Article1 - TherisingcostofMBAs Aug26th2009...

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The rising cost of MBAs Overpriced or priceless? Aug 26th 2009 From MBAs are becoming more costly. Are they worth the money? Times really must be tough. A recent study by the National Association of Independent Colleges and Universities has found that tuition fees at private American institutes of higher education increased by only 4.3% in 2009, the lowest annual rise for nearly 40 years. Even business schools, used to raising their fees with near impunity, have not been exempt from the market conditions. The average annual tuition fee for a full-time MBA programme at the top 10 American schools in the Economist Intelligence Unit's ranking is $46,839, up 4.9% on 2008. This compares with a 5.8% rise a year earlier. If business schools are responding to the financial pressures faced by prospective students in these straitened times, the response of many may be a resounding “it’s about time.” Business education—and in particular its flagship qualification, the MBA—has been getting steadily more expensive with each passing year. Ten years ago, the cost of two years' tuition at Harvard Business School would have set you back $54,000—approximately $69,000 when adjusted for a decade’s worth of inflation. Today it is over $92,000, and that’s before the health- service fees and miscellaneous programme-support fees that add considerably to a student’s budget. Price rises may have been more modest this year, but there is little chance of below-inflation increases any time soon. This is because, in America in particular, whilst students may have financial worries, so do the schools themselves. Unlike their counterparts in Europe and on the Pacific Rim, American schools tend to be substantively funded by endowments and donations by alumni. At Stanford Graduate School of Business in California, for example, as much as half of income is generated in this way. And as the recession drags on, the flow of cash has dried up (which may explain why its two-year, full-time MBA is now one of the world's most expensive at
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This note was uploaded on 10/19/2011 for the course ECON 101/102 taught by Professor Gateman&neary during the Spring '09 term at UBC.

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Article1 - TherisingcostofMBAs Aug26th2009...

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