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Stanford MBA price tag hits $185K: Highest in the world
- jasonmw 14y agoYou could do a lot of things with $185,000. You could live off of the $185,000 for at least a few years testing minimal viable products.
- MattRogish 14y agoThe 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.
- jasonmw 14y agoI 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.
- atdrummond 14y agoI 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.
- ssharp 14y agoI'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. Totally different worlds.
- Alaskan005 14y agoAnd 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.)
- randomdata 14y agoAssuming 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.
- lunchladydoris 14y agoIs this the sucker price and most people somehow get around paying all of this or is this what people actually pay?
- AustinGibbons 14y agoI 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.
- stupandaus 14y agoYour 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.
- zzleeper 14y agoHe is right though. Many MBAs have to relocate, and they buy the cars just for the two years of their program. (About the 2%, the sample is very different so that should explain the difference with the report)
- omarchowdhury 14y agoSource?
- danjmckee 14y agoHow 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?
- sjg007 14y agosupply vs demand?
- tomrod 14y agoI believe just pointing out costs is a false measure. What is the expected wage/cost ratio, and how does THIS measure compare?
- goatcurious 14y agoCost break up for 2 years: Tuition 115K; Rent & personal: 50K; Books & stuff 8K; Study trip 4k; Health 8k.
- usarin 14y agoThat's not factoring in the opportunity cost. Which to me would out weight the 185K sticker price.
- d3ad1ysp0rk 14y agoRecord setting MBA programs are not shocking to me as income inequality continues to grow.
- salimmadjd 14y agoThe median total compensation for a freshly minted MBA from Stanford this year was $185,000 That's great if tax laws allowed eduction deduction. A bit like stock losses can be offset annually.
- citricsquid 14y agoThe 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.
- Shivetya 14y agoWell 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.
- michaelochurch 14y agoHigher ed. == socially acceptable generational wealth transfer that doesn't involve someone knocking off.
- spacemanaki 14y agoCould 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.
- sharkweek 14y agoI 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.
- larrys 14y agoIn 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: http://poetsandquants.com/about/ http://poetsandquants.com/about/ Not much there, eh?
- prakashk 14y agoI am not sure what you're getting at. 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.
- larrys 14y agoTo answer my question about why John Byrne is important enough to get a story on CNN.com here is the reason: http://observer.com/2010/08/john-byrnes-poets-quants-starts-business-school-smackdowns-tiny-media-feuds/ 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.
- redwood 14y agoJust 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.
- michaelochurch 14y agoThe vast majority of them have parental funding. 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.
- rprasad 14y agoPretty 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.
- rayiner 14y agoI 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...
- sakopov 14y agoHow long does it take for a Stanford MBA grad to pay this off? I'm going to guess not very long.
- qdpb 14y agoAt a median salary of 125K in a high-cost location like California or New York, quite a while.
- foobarqux 14y agoThat 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.
- dudurocha 14y agoGuys, 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.
- qdpb 14y agoYou are describing EMBA (executive MBA).
- debacle 14y agoI was able to parse your question, but I would have written it as: 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...
- dudurocha 14y agoThank, debacle. I have a fair good reading comprehension, but my written skills are not so good.
- run4yourlives 14y agoSo 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.
- anovikov 14y agoI 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.
- sjg007 14y agoHouse of Lies?
- jlarocco 14y agoWho cares? Most Standford MBA graduates make that back in no time. The more worrying thing, IMO, are the people paying a bunch of money for Journalism or English Literature degrees.
- gutnor 14y agoThat 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.
- smsm42 14y agoOur 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.
- pjlegato 14y agoThere 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.