Wall Street Journal: For Newly Minted M.B.A.s, a Smaller Paycheck Awaits:
Soaring tuition costs, a weak labor market and a glut of recent
graduates … are upending the notion that
professional degrees like M.B.A.s are a sure ticket to financial
success.The M.B.A.’s lot is partly reflected in
starting pay. While available figures vary by schools and employers,
recruiters’ expected median salary for newly hired M.B.A.s was
essentially flat between 2008 and 2011, not adjusting for inflation,
according to a survey by the Graduate Management Admission Council.For graduates with minimal experience—three years or less—median pay
was $53,900 in 2012, down 4.6% from 2007-08, according to an analysis
conducted for The Wall Street Journal by PayScale.com. Pay fell at 62%
of the 186 schools examined….Another burdensome issue: a high debt load. Nearly 60% of graduating
M.B.A.s said they expected to repay some loans after graduation,
according to a 2012 GMAC survey. Among households headed by people with
student debt who attended graduate school and are under 35, average
student loan debt climbed to $81,758 in 2010 according a Wall Street
Journal analysis of Federal Reserve data. That figure is up from $55,594
in 2007. …A weak economic climate is only partly to blame for the M.B.A.’s
plight. The changing nature of B-school programs, evolving corporate
needs—as well as the perceived value of the degree—have all helped
dilute the M.B.A.’s allure. Formerly, the traditional M.B.A. was
mainly the product of a full-time, two-year program. But beginning in
the early 1990s, many schools created part-time and executive M.B.A.
programs, with lower-ranked schools often following in the footsteps of
academic leaders. Online degrees also gained in popularity. …U.S. schools granted a record 126,214 masters degrees in business and
administration in the 2010-2011 academic year, a 74% jump from
2000-2001, according to the Department of Education. The M.B.A. march is
part of an overall boom in advanced degrees that took on added steam as
some recent college graduates and others sought refuge from the
recession by pursuing advanced degrees. Tuition and fees for full-time
M.B.A. programs has risen 24% over the past three years, according to
the main body that accredits U.S. business schools.
