This was a couple years ago, so I don't remember the methodology, and think it was a back-of-the-envelope type of math. (Yes of course there are ways to solve "

This was a couple years ago, so I don't remember the methodology, and think it was a back-of-the-envelope type of math. (Yes of course there are ways to solve "hard problems". This isn't a quantitative proof: this is an anecdote.) At the base, it was something like: - I make $150k a year and I will not make that for 2 years, so $300k. - I will make $15k as a MBA intern, so $275k. - I will have to pay $185k in school related costs[1], so $460k. I think there was a little more to it (e.g., PV/FV), but that's the basics. You're correct in noting that #3 has cost of living incorporated into it and you'd have to pay that anyway, though there's a difference between the cost of living at Stanford, e.g., and cheaper markets. Yes, you could go build a rigorous financial model. That is left as an exercise for the reader. [1] http://fortune.com/2012/12/07/stanford-mba-price-tag-hits-185k-highest-in-the-world/ http://fortune.com/2012/12/07/stanford-mba-price-tag-hits-18...