Carnegie Mellon

Biz school grads: Overeducated and underfunded?

November 23, 2010: 11:53 AM ET

An estimated 20% of business school grads are not making payments on their student loans, according to government data. And biz school grads are the best among the lot. Are we fast becoming a nation of over-educated debtors?

By Anne VanderMey, reporter

For the average American, higher education in recent years has become increasingly unaffordable. Now, with the economy in the tank, student loan default rates on the rise and the cost of education still increasing, new government data show that the squeeze may have reached one of the last holdouts for well-heeled students -- business schools.

Recent government data on student loan repayment show that 20% of students from elite business schools are struggling to pay down their student debt. And that average is miles better than the typical business school's, raising questions about what that means for the rest of us.

Unsurprisingly, the government numbers, released by the Department of Education this summer, found that graduates of the oft demonized for-profit and career schools were saddled with debt and not making payments.

But the for-profit schools are not alone.

The report, which is preliminary, also features thousands of other schools with less-than-perfect track records. Like Harvard Business School.

According to the data, 88% of Harvard Business School students over the last four years have paid down at least one dollar on the principal of their federal student loans. The other 12% have taken advantage of debt repayment options like forbearance, income-based repayment or deferment. Some of the students among that 12% probably never graduated. And some likely defaulted. More

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