9 MBA's Cost Over 200k: Are MBA Programs Too Expensive?
Hey Monkeys,
Just read this article about the total cost of several MBA programs. This article details numerous factors and breakdown for the cost of attendance for the top 25 MBA programs in the United States.
I found that it was pretty interesting, but unsurprising, that no school in the top 25 MBA ranking list had a decrease in price, which is shown below.
No school in the Top 25 posted a decrease in total cost
In addition, the article also points out the income lost when attending business school which is truly immense.
But the biggest gap in estimated cost versus reality is the fact that schools don’t calculate lost salary. Take Stanford for example. Most of the MBA Class of 2018, about 20%, came from the investment management/venture capital field, where the average salary is about $90,ooo per annum. That’s $180,000 someone won’t be making while they’re getting their degree. Add that to the $225,594 official estimated cost of the MBA and you have a new total cost figure of — gulp! — more than $405,000.
Below are more stats on costs and rankings for the top 25 MBA programs.
School Name
Total Cost
2016 Cost
Increase
Annual Tuition
Annual Room & Board
Stanford
$225,594
$210,838
7.00%
$68,868
$34,653
NYU (Stern)
$220,948
$206,474
7.00%
$69,086
$25,320
Pennsylvania (Wharton)
$218,900
$200,908
9.00%
$76,580
$22,450
Harvard
$213,600
$196,800
8.50%
$68,792
$28,028
Columbia
$209,424
$199,648
5.00%
$72,000
$21,375
Dartmouth (Tuck)
$208,300
$194,850
7.00%
$68,910
$28,673
Chicago (Booth)
$207,518
$193,208
7.40%
$69,200
$19,920
MIT (Sloan)
$201,028
$196,028
2.60%
$71,000
$19,744
Northwestern (Kellogg)
$200,434
$186,026
7.70%
$68,955
$17,100
UCLA (Anderson)
$194,220
$170,982
13.60%
$58,588
$21,473
Yale SOM
$187,800
$176,240
6.60%
$66,650
$21,720
Duke (Fuqua)
$184,476
$168,376
9.60%
$65,665
$12,800
UC-Berkeley (Haas)
$183,342
$170,415
7.60%
$59,739
$21,710
Virginia (Darden)
$183,248
$174,874
4.80%
$65,800
$17,078
Cornell (Johnson)
$179,508
$174,888
2.60%
$63,894
$16,760
Georgetown (McDonough)
$177,040
$170,640
3.80%
$56,400
$20,717
UNC (Kenan-Flagler)
$174,392
$169,105
3.10%
$61,274
$18,038
Michigan (Ross)
$173,980
$165,144
5.40%
$64,350
$14,676
Carnegie Mellon (Tepper)
$173,556
$168,292
3.10%
$64,000
$15,504
Wash U. (Olin)
$172,922
$167,077
3.50%
$57,900
$17,696
Emory (Goizueta)
$168,786
$162,336
4.00%
$59,000
$19,016
U. Wash (Foster)
$152,850
$149,322
2.40%
$47,214
$29,211
Notre Dame (Mendoza)
$146,576
$142,452
2.90%
$52,188
$10,000
Texas (McCombs)
$146,028
$140,264
4.10%
$51,804
$18,060
Indiana (Kelley)
$141,920
$138,594
2.30%
$47,127
$12,708
I believe that it can still be worth it to get an MBA; however, the increased price and lost income is closing that gap.
Do you think that an MBA at top 9 school worth it? What about top 25? What is the most that you would pay for an MBA?
Comment below.
How worth the cost is a top 20 MBA if you don't plan on changing careers or field? (Originally Posted: 03/06/2017)
Let's say I go to kenan flagler and get a corp finance concentration MBA. If I was already a Corp financial analyst pre MBA with 3.5 years experience @$50-$60K, how worth it is getting that MBA? Assume no scholarships, in state, and age 33 upon graduating with MBA.
I keep hearing how full time MBAs are mostly for career switchers??
Thanks!
Worth it? Absolutely yes, you'll come out making six figures even in corp fin, and it also opens up a ton of doors mid-career.
The more relevant question for you is if you could get in to a top 20 MBA with 3.5 years experience in corporate finance at the age of 33. You'll need to crush the GMAT first, 720+ hands down, probably 740+ due to your age. Unfortunately, if you're applying in a year, you'll be 35 when you're matriculating. Most top MBA programs might only enroll 1-2 students at that age, if any. My gut reaction based on your experience and salary range is that you aren't competitive from a resume standpoint either. These programs are populated by the best, brightest and most ambitious young business minds in the world. To get accepted over 30 you need to exhibit standout career progression and strong leadership capabilities against even this impressive peer group; most were also around six figures or more in comp when they came to the program.
Since your experience is also light for executive programs, you should consider looking at part time/weekend programs, your chances would be more realistic. You should consider a consultation with an MBA recruiter, most will give a half hour for free, to understand what your options might be. Take the GMAT first or they won't be able to provide any real value.
He says he'll be 33 upon graduating from his MBA. So he'll be 31 when starting. It's not like he's young, but 31 starting is nowhere near as bad.
Good catch, I did misread. Points still stand re: experience/resume/GMAT.
Top 10 MBA vs Low Cost MBA (Originally Posted: 12/01/2014)
I'm seeking your advice in choosing a B-School, predominantly from the cost aspect (tuition and accommodation). Looking at the FT ranking, the top 10 B-Schools call for a big investment, plus my 2 years/1 year with no income. Yes, the quality of education, brand name, recruitment cell, brilliant diverse class and networking add immense value to one's career, but having gained some classic experience in business development, sales, "relishing" start-up and turn-around management, how do you see the Top 10 versus the rest, especially keeping in mind the following thought -
How Indian MBA fair against the Top 10? I can see Indian Institute of Management, Ahmedabad, Indian School of Business and Indian Institute of Management, Bangalore, in the FT list (even though they are out of top 10). If we focus only on education and cost, how do they fair against the top 10? I have also heard that these 3 have a "international immersion" program which offers the candidate a platform to gain exposure in the university (abroad) of their choice.
Through my research, I found that Indian MBA cost about USD 42,000 versus Top 10 MBA (USD 200,000)! And, of course, that debt repayment (with interest) is a loving affair! ;-)
FT 2014 B-School Ranking: http://rankings.ft.com/businessschoolrankings/global-mba-ranking-2014
I'll specialize in finance/strategy
Your comments would be of immense help. Thank You!
FT is viewed a joke a ranking by just about everyone. IMM shouldn't even be considered a business school - if you get hired from a bank or consulting firm, you come in entry level, not post-mba level (and those are the TOP of the class, most people stay in India and make less than a 1/3 of a USA MBA).
What do you want to do with an MBA? Where do you want to do it? These questions are pretty critical in evaluating options.
"What do you want to do with an MBA?"
--------- Well, a network of brilliant fellow members, formal and structured business education from experts in a diverse talent pool and exit options - leadership, PE, entrepreneurship - are enticing factors
"Where do you want to do it?" ------- Place doesn't matter, but cost of MBA does. I don't want to carry a debt of USD 200,000. And for me, MBA is NOT a passport to success.
Your say?
These are relevant factors for considering an MBA, but don't really answer the question. There is some time for exploring career options once you're on campus, but you have to have a focus. Recruiting for many tracks starts the 2nd-5th week you're on campus.
Short term goal - What job do you want at graduation? 2-3 options to consider is probably fine. Long-term goal - What do you want to do 10-20 years down the line? What skills/experiences do you need to get there?
Short-term goal: I'd like to spend years in PE to learn investing in businesses (including topics like valuation, financial analysis, capital structures, ...). I have an inclination towards corporate/debt restructuring and IB. So, I'll hunt for such opportunities in a structured organization (boutique/start-ups are excluded) to gain experience in M&A transactions, distressed investing and chapter 11 Bankruptcy. That's my sweet 5-8 years. Since I come from a non-finance background, this will suffice the required skills.
Long-term: With leadership stints in establishing and turning around businesses at 24, Technology Sales and Business Development, plus skills developed during PE & IB years, I'll gun for general management/P&L responsibility in F500. Of course various growth strategies, new market entry strategies, financing options, profit maximization, investing in businesses, deal structuring, turning around distressed companies are always part of the game when I'm gunning for Executive positions.
Your thoughts?
You need to be more specific. Do you want to do ibanking or management consulting or general management or corp development or tech strategy or PE or entrepreneurship or something else after MBA? do you want to work in India or in US or in other regions?
Agreed, but do the PE or IB firm only hire from Top10 Global B-Schools? Does India (or any other state for that matter) not attract large/Tier1 PE or IB firm for recruitment? Is Top 10 B-Schools are the only options for "high finance" jobs?
Suggestions, comments, views will be highly appreciated
Unfortunately your chances at a top, structured PE firm are near zero anyway as you don't have any finance experience pre MBA - and even an MBA at Harvard/Stanford/Wharton etc most likely won't get you the job you want. Zero chance that an Indian MBA will do that for you at a US firm.
Do you want to work in the US or India immediately post-MBA?
Purely speaking on a basis of location (and this is only from my observations, so not a fully comprehensive scope) - If you want PE in India, one of the in-country options may work, but you will still face some external competition (and likely be beaten) by Indian citizens who are top 10 US/European MBA grads. If you want to go outside India, I wouldn't even consider anything but a top 10 school.
It may be appealing to take a shorter/less expensive route now, but if you can get into H/B/W, debt repayment will not be an issue for you. Cost should only be a determining factor in the case of a "tie".
I wouldn't worry about it. You won't get into a Top 20 school anyway.
Sometimes being bluntly honest is the only way.
Why would that be?
This is the STAR comment of this thread! Thank You!
Imagine a company is looking to buy another company, but they don't have enough cash. They're not willing to take a loan because they "don't want to carry a debt of USD". How would you recommend they proceed? My advice would be to sack up, take some loans, make the business profitable and sell afterwards. My advice to you is the same: take on the debt if the value of what you're obtaining can be sold at a profit down the road. In any case apply first and see if the admission counsel makes the decision a lot easier for you.
Liked your analogy. Thanks for the effort!
OP, I would reach out and talk to alumni or current students in those top schools and find a realistic goal. Like everyone else is saying, an MBA from anywhere will not get you to your goal. Either change the method (not likely) to the goal or change the goal (more realistic).
Some of you guys are harsh. But to their point OP, look around this site and you will find a lot of your questions will be answered.
It's a shame that a bunch of smart guys on this website try their hardest to crap on people.
It's like they feel bad about themselves and want to step on others.
SMH
hmmm....liked the emotions and comments from people. Thanks for your concern and advice. I guess I need to do a lot of home-work before diving into it. Thanks for making me realize it. Will come back to this forum again if I hit a roadblock in my research
IIM is one of those schools like Carnegie Mellon for CS or LSE for Econ or Polytechnique for ORFE. Smart money knows it's a badass school, less-smart money has never heard of it.
When I was at Lehman, several of our MBS traders hailed from IIM. It was the one MBA program that was quantitative enough to allow folks to trade a really complicated security.
I am not advocating turning down HBS- or Columbia for that matter- for IIM.
I do think IIM gives graduates a shot at finance.
If cost makes an MBA business schools">M7 not just an uncomfortable choice but an impossibility, IIM is your next best bet. But if you have some money saved and if cost is a big concern but not something that makes the degree impossible, a lot of thought should be given to MBA business schools">M7.
You entirely missed the point that OP wants to do PE/IB with restructuring focus. If he said he wants to do trading or structured credit investing I'd also say IIM is pretty good. Our senior RMBS PM is from IIM.
I believe people are not nice here because OP seems did little work before posting such question. If he briefly read thorough posts in this forum, he would know the answer without wasting our time. Anyway, I'm not against regional elite schools (especially in highly competitive environment like east Asia).
We don't know what kind of PE or IB he wants to do. I had friends out of UIUC who did PE. IIM is at parity with UIUC IMHO. We also don't necessarily know much about the foreign PE scene. Maybe it's easier to land at some PE shops in some countries in Asia.
I didn't really do any work to get into this industry. I went to two interviews. No networking. Modest research. (I knew investment banks existed and that they dealt with finance; I had no idea how they were different from Edward Jones or what a quant did.) People helped me with advice along the way. And if you don't ask you don't get. Being IlliniProgrammer, always hitting the brick wall of people who want to spend crazy amounts of money for stuff they don't need, I have a lot of patience for people asking the same advice over and over again.To Dick Fuld's comment, a C in an Engineering course is a fairly typical grade. I don't know how you guys do things at Colorado School of Mines but at UIUC a B or an A means something.
I still don't know what you meant about helping the OP and the grade reference. Maybe it was intended as an insult.
IIM has incredible brand recognition and value in India. If you want to stay in India, you can't go wrong with an IIM MBA.
Lots of good advice on here, but a heads up: you don't exactly go into "PE to learn investing in businesses (including topics like valuation, financial analysis, capital structures, ...)". You go in having that stuff down, as most PE shops are small and don't have the time or resources to train you. You're expected to hit the ground sprinting. Do check out F500 corp fin roles. You can certainly get those jobs from cheaper MBA programs, and they usually provide a solid work-life balance.
On a second thought, if Top PE firms don't recruit from IIMs, can anybody highlight his/her experience in joining a boutique PE right after his MBA/undergrad and then joined hands with the big-wigs? How's the difference in the journey? What are the challenges did you face while convincing your hiring boss in the Top PE?
If you can highlight the names of the boutique firms along with the kind of work you did and the platform you gained, it will be highly appreciable.
Further, what are the exit options from the top PE firms?
Can't really speak to the first part.
For the second part, it is highly unlikely anyone will be willing to name their boutique on a public message board. They don't want random people that can't be vouched for bugging a 10 person shop. Just not gonna happen. May have to do more research on your own to find shops that match your experience/skills. Side note: I believe the word you were looking for was "appreciated", as "appreciable" basically just means large (i.e. my stocks are trading appreciably higher today than they were last year). Appreciated shows gratitude.
On your last point, PE is often viewed (at least in the finance circle... which is what matters here) as the exit option from other fields. Very few people chose to leave PE once they are in (one of the reasons why it is so tough to find jobs in the field). I mean, why would you chose to leave a 7-figure job at a "top PE firm" for anything else?
I'm not hating on OP or whatever and happy to see him prove me wrong in future. Have interviewed for admissions in my school where every now and then you'd get this one candidate who had no idea what MBA entails or what kind of job he/she is looking for and how to get there, and instead just throws some random keywords around a career they have no shot of getting. It's a painful experience for both sides and I don't find OP far from that scenario.
Yeah, I remember once my Grandmother saying "people always talk about their own past situation. They just love to point it on somebody else". Good to know you!
Before anyone thinks OP is trolling with the 7-8 figure income comment, the Rupee is 2-3 figures less than the USD. I would be unsatisfied with $20K/year, too.
For an MBA, prestige is critical. Go to the best one you get into. Yes, the debt sucks, but every study has shown that top b-schools pay off over the long run. Do not jeopardize your future by being overly stingy.
I would just like to echo what Masterz57 and mbavsmfin have been saying. It really sounds like you came in here with your mind made up and that you were just looking for confirmation. Unfortunately (mostly for you) this board as a whole does not agree with you. If you actually want to make it big in finance or strategy you're going to have to take risks, some of those risks are in what you advise the companies to do but others will be in what you personally have to go through. It's possible to make it without getting the top MBA but its far less likely for a myriad of reasons.
Also gaining admissions isn't a cakewalk. There are reasons that the US has far more than 10 MBA programs and a major one is that it's very difficult to gain entry to them. As an international student you face even more competition. Your knowledge about the process is currently lacking but so was mine a year ago so that's fixable. In any case I think everyone would be interested in you're test scores/UGAD GPA/Class Rank/Work experience to figure out if you have a realistic shot at a top 10 or even top 20.
Apologies to all, if I conveyed anything rudely. Thank you for your active participation.
Is B school worth the cost? (Originally Posted: 09/18/2011)
It seems like b school costs ~$250k (tuition + living expenses). This is essentially $500k pretax. Then factoring in ~$250k per year in opportunity cost, the total is close to ~$1mm pretax.
Are even the best b schools worth this cost? How can anyone justify it, other than that it is also enjoyable as a vacation from work?
this has been talked about A LOT on this website. ultimately its only worth it if (A) your current job sucks and you feel like you can't advance your career (B) you really think you could use 2 years to brush up on academic knowledge/relax and (C) you get into a very good b school.
So....for the majority of b school students it wasnt worth it. (I think)
if your 1mil buys you into an alumni network of people worth a hundred times that, i would say yes. its worth it.
250k? how hard are u gonna try to spendwhile youre in b school lol
$250K opportunity cost? That's insane.
You need to go to bschool if you want to get a higher level network than the one you currently have. Or you want to make a career change into a higher paying field. Unfortunately, most see business school as a two year redo of the partying that you may not have done in college because you were working your ass off to get good grades.
Article from NYTimes tracking a set of HBS MBAs from the class of '96 http://www.nytimes.com/2006/06/11/business/yourmoney/11harvard.html?pag…
[quote=wikit]You need to go to bschool if you want to get a higher level network than the one you currently have. Or you want to make a career change into a higher paying field. Unfortunately, most see business school as a two year redo of the partying that you may not have done in college because you were working your ass off to get good grades.
Article from NYTimes tracking a set of HBS MBAs from the class of '96 http://www.nytimes.com/2006/06/11/business/yourmoney/11harvard.html?pag…]
or a two year redo of the studying that you may not have done in college because you were busy partying your ass off.
http://www.bloomberg.com/news/2011-09-13/full-time-mba-apps-decline-for…
Interesting...
How the hell are you getting these numbers ? Can you walk me through your math besides the opporunity cost of course, that'll be different for everyone.
Well, top MBAs claim the cost is just under 200k (and of course they way low-ball living expenses - assume you will eat at dining hall every day and have almost no entertainment expense). So I tack $25k extra on annually ($10k for trips, etc that you are expected to go on + $40 per day in spending). So the total excluding opportunity cost is ~$250k post-tax. At a 50% tax bracket (the case for most people with a couple years of finance experience in NY), pretax cost is ~$500k.
I assume most people with a couple years of experience are making ~$250k annually, so 2 years of opportunity cost is ~$500k pretax. Total is ~$1mm.
Especially if you already went to a top undergrad, I don't see how this is worth it (unless you are in pe and are required to do it - but even then I would think a better option would just be to go to a pe firm or hf that doesn't require it).
i hope youre actually making that much if youre gonna claim thats how the tax brackets work because it isnt lol
idk if anyone spends 250k on b school -- 150-180-200 sure...
for the IBD analyst who gets the A2A promote
forgone income ~600k USD 2 years 'set-back' in career progression Explicit cost of MBA ~ 180-200k
But personally, IMO, getting a 2-year breather after analyst stint ... priceless (and necessary to maintain sanity).
I think the issue with people trying to quantify the advantages of MBA or downside more so is that they only figure the immediate return and don't take into consideration how an MBA a top school may help you get a job in a down economy later on or snag other business opportunities you may be short on
costs of an mba are relatively easy to quantify, benefits are essentially impossible to estimate.
you're double counting. You can't count the cost of living expenses at bschool and then the opportunity cost. If you don't go to bschool, are you not going to have living expenses? Therefore, you should only count tuition plus opportunity cost.
This.
It's amazing how every analysis of cost of MBA I see disregards this blatantly obvious point...living expenses are irrelevant in the analysis. Now, interest costs related to debt taken out to finance living expenses can be counted (as well as the less obvious effect that a higher debt burden puts on your career in terms of flexilibity/risk tolerance).
It's hard to measure the greater career optionality that you get as a result of the MBA, but there should be some calculated benefit in terms of higher expected value of earnings (I think it limits downside and creates more chances for upside) and interesting career experiences. Also, opportunity cost in an environment like this probably goes down as a result of a higher discount rate (riskiness of current earnings stream is higher).
Bottom line: the MBA is not for everyone (tuition costs alone push the boundaries of total incremental value added) but if you view this as more than just a financial transaction, as an interesting life experience, then it will be worth it. But, if you're NPV-ing this thing to death, and your opp cost is pretty high, i.e. you enjoy your job, the people you work with, make good $, and have good upside, etc. then I would think rather hard about staying put.
If I have much more free time from going to b school, I think I'll spend a lot more.
okay so you can go ahead and buy bottles every night in meatpacking while the rest of your classmates go to bars on campus
are you actually in IBD from wharton with a 3.9 and 790 or is it all fabricated?
The original estimates are way off. Let me provide some realistic insights...
I am currently in business school and spent $70,000 last year. About $50,000 in tuition and $20,000 in living expenses. I didn't have many years of work experience prior to business school and wasn't making the purported $250k in annual income...
If you want to do investment banking, it is important to have a long-term view. Don't be myopic and stress out about short-term finances. For example, I was a summer associate at a bulge bracket bank this summer and saved a lot from my summer salary alone. Additionally, my sign-on bonus alone ($55,000) is paying for the second year of business school... All-in associate comp first year out of school is $200,000... Financially, you are going to be fine...
Vancouver, how did you manage to swing a $55K sign-on bonus ?
That is typically the signing bonus (+ various other summer bonuses) that are paid out to summer associates who sign their full-time return offers. This figure is pretty much the same for all MBA candidates at all bulge bracket banks.
The key is to commit to a top business school that recruits well into banking...
Of course it is worth the cost! Look at what yahoo says:
You can go to HBS, get your MBA and become a database administrator, which will put you on the way to the top. If you don't think that's a sweet deal, I don't know...
lmao.
bschool, what a fucking scam lol
Why do MBA programs cost double the amount of 2-year MSF programs? (Originally Posted: 03/11/2015)
After looking into b school for the past couple of years, I've noticed that MBA programs are ridiculously expensive (>$100k). That's a topic itself, but what I can't figure out is why MBA programs are often double the price of a MSF program that is still 45-60 hrs at the same school.
You'd think it would be the other way around. In an mba program, you're taking a lot of intro courses (micro and macroeconomics, financial and managerial accounting,etc...) while an MSF program teaches much more high-level analytical courses.
I can't figure it out.
Return in investment. MBA grads have a higher salary and programs can charge more for the education.
One thing you'll learn in an entry level MBA economics course is that the value of a good or a service is in no way determined by the amount of effort, skill, labor or cost of materials required to produce it.
MBA Too Costly? (Originally Posted: 04/28/2010)
I read this article, and it really got me thinking about the topic, so I wanted to discuss it with you all: http://20somethingfinance.com/why-graduate-degrees-are-a-rip-off-crunch…
Basically, the article says that MBAs cost about $250K (when all costs, including opportunity costs, are considered). Furthermore, the article talks about the high costs of taking out huge student loans, and makes the argument that you won't generally break even until your 50's.
What do you guys think? Are many/most MBAs not worth the cost?
use the search function !!!!
obviously if you have secured an associate position at a top BB IBD or a top PE, then there is no need for an MBA. Notice i said secured, not some 2 year stint and go to B-school. But if you are in the 2year + B-school predicament, you have no choice now do you ? plus if your in such a position the MBA degree allows for advancement in PE or IBD which means more $$, which will be more than enough to cover $250k
in conclusion it depends on your situation.
Think broader, I'm not only talking about IB.
There are too many confounding variables and individual contingencies to calculate the true value of an MBA (esp. from a pure ROI perspective). For example, how do you measure the value of spending 2 years with motivated, like-minded people who are passionate about developing their careers and focusing on personal growth. Some people need a 2 year break from work to re-energize and figure out what it is they want to do with their lives.
I will say that if you are focused on a highly competitive industry going to a school ranked out of the top 15 (maybe even M7) is a waste of time and money. Again, really depends on the person.
Good points in there.
There is no way to calculate how many people went to business school and sat next to someone who sparked a great idea in them and with whom they started a business, which not only provided a nice stream of income, but that gave them the lifestyle they always wanted. Ultimately there are just too many factors involved to have a "yes or no" answer. For example, an MBA from a local unknown school could prove to be a huge benefit to an owner of a small business who is just looking for ways to run his business in a more efficient manner. In this case, an MBA from HBS would be a waste of time and money (mostly money) for this small business owner, just the same way an MBA from a local, unknown school would be for an IB analyst coming out of a BB trying to get into a PE megafund.
An MBA is far more valuable to the majority of the people on this forum then it would ever be for the majority of the population (due to potential career paths and overall motivation to be "successful"). Personally I have longed believe the greatest value an MBA brings is the intangible aspects like networking, not the actual academic facet. Not to mention 250k over a career/lifetime tends to be a small amount of money to those who attend a highly ranked business school. Oddly enough for most of the aforementioned people it isn't a question of whether or not it was a great value as it is a necessary part of career progression to stay competitive with their "overachieving" coworkers. Note: I say overachieving because to most of the rest of the world the members of this forum are, however, I feel that's because many people are unmotivated and recognize their shortcomings i.e. their inability to achieve the same.
Regards
He is comparing apple to watermelon to grapes. You can't use the cost of top MBA (which is the most expensive) and compare it to value of all graduate schools combined (which includes Masters in History, Education or Psychology). Give him the average entry-exit salary for Top 10 (which is where he mentioned he wants to go), his math will have a very different outcome.
The article you link is terrible math. He takes the average cost for a top 10 MBA program and compares it to the average exit salary for all master's degrees (including liberal arts, etc. which will have substantially lower average salaries). Basically he inflates the cost while vastly understating the average earnings.
http://www.admissionsconsultants.com/mba/compensation.asp
This is from US News and World Report in 2008. While I question the agency's MBA rankings at times, salary data is generally fairly accurate. Even if you were to apply a universal 30% discount, the number are vastly larger than the guy uses in his analysis.
250K??? Depends on variables such as the course, whether the school is in a city or small town the list is endless. Best thing to do is to get a scholarship (easier said than done) ESMT in Germany is offering scholarships to top applicants: http://www.businessbecause.com/business-school-news/outstanding-female-… It's MBA is highly ranked by the FT too
Cost is more likely $1MM
That's a little high even if you work in Megafund PE.
For me personally, I mentally wrestle with this topic everyday, not so much because of tuition fees and foregone income but just the time investment of 2 years. The era of guaranteed jobs is over and I know plenty of people struggling to find jobs even coming out of schools like Columbia. Being unemployed at 27 having just spent $150K on an MBA is too risky for my taste at this point.
$350k annual cash comp x 2 = $700k (pre-tax)
Tuition, books, other incremental expenses ex. living expenses (after tax) = $120k = $200k pre-tax
Lost co-investment opportunity easily accounts for the remaining $100k (not to mention any small slice of carry you might have).
very very very few people are pulling in 350k, that's ridiculous
Opportunity Cost of an MBA (Originally Posted: 12/23/2010)
Most of the discussions on WSO about the cost/benefit of an MBA focus on whether an MBA is worth it in general. I'd like to get a discussion going about a specific comparison. I'd like to compare an MBA, with what I see as the main opportunity cost of the degree (at least for myself). That is, I'd like to compare getting an MBA vs. starting a business.
One could spend 2 years working on an MBA. Forgoing salary and racking up debt, as well as putting in 40 hours a week in lectures/homework. Even if we're talking about a part-time MBA, there's still the student loan debt, as well as 3 years and 15-20 hours a week of lectures/homework.
Or, you could start your own business. Investing 3 years and 15-20 hours a week building something from the ground up; which potentially seems like a much better way to learn about marketing, strategy, management, etc. Not to mention, there's a tremendous amount of potential upside. Lastly, I think what Patrick did is so money; that is, running a business and then attending an MBA program. I imagine he gets a lot more out of the lessons, and it's cool that he's able to focus on running WSO instead of recruiting. In other words, you could get an MBA if/when your business gets off the ground.
So, what do you guys think? What's a better use of your time, money, and effort? An MBA? Or starting a business? And, of course, why?
I never understood why the general public likes to compare pursuing an MBA with starting a company. This makes the assumption that everyone pursuing an MBA wants to own their own company one day, and this is simply not the case.
For example, my friends and I don't want to pursue an MBA to eventually become an entrepreneur. Instead, we want to get an MBA to expand our networks, become more appealing to various companies, and increase our compensation.
This is just my two cents. It'd be interesting to get a budding entrepreneur to share his/her thoughts.
Honestly, I understand that many people who want MBAs don't want to be entrepreneurs. I'm just pointing out that starting a company probably teaches you more about business. But, you're right, getting an MBA is a good option for lots of people who don't want to start company and want to be highly successful working for someone else.
Outside of a top 10-15 program or some really good regional programs, MBAs are a waste. Better to do a PT program or a specialized masters.
No sense doing 2 years at a 40th ranked program to do F500 at a slightly higher pay and title. Do an MSF, MA Econ, MFE, etc. 1 year, additional network and companies usually count it the same as an MSF.
When I did my MSF I would regularly get interviews with top companies in their treasury or finance depts. and be considered as an MBA.
MBA - The Dilemma! Costs are too damn high! (Originally Posted: 07/31/2011)
I was talking to my friend recently and he jumped on my plans to go to business school. He made me think about it a little bit and I decided to get the forum's views regarding the cost and benefits of MBA (assume at least top 20). If anyone here has an MBA and has an opinion on how it helped or did not help, that would be really helpful.
Reasons to get an MBA: - I'm a finance major and already work for a bank, so the career change is not that relevant.
1) Change roles - For ex CB to IB or IB to PE or BO to FO. 2) Get that thing on your resume so it could help in career progression - managerial roles. 3) Networking/ Recruiting 4) Education
Reasons not to get an MBA: 1) Cost = 160,000 (tuition, living,interest) + 150,000 in lost revenue - 25,000 (summer interships) = about 285,000 or more. 2) Missing out on career development = actual work is the best education and you can learn a ton in those 2 years. Also, the missed opportunities. 3) You can network in the industry/firm by joining industry organizations. 4) You use about 15% of what you learn in business school.
I'd really like to hear from people who got an MBA and can attest to how it helped or did not help.
Thanks for all your opinions.
just FYI: there's also MBAs in Europe, such as LBS or INSEAD, which are only 12-15 months.
what about meeting that perfect hbs woman?
I'm also pursuing an MBA, and the only reason I'm doing it is for BO to FO. The recruiting off of an MBA is going to be a good opportunity for someone looking to upgrade. If you are just going to go back to your job, then ur right, I don't see why it would be worth it. Unless it's required in your industry to move up past a certain level as it is in some, or your job was willing to pay for it. Maybe adding a certification of some sort that you can do while working would be better (e.g. CFA).
I'm a MO to FO hopeful.
The recruiting/networking is the number one thing you'll get out of an MBA. The education is very secondary, in my opinion.
The harsh truth is that in a MO/BO role you just won't have the access to a new network and most firms aren't too willing to look at the resume of a 2-4 year experienced middle/back office worker when they have stacks of MBA candidates they can also choose from (many of whom have similar MO/BO experience anyway but also now have an MBA and potentially a halfway decent internship under their belt).
The costs are high, for sure. I am at a lower ranked school due to the scholarship (I'll end up paying something like $25k all told for my MBA ignoring lost wages), but I had a somewhat developed network (from my MO work) that I leveraged into a FO summer internship. Most people in my class that wanted FO work did not get it, unfortunately. And those who did ended up at really small shops for little-to-no money doing less interesting work.
Most importantly:
If you think an MBA can help your career (and in many cases it can) it might be worthwhile for you to give it a shot. The only time I'd suggest a part-time MBA program or a certification (CFA) is if you are already in a firm you like and in a position you can see yourself in 5-10 years from now. Because a CFA or part-time MBA will not give you that new network and you'll essentially be in the same position as you were before, just with 3 letters on your resume that likely won't get most employers' attention.
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