California taxes, it'd be around 400K or 80K per year) than the income of other people ...
The Stanford MBA's income need not be higher by 185K, for the comparison to be fair. It needs to be higher only by the difference between the cost of Stanford MBA and the other MBA.
How can Stanford even begin to justify this cost? Apart from boasting that graduates earn an average of of X dollars per year, how is the education itself worth the price?
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[ 4.6 ms ] story [ 171 ms ] threadIt might not appeal to most HN readers but there's still a rational argument for the degree, even at this price.
At a $185,000 price tag, you're buying yourself into a job in big three managerial consulting (McKinsey, Bain, Boston Consulting Group), or finance, which generally comes with a very nice starting salary, signing bonus, and a built-in career trajectory.
Most consultants are either deep in consulting in 10 years and making very nice money (mid to high 6 figures, low 7) as a partner or manager or have moved on to vice president or higher level positions at client organizations you've consulted for.
Totally different worlds.
(Maybe VCs hate them since they try to create regular companies and that increases the value before VCs invest in them.)
Though I suspect $25K isn't even small a blip on the income statements of these people.
Also your note that 2% pursue startup opportunities seems to be incorrect, given that the 2012 employment report showed 13% of students not seeking employment to start a new business.
(About the 2%, the sample is very different so that should explain the difference with the report)
http://poetsandquants.com/2011/04/25/25-b-schools-that-lead-...
That's great if tax laws allowed eduction deduction. A bit like stock losses can be offset annually.
A friend of mine in high school wasn't the brightest guy when it came to the core classes, but was hands down THE guru in auto shop. The guy could disassemble an engine entirely and put it back together squeaky clean before he could even drive a car himself while I would (and still do) struggle to even change the oil.
He's now doing just fine for himself working as a manager at a local auto repair shop, and will most likely be happy doing that the rest of his life.
The US educational progression has a strong bias toward one type of intelligence, and seems to more easily sideline people like your friend.
For example, most young people are told to set their sights on college. Realistically, most young people are not suited for "4+ years of uninterrupted study." This might not seem obvious if you took AP/honors classes your whole life; in that case, the mean is probably much lower than you've been conditioned to expect.
As far as I've read, more education is good for anyone who can afford it. (Even at its inflated prices, a college degree remains a good investment for most.)
It seems to me the real problem is that most people who'd do just as well with a smaller university education are paying 5x as much for a big/name school education. Which, for those taking on debt, is hardly optimal. And their willingness to do this is what drives the prestige/price bubble.
So, really, the correctable social prejudice is not breaking "everyone should go to college" [1], it's breaking "small school education is inferior to big/name school education". [2]
[1] Though that could certainly stand a weakening and reformation to "most people should do post-high school education", with a heavy dose of de-stigmatization for trade schools, community college and the like.
[2] That prejudice is undoubtedly true of a minority of places and programs, but rarely; and extremely so in the case of undergrad programs.
Travel can be education. So can reading. In fact we should always be learning something new. You don't need a university for that.
It's rather like the famous anecdote of the would-be musician who asks a famous self-taught master how they should approach becoming a musician. Paraphrasing: Aspirant: "How do I go about becoming a great musician?" Master: "Go to school." Aspirant: "But you never went to school." Master: "I never had to ask anyone 'how', either".
Which is to say: those who are capable and willing to do self-directed learning will do so regardless. For anyone who seeks/takes advice on how to proceed "go to college" remains the best answer.
There's no doubt that universities represent declining value for money to their students[1][2]. But the reason we tell young people that they should go to college if they want to achieve something in life is because higher education, particularly at the top universities, remains a great investment.
[1] - http://www.economist.com/news/united-states/21567373-america...
[2] - http://news.ycombinator.com/item?id=4856452
They do have a coming problem though. With the escalation in price and the well known stories of college grads moving back in with their parents, their next set of customers are starting to question if college is for them. Essentially the education industry has started to eat its young and does so even more every time prices rise above reasonable amounts. The other thing to consider is that the cost for college has risen much faster than the label price. Given that most students need loans, when you factor in interest paid and the long term rise in interest rates - the cost of education has REALLY gone up... much more than is reported.
At some point things will correct - either the government will step in (unlikely) or there will be a fall out when inevitably their customers realize that education is more of a liability than an asset.
The author of the story appearing in CNN is John Byrne who is the owner of poetsandquants.com website (of course it could be a coincidence but I don't think that's the case).
The article on CNN doesn't disclose this fact.
That doesn't make the data inaccurate necessarily but it shows how easy it is to get national media attention for your website at least if you target CNN as the recipient of some good link bating information.
This is the "about" page of the poetsandquants.com website:
http://poetsandquants.com/about/
Not much there, eh?
The very first paragraph of the article (below the byline) has a link to the author's website. And, the "About this author" section on the sidebar also mentions the fact.
http://observer.com/2010/08/john-byrnes-poets-quants-starts-...
Interesting though that this history (if true I haven't verified it) would be omitted from his "about" page.
MBA may not seem selective (a lot of mediocre people get in) on intelligence, but the "work experience" bar can be quite high and usually requires a leadership position in an established business (not some acq-hired startup) before 26. Stodgy blue-chips don't promote that fast, so no one gets that without their daddies pulling strings, which means they also come from money.
The vast majority of them have parental funding.
Most MBAs are self-funding; almost every MBA I met at the Berkeley, Stanford, Case, Loyola, USC, and UCLA business schools was. A few were lucky enough to have their employer bankrolling the degree. Perhaps one or two were attending on their parents' dime.
MBA may not seem selective (a lot of mediocre people get in) on intelligence, but the "work experience" bar can be quite high and usually requires a leadership position in an established business (not some acq-hired startup) before 26. Stodgy blue-chips don't promote that fast, so no one gets that without their daddies pulling strings, which means they also come from money.
MBAs can be very selective; it depends on the school, but even the most selective only require 2-3 years of work experience before they will seriously consider an applicant. Experience can be acquired in any industry, including startups, restaurants, and service industries. The key factor is not where an applicant worked, but what the applicant managed to accomplish while working there.
This can lead to newly minted MBAs having a good grasp of certain tools of management but fairly limited intuition around when to appropriately apply those tools.
Guys, I have a question: Is it common for companies to pay for MBAs for their employees? Here in Brazil, it is a fairly common...
An MBA is usually considered individual learning by most employers, so the total cost is picked up by the individual. That said, there are companies out there that will consider picking up some or all the tab, especially for key employees or where there is a direct benefit demonstrated to the company. If you are working and taking an MBA at the same time, schools will offer "Executive MBAs" which are just part time courses with less full time classroom time. Often a week or two on campus, with everything else just online.
More often than not, however, people are taking an MBA to get into one of those key positions in the first place, and as such don't have the clout to receive funding from their company. You'll also find in North America that the value of an MBA is quite debatable overall.
The more worrying thing, IMO, are the people paying a bunch of money for Journalism or English Literature degrees.
We are building a society with an extreme focus on personal wealth. Since we are stuck on a single planet with limited resources, that type civilization will not end well.
The problem is not the focus on personal wealth. The problem is that some people think that if they like doing something, its the reason enough to force other people to pay for it, just because that people have personal wealth and thus by definition are soulless fatcats whose property has to be "redistributed" because it's not fair that their pursuits are profitable and poetry reading is not. This is the real problem we are having right now.
The problem is rather that even with this historically high number of jobs available in history, literature, and so on, the universities are now producing people with degrees in those fields at a much higher rate than there are jobs available. Each faculty member added supports the creation of that many more new degrees in the field every year. Our society currently has a place for n historians (and that's a bigger n than ever before), but there are now also n^2 (or whatever) people with history degrees competing for those slots.
There is a place for professionals in these fields, certainly; but there is not a place for every single person who thinks it'd be fun to be a professional historian. The number of people interested in doing that is just far larger than the number of people our society needs to do that. Not everyone can be an astronaut or a rock star, and being a professional in the liberal arts is not different.
I imagine you should already have a substantial income to qualify even for 185K loan (in most places, it's a mortgage-size loan, with over 2K per month payments), let alone paying 185K in cash, so the improvement should be from the level of people that are already capable of spending 185K - i.e. either having current income substantially higher than, say, level of experienced software developer, or somehow having amassed 185K in cash that they can invest in their education.
This system is what enables American universities to put such high price tags on education, and also what allows the students to actually get approved for such large loans. Almost all of the risk is assumed by the borrower. Even if the graduate cannot find sufficiently gainful employment to repay the loan, the lender still eventually gets a return on their investment. If they were forced to take a loss, that would cause lenders to make their approval processes more stringent, and would limit most students' ability to attend these universities. So it becomes a political issue because no politician wants to be perceived as being responsible for limiting students' access to higher education. The fact is that the risks and costs must be absorbed by someone--under the current system it is the students' future selves. (My personal opinion is that this is a form of modern indentured servitude and should be outlawed.)
Actually, as far as I know most of education loans are now government loans, so there is zero incentive of changing the requirements, and zero incentive to reduce the costs. If these loans are losing money, we can just tax the rich and have more money, can't we?
Student loans are not all government loans, maybe 70% are Federal Student Aid loans. Both FSA loans and subsidized private loans are subsidized by the government, which only means that the government pays the portion of the interest that would be due while the student is still in school. But it does not matter whether the lender is the government or a bank--the loans still carry an interest rate and are still non-dischargeable. The government cannot "just tax the rich" to pay off students' loan balances, the government does not work that way.
They do have a 20 year minimum payment plan and then will forgive the remainder. Not sure if that becomes taxable after the fact.
They also have principal forgiveness plans for government or teaching service.
Source: http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt...
The Stanford MBA's income need not be higher by 185K, for the comparison to be fair. It needs to be higher only by the difference between the cost of Stanford MBA and the other MBA.