Trying to understand how I cost Wharton $400,000

In a recent WSJ article, the Dean of Wharton, Thomas Robertson, had this interesting exchange with the author of the article about doctoral candidates in his school:

WSJ: Few business schools still have Ph.D. programs. How can talent continue to flow through the pipeline into academia?

Mr. Robertson: When we admit students, in the letter of admission, the expectation is that they will go into academia. The notion has even been floated that if they don’t go into academia, they should pay back the cost of the Ph.D. program. It costs about $400,000 to educate one Ph.D. student, because they don’t pay tuition and they get stipends [emphasis mine].

If [departments] are not placing at top schools, or if their students don’t go into academia, we will cut back the number of Ph.D. students that they’re allowed to admit.

Glancing over the notion of repaying Wharton for not going into academia (which is rather obnoxious), Robertson’s response about costs for educating a Ph.D student is curious; did Wharton really invest $400,000 into my doctoral education?  Am I really that important?  I decided to do a little investigating by finding as much info about the price of tuition, fees, stipends, etc. that I could to account for the $400,000 cost.

To give Dean Robertson the benefit of the doubt, we’ll start by considering tuition/fees for the 2011-2012 academic year as the baseline.  Also, let’s assume that all costs increase by roughly 4% every year (a more accurate number could be attained by doing a detailed analysis of this and national inflation levels).  Given that I am only expertly qualified to talk about the Statistics department, our final assumption will be that this student will receive their Ph.D in five years from Wharton in Statistics and come into the program with no previous credits.

With that out of the way, let’s begin with a summary of the known costs.

1. Tuition = $90,872.47

As per the Doctoral Programs’ website, full-time tuition (i.e. taking classes) for the current academic year of 2011-2012 is $26,660.00.  Take that over 3 years of classes with interest, which is possible for students without previous graduate studies, the total is $83,221.86.  For the other 2 years spent working on their dissertation, students are placed on dissertation status and need to only pay “reduced tuition,” which according to the 2011-2012 rate, is $3,334.00.  Skipping ahead to 3 years from now and accruing those costs during this student’s final 2 years, they need to tack on an additional $7650.61.  This brings the total cost of tuition to $90,872.47, a bit under the $100k mark.

2. Fees/Health Insurance = $28,365.63

To delve further into fees and health insurance, here’s a helpful document that breaks all of this down from previous years; some searching on program-specific sites will get you to updated numbers for this current academic year.  Those fees breakdown into a “general fee” that is as high as $2,318.00, if the student is doing at least 3 course units, and a technology fee of $668.00.  If a student goes into dissertation mode, then their general fee drops to $582.00, though their technology fee remains the same.  As for health insurance, an annual plan through Penn, which for all intents and purposes is an excellent deal, is $3,012.00 for a single student.

Add that all up over our student’s 5 years in Wharton, the fees and health insurance end up costing $28365.63.

3. Stipend = $159,402.90

Straight out of my W-2 from 2009 (2010 was different because I taught a class that summer, which did pay me slightly more), I earned $27,209.78.  This is one place for contention by Dean Robertson; I only know from experience what I (and my statistical cohorts) was paid in terms of a stipend and have no source for what other departments inside of Wharton pay.  It could be that there are significant increases over this number, but because I do not know for certain, I will stick to my own.

Sum my stat stipend (after correcting for the 2 year difference to begin with, though from experience, I know that the 4% increase was much more like 2%-3%) over the 5 years, our stat Ph.D student would have gotten paid a total of $159,402.90.

Thus, the grand total of all known costs by our student to Wharton over their 5 year tenure is $278,641.00, or a little less than $56k a year.  And that leaves …

The Remaining “Unknown” Costs = $121,359.00

What is the origin(s) of these unknown costs?  In my mind, there are only two possible costs I missed: the mentoring/advising by professors and the right to work on projects for those same professors.  The latter seems rather absurd given the type of labor that said students would be doing, so I would have to lean to the former as being root cost.  So, as a doctoral candidate in statistics, over your 5 years, Wharton pays your professors nearly $25,000 to assist you through your Ph.D.

My suggestion to current students: milk them for that money as much as you can.

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I am Director of Data Science at Two Six Capital, Co-Founder of Krossover, Ph.D in Stats from Wharton and a proud Savannah-ian.

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