The higher ed bubble has claimed a new victim: MBAs. According to the WSJ, business graduates are now seeing the same wage depression that’s already decimated the legal profession and many graduate schools:
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. [ . . . ]
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.
Second and third tier business schools have charged enormous tuition and fees in years past, and MBA programs have mushroomed all around the country even as online education and changing market needs are upending the entire field. Students are beginning to understand that paper certificates, even very pricey ones, do not automatically translate into big paychecks.
Higher ed is going to undergo a lot of course corrections as applications drop, but one thing we should act on right now is reforming the laws and regulations related to student loans. These loans currently can’t be discharged in bankruptcy, leaving many students stuck with long term crippling burdens of debt. While higher ed goes through its lengthy process of redevelopment, we should do what we can to ensure that students don’t pay the full price for the failures of a system that they didn’t build.