Have MBA Schools become debtors' prisons?

Fortune ^ | 08/19/2011 | Mica Bevington

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MBA grads are shouldering record levels of debt as tuition rates head skyward, making the degree a risky investment that's not often approached with caution or restraint.

In 2008, Brian Jenkins moved to Malibu, Calif., to start his MBA at Pepperdine University's Graziadio School of Business and Management. He had big ambitions for B-school, expecting the degree to help him land a six-figure-salary job in human resources at a top company.

Pepperdine seemed poised to deliver. When he was a mere applicant, the admissions director gave him a personal tour of the business school, which commands a stunning perch overlooking the Pacific. His student experience was "amazing," he says, handing top marks to his professors and classmates. The weather – "perfect every day" – was an added perk.

To pay for it all, Jenkins took out $120,000 in loans. But his six-figure-salary job never materialized. "The career services staff basically said, 'We'll help you edit your resume, good luck out there,'" he recalls. "A lot of [my classmates] found jobs paying $55,000 to $65,000 per year, and they were very excited that they had a job."

In fact, Jenkins' class earned a mean base salary of $69,167, according to Pepperdine's official stats. They also owed an average $66,242. When the economy was doing well, and there was upward mobility, MBAs made sense, Jenkins says. "People were able to manage their debt load."

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"If the schools were the ones that would lose out if the graduate could not repay the loan they would show a lot more care in who gets a loan."

And they would tailor the curriculum towards the needs of the market, rather than pushing the personal wet dreams of leftist PhDs who have never held a productive job...