Value of an MBA

Calculate the Return on Investment for an MBA

A political campaigner in Washington, D.C., Kate Doehring, 31, decided to pack her bags and move to the Midwest to earn an MBA in a place with a cheaper cost of living. “I was looking at Georgetown and George Washington here,” says Doehring, who is about to finish her first year of business school at the University of Wisconsin—Madison. “To stay in D.C., just sheer cost would have been at least double or triple than Madison.” Like many prospective MBA students, Doehring looked at her MBA as an investment and weighed the cost of living, lost wages and potential debt along with a projected post-degree salary of $100,000. Average salary after graduation compared with debt, referred to as salary-to-debt ratio, is one tool for calculating the return on investment for prospective MBA students. “I used just over $100,000 annually, plus or minus $10,000,” says Doehring, who is on target to finish the program with less than $15,000 in debt. “I used $100,000 as a benchmark because those numbers were communicated when I did my campus visit.” According to data submitted to U.S. News by ranked business schools, UW—Madison had the highest annual salary-to-debt ratio for full-time MBA graduates who found jobs paying an average of more than $100,000 in salary and bonus within three months of earning their degree. Students at Wisconsin School of Business can expect a 7.4-to-1 salary and bonus-to-debt ratio. That translates into an average salary and bonus of $114,815 and $15,481, on average, in debt. Of the other ranked business schools with grads earning more than $100,000 in salary and bonuses, these schools had the highest salary and bonus-to-debt ratio for the Class of 2015: the Marriott School of Management at Brigham Young University at...

14 MBA Programs That Lead to Jobs

Landing that first job is a major concern for MBA students, and some programs are more likely to lead to success than others. Among the 129 business schools that submitted job placement data to U.S. News in an annual survey, two of them – the University of South Florida and Coastal Carolina University in South Carolina – saw 100 percent of MBA graduates who sought jobs employed three months after completing their degrees in 2015. Both of these schools, however, were ranked by U.S. News in the bottom one-fourth of the 2017 Best Business Schools rankings. In comparison, Washington University in St. Louis’ Olin Business School, the highest-ranked school among the 14 MBA programs with the highest employment rates, had a job placement rate of 97.1 percent. None of the 14 schools with the highest job placement rates ranked above No. 21 in the graduate business school rankings. Overall, top-ranked schools had higher enrollments and, therefore, many more graduates looking for jobs after graduation. For instance, Harvard University, ranked No. 1, had 672 full-time grads seeking employment and a job placement rate of 91.1 percent by three months after graduation. Of all the schools that submitted these data, Florida International University came out on the bottom of the list with a job placement rate of 27.3 percent – significantly lower than both the overall average of 83.9 percent and the average for the top 14 of 97.1 percent. Below is a list of the 14 full-time MBA programs where the highest percentages of job-seeking graduates were employed three months after graduating in 2015. Unranked schools, which did not meet certain criteria required by U.S. News to be numerically ranked, were not considered for this report. School (name) (state) |...

4 Stats to Measure Before Signing Up for an MBA...

As a young professional working at the International Finance Corporation, an arm of the World Bank, Bruno de Faria had a solid career but worried his business acumen was weak. “I was a political science major in college. I had a little bit of an international relations background, but my work was becoming more and more related to business – finance, accounting, marketing,” the 36-year-old says.​ “I wanted to develop, personally, those skills.” He decided an MBA would give him the knowledge he lacked, but a business school degree often comes at a cost. Many schools charge students $50,000 or more in tuition and fees per year, and full-time MBA programs usually require a two-year commitment. Business school experts recommend applicants weigh their return on investment before enrolling and how long it will take to recoup the money lost​. The investment includes the time in school, the salary a full-time student gives up while in school​ and the total cost of attendance.​ For de Faria, measuring his income before and after graduation was important. “I looked at my salary going away, our incremental expenses and then what would be the expected salary that I’d get after graduation. So, that would be the return,” says de Faria, whose wife worked while he was an MBA candidate at the University of Chicago’s Booth School of Business. “Then I looked at in how many years, more or less, what would be my payback period?” Graduates from two-year, full-time MBA programs usually recoup their investment in three and a half years, according to a February report from the Graduate Management Admission Council. Their median cumulative base salary three years after graduation is $348,000. Prospective business school students should consider four factors in determining...

Is Business School Worth the Money?

Over time, MBAs earn $1 million more than non-MBAs, says a new study. If you’re on the fence about whether to spend the time and money to pursue a graduate business degree, a new report from the Graduate Management Admission Council could help you decide—including what kind of program might give you the biggest returns. Based on a survey of 14,279 alumni of 275 MBA programs worldwide, the study says these MBAs reported base salaries that totaled $1 million more over the two decades following graduation than if they had not gone to B-school. GMAC’s calculations show that, even taking into account the opportunity cost of two years of lost pay, people who graduate from two-year, full-time MBA programs recoup their investment, on average, in three-and-a-half years. Can’t take two years away from your job (and spend an average of $105,000 in tuition, in addition to lost pay)? That’s not necessarily a problem since, the report says,“graduates with lower investment costs tend to recoup their expenses more quickly and show a larger ROI.” For instance, MBAs who got their degree part-time, at an average tuition cost of $25,000, took just two-and-a-half years to earn back their investment, as did executive MBA grads who paid roughly the same tuition. After five years, the two groups reported total ROIs (including pay increases minus the cost of their degrees) of 221% and 491%, respectively. By contrast, because their MBAs cost so much more, the full-time two-year students’ five-year ROI was 132%—still not too shabby—and climbed to 445% only after an average of 10 years. In all, 89% of the alums said their MBAs have proved “professionally rewarding,” and 9 out of 10 said they’d go to B-school if they had it to...

The best business school for your money may surprise you...

In December Business Insider released its sixth annual list of the 50 best business schools in the world — the schools whose MBA programs have the best reputations, highest starting salaries, lowest tuitions, and best job-placement rates. Brigham Young University’s Marriott School of Management came in at No. 44 on our overall list. It’s the least expensive US program and least expensive two-year program, and it took first place on our list of the best business schools for your money, making it one of the most underrated MBA programs out there. “When you consider the low cost of the degree, scholarships and high starting salaries, the quality of the education — it’s a very economical MBA program choice,” BYU MBA program director John Bingham told Business Insider. We decided to take a closer look. BYU Marriott School of ManagementFacebook/BYU Marriott School of Management The cost of the degree The tuition and fees for the entire program totals just $47,900. That’s less than half the price of top MBA programs at most private schools in the US and three times less than the $144,340 price tag of The Wharton School at the University of Pennsylvania, the top school on our ranking. Brigham Young, which is subsidized by the Church of Jesus Christ of Latter-Day Saints, is even cheaper for members of the church: LDS students pay less than $25,000 for an MBA. On top of that, more than 80% of students receive additional scholarship funding of at least a few thousand dollars, so many graduate with little debt. High placement and competitive salaries Three months after graduation, 92% of students have accepted job offers, and another 5% start their own viable companies. BYU puts a large emphasis on entrepreneurship, and...

Here’s Why You Don’t Need an MBA to Get Ahead in Business...

There are other paths to the corner office. The Leadership Insider network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question: Career wise, is it better to be book smart or street smart? is written by Suri Suriyakumar, chairman, president and CEO of ARC Document Solutions. While I would never discount the value of a formal, advanced education, my personal experience shows that life experience, combined with hard work, a desire to succeed, and a willingness to take risks, can lead to the corner office. I deviated from the norm from the beginning. In what was probably one of the biggest risks I’ve ever taken: I decided to pursue a non-traditional — and rather circuitous — path to a career in business. My father was the first person from his village in Sri Lanka to get a college degree, and all of my siblings followed his lead, pursuing college degrees as well. But I bypassed the college and business school route in favor of the school of hard knocks. I attended a marine academy so that I could repair ships and sail the world. I quickly became street smart—or perhaps it would be more accurate to say that I became “sea smart”. I found that I liked to lead but not necessarily from a ship’s boiler room. So I left the sailor’s life behind and joined an executive training program at an international conglomerate. I had the benefit of working with a wonderful mentor who helped me grow, drive new projects, and make my way rather quickly to a directorship…Read full story:...

Why does the MBA degree remain popular?

The obituary of the MBA degree has been written several times since the 1950s. As the Economist has pointed out, a Ford Foundation report in the 1950s criticized the degree for being weak and irrelevant. In the 1980s, Business Week complained that MBA graduates relied excessively on mathematical models of management and worse, they expected to reach the top of their organizations with unrealistic rapidity. In the aftermath of the financial crisis of 2007 and 2008, many observers—including Harvard Business School professor Rakesh Khurana—commented on what Khurana called the “unfulfilled promise of management as a profession.” Even so, despite all these jeremiads suggesting that the end of the MBA degree is nigh, this degree continues to be popular. Why is this the case? Let us investigate. The first point has everything to do with dollars and cents. Since it typically takes at most two years to complete the MBA degree, relative to the financial benefits of a college education only, the MBA is the fastest way to increase one’s salary, sometimes by a significant amount. For instance, data and rankings produced by the Economist show that by attending the Booth Business School at the University of Chicago, which is currently the top-ranked business school, one can increase one’s pre-MBA salary by 73 percent. Attendance at the Fuqua School of Business at Duke University—ranked No. 20 in the world—increases one’s pre-MBA salary by a whopping 86 percent. The point to grasp is straightforward: Relative to the monetary and time costs, the rewards from a MBA degree, particularly one from a top business school, are substantial. Second, in this era of globalization, the MBA degree is portable across national boundaries in a way that medical and law degrees, for instance, are...

MBA by numbers ? Return on investment

If money is your motivation for studying for an MBA, then the earlier you enrol on your degree programme the better. Data from the Financial Times 2015 Global MBA rankings show that the pay increase of younger graduates in the three years after graduation outperforms that of their older counterparts in both percentage terms and absolute terms. The rankings are based on a survey of the MBA class of 2011 and analyses their career progress and salaries. Pay increase of MBA graduates three years after graduation compared Participants aged 24 or under when they started their degree saw their salary increase by nearly $69,000 in the three years after graduation, up 145 per cent on their pre-MBA salary. Their older counterparts, those aged 31 or above, had a pay increase of $56,000, or a 70 per cent increase. Those in the middle age group, who were 27 to 28 years old when they began their full-time MBA, had a pay increase of $67,000, just about doubling their pre-MBA salary. Broadly speaking, the same pattern occurs in all industry sectors and countries, regardless of whether graduates work overseas or move to a different industry. On average three out of four respondents to the FT survey were aged between 25 and 30 when they started their MBA, while 21 per cent were 31 or above and the remaining 4 per cent were 24 or younger. The older the participants were, the more likely they were to enrol in one-year European MBA programmes as opposed to two-year US-type MBA programmes. On average, 75 per cent of those aged 26 or under attended two-year programmes in comparison to only 43 per cent of those aged 31 or above. An MBA is a substantial...

The ROI Of B-School – Reach, Opportunities And Income...

There is no shortage of predictions about the grim future of business education. Disruptive technology, escalating costs, staffing issues, and market competition are high on the list of challenges faced by business schools, big and small. But ask alumni about the value of their business degree and you get an overwhelming endorsement. Indeed a new survey shows that business school alumni earn more, rise fast, and expand their opportunities. The Graduate Management Admission Council (GMAC) surveyed more than 12,000 graduate business school alumni from more than 230 graduate business programs at 71 universities in 16 locations across the globe. The results of their 2015 Alumni Perspectives Survey Report offer a global snapshot of employment and career progression for alumni representing the classes of 1959 through 2014. Ninety percent of business school alumni say graduate management education boosted their earning power, with many climbing to the executive ranks, and reporting high levels of job satisfaction. Graduates gave overall high marks to the value of their education in driving their professional success, as well as positive reviews to their business school’s alumni association, with a majority saying their engagement with these associations has contributed to their success. “Graduate management degree-holders consistently tell GMAC their education is a solid investment and a spur to personal, professional and financial achievement, even in up-and-down economies,” said Sangeet Chowfla, president and CEO of GMAC. “A graduate management education isn’t just a degree, it’s a career catalyst.” With many business schools reporting the strongest MBA job market for years, and an employer survey that shows nine out of ten employers intending to hire b-school graduates in 2015, this comes as more welcome news for the industry. The GMAC survey shows that an MBA or other graduate...

Why A Harvard MBA Doesn’t Make Everyone A Leader...

If you’re thinking of assuming a leadership position in a large organization, a Harvard MBA is perhaps the best academic credential to have—provided that you are admitted to the program, you can afford the bill, and you complete the program successfully. But the Harvard MBA won’t warranty you a leadership position—a position in which you receive direct reports, are responsible for profit and loss, or are part of senior management. That’s the finding of a recent survey of HBS graduates conducted by Robin J. Fly and Colleen Ammerman and published in the December issue of Harvard Business Review. Among HBS graduates working full-time, 81% of men and 71% of women had direct reports; 58% of men and 45% had profit and loss responsibility; and 57% and 41% had positions in senior management. An obvious problem is the balancing of family and career, which becomes more evident among female graduates. “These results indicate that Harvard MBAs aimed for and continue to value fulfilling professional and personal lives,” write Fly and Ammerman. “Yet their ability to realize them has played differently according to gender. Given the gender gap in career outcomes, gaps in career satisfaction and in successfully combining work and family are unsurprising.” A less obvious aspect of the problem is the role individual personalities play in achieving and maintaining a leadership status. As discussed in The Ten Golden Rules Of Leadership, leadership requires an uncommon composite of skill, experience, and ripened personal perspectives—personal values, priorities, and a life code that determine the quality and substance of life…Read full story:...

When Is An MBA Worth It?

Earning an Master’s in Business Administration (MBA) can help professionals enhance their career opportunities, receive increased compensation and job promotions. An MBA can provide the skills and knowledge necessary to start a new business, and many employers require an MBA for certain management or leadership positions. On the other hand, an MBA from a top business school can cost nearly $100,000 – a substantial expense for recent graduates and substantial time out of the workforce for early-career professionals. The question becomes, is earning an MBA worth the cost? It all depends. (For more, see: Should You Get An MBA?) THE MBA DEGREE: AN OVERVIEW MBA coursework involves a broad spectrum of business-related topics including accounting, statistics, economics, communications, management and entrepreneurship. MBA programs not only ready students to work for financial institutions such as banks but also prepare them for management positions in other fields or as founders of start-up companies. There are two routes one can take to earn their MBA: a full-time or a part-time program. Although both programs will result in an MBA, there are trade-offs to consider. A full-time student will find it difficult to work for the duration of their two or three years at school. These programs are most popular, therefore, with younger students who have recently earned their bachelor’s degree and can afford to study full time on campus. (For more, see: Part-Time Vs. Executive MBA: Which One To Pick?) Part-time MBA programs typically come in two flavors. The executive MBA (EMBA) is designed for students who have been in the workforce for some time in executive or leadership roles and who are typically 32-42 years of age. These programs can be very expensive, and students expect that their employer will pick...

Is business school worth it?

It’s a fair enough question considering the average cost of one year at a top-ten MBA program is currently $58,554 in the U.S., not including opportunity cost (lost income). Taking two years off from the professional world during the height of working years is a scary proposition to say the least. As the peak of the recession fades from view and more jobs become available, less people in the U.S. seem to be ready to take on that risk. Applications to business school have dropped off significantly with elite institutions like The Wharton School at University of Pennsylvania seeing a 12% decrease over four years (as of 2013). It’s not only Wharton feeling the pinch as applicants dry up. Schools like Harvard are lowering their application barriers to attract more potential students. In order to gain admission to the fabled program one decade ago a prospective MBA had to complete eight essays, today there is one and it’s optional. Columbia Business School is asking its applicants to sum up their career goals in just 75 characters. Wharton Dean Geoffrey Garrett says that focusing on the number of applicants isn’t the right way to fix business school in the U.S. It’s about offering students more. He compares business school to the retail industry. Sure there’s a lot of competition online but if a store offers a “richer, better and deeper” experience it still does well. Garrett believes that the pressure is good for the current business school model. “It forces us to focus on the real value add of an on-campus degree,” he says. “It can’t just be the credential and the stamp.”..Read full story: Yahoo Finance...