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The Education Bubble: Is A Harvard MBA Worth $500,000? / By: Peter Diekmeyer /  

College students are back at their desks this month facing bleak prospects. With tightening job markets leaving kids with no place else to go, universities continue to jack up fees.

The upshot is growing signs that America is in the midst of an “education bubble,” just as big as those in stock, bond, and real estate markets.

Case in point: four years at Harvard University now costs nearly $250,000 [1]. If you want an MBA, add another $200,000 [2].

That doesn’t include the expenses related to running around with colleagues from millionaire homes, which brings the total costs of the two degrees to well over $500,000. A family with two kids needs a cool $1 million to put them through the Harvard undergrad and MBA programs.

That’s a lot of money for a program whose most famous graduate is former President George W. Bush, a man who oversaw the largest financial bubble and worst foreign policy disaster in US history.

“Big academia” jacking up costs

Harvard isn’t alone in squeezing students. According to World Bank data, US spending on education rose from 4.8% to 5.2% of GDP between 1999 and 2011.

Mark Perry, a researcher at the American Enterprise Institute, calculates that college tuition and textbook prices have increased by 200% since 1996, compared to just 55% for the all-items consumer price index [1].


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