9 MBA's Cost Over 200k: Are MBA Programs Too Expensive?

Kamchowder's picture
Rank: Gorilla | banana points 619

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.

Comments (101)

Free Consultation

We know you have questions as you prepare to apply to your target business schools. What are your chances of being admitted? How can you differentiate yourself from so many other applicants? What is the best way to showcase your accomplishments or mitigate your weaknesses? Start getting answers to all your questions by taking advantage of a free 30-minute consultation with an expert from mbaMission’s Senior Consultant team. Learn more.

Dec 31, 1969

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.

Dec 31, 1969

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.

Best Response
Dec 31, 1969
aspiringchimp:

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.


Spam Exists only to promote a product or service or is in another language besides English. Rude or abusive A reasonable person would find this content inappropriate for respectful discourse. Low Quality This content is completely unclear, incomplete, overly-broad or is not related to WSO topics, and it is unlikely to be fixed via editing.

Good catch, I did misread. Points still stand re: experience/resume/GMAT.

Dec 31, 1969

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).

Dec 31, 1969

What do you want to do with an MBA? Where do you want to do it? These questions are pretty critical in evaluating options.

Dec 31, 1969

"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?

Dec 31, 1969
nitau_gg:

"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

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?

Dec 31, 1969

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?

Dec 31, 1969
nitau_gg:

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?

I have no idea how India based PE hire MBAs but you have little chance for US based "structured" PE post-MBA role if you don't study in top US bschool (like H/S/W).

Seriously, if you career goal is those "high finance" areas like ibanking/PE, tuition is the least you should consider.

Dec 31, 1969
nitau_gg:

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?

I mean this in the nicest way possible, but you are so ridiculously mis-informed on just about everything. PE is 100 times harder to get into then general management. You can get into a good Corp 500 role from a top 15-20 school. Yet even from Harvard Business School you're not getting into PE, unless you have pre-mba experience.

Dec 31, 1969
OpsDude:
nitau_gg:

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?

I mean this in the nicest way possible, but you are so ridiculously mis-informed on just about everything. PE is 100 times harder to get into then general management. You can get into a good Corp 500 role from a top 15-20 school. Yet even from Harvard Business School you're not getting into PE, unless you have pre-mba experience.

I ALWAYS enjoyed harder things. Trust me, I've PROVED things my way even when people called me a idiot. So, I wouldn't mind at all even if I fail 2 times

Dec 31, 1969

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?

Dec 31, 1969

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

Dec 31, 1969
nitau_gg:

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

Top PE firms don't recruit from those schools and really don't even take applications from kids from those schools. That's what people are trying to tell you and you aren't hearing.

Dec 31, 1969

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?

Dec 31, 1969

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".

Dec 31, 1969

I wouldn't worry about it. You won't get into a Top 20 school anyway.

Dec 31, 1969

Sometimes being bluntly honest is the only way.

make it hard to spot the general by working like a soldier

Dec 31, 1969
Dec 31, 1969
brj:

Why would that be?

She/he has no idea about the process. Lots of well qualified Indian candidates (assuming that's where OP is from) get rejected every year. The gap is just insurmountable. Pretty sure work experience/undergrad is mediocre as well (or would know how this works).

Dec 31, 1969
abacab:
brj:

Why would that be?

She/he has no idea about the process. Lots of well qualified Indian candidates (assuming that's where OP is from) get rejected every year. The gap is just insurmountable. Pretty sure work experience/undergrad is mediocre as well (or would know how this works).

Most non-traditional candidates have no idea about the process until they start researching. My WE was phenomenal, but coming from engineering/construction, I was completely clueless. Same goes even for many of the most common non-traditionals like vets and TFAers, who didn't work alongside any post-MBA folks.

Bankers, consultants, PE-type, and others have better intuition due to early exposure to the idea of MBA, but it's a pretty easy gap to close. I agree OP has some work to do, but that's what this forum is for right? Surely, it's not just to piss in each other's cereal when rankings come out.

Finally, the challenge of standing out among a well-qualified group of international candidates is clearly not "insurmountable," as many south Asian men enroll at top MBA programs every year. You could make the case that it's incredibly difficult for white male banking analysts to set themselves apart as well.

Dec 31, 1969
abacab:

I wouldn't worry about it. You won't get into a Top 20 school anyway.

This is the STAR comment of this thread! Thank You!

Dec 31, 1969

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.

Dec 31, 1969
ebbitten:

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!

Dec 31, 1969

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.

Dec 31, 1969
TwoThrones:

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

Dec 31, 1969
handullz:
TwoThrones:

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

Thanks. Oftentimes the angriest people are those who see themselves as the biggest failures. I think the nasty responses reflect poorly on the success of those who post them and may evidence insecurity. (I think this insecurity is unfounded, but I'll get to that later...)

I have never taken out debt. I worked my way through undergrad at a state school. I worked for several years before paying cash for grad school. My choices for grad school were partially motivated by cost. I don't regret it but I'm glad they weren't a primary factor.

I get it that OP does not want to go into debt. I also get it that I have a huge bias in successful outcomes- it is not certain that OP will land in the US (or in HK) and pay off his loan. I still think that if it were me, I would be willing to take on debt for an M7 school. Tuition and scholarships are sometimes negotiable as well, and often depend on getting an admit to a better school. An admit at Booth can translate into a scholarship at Fuqua or maybe even Wharton these days. So at the very least it's worth applying and it's worth being able to say you got in even if you don't have the means to go. I'd give serious consideration to an IIM grad who was HBS or Booth material but got shut out for financial reasons. Other people might not, but the admit letter even without attending is probably worth the application fee. The finances really haven't shaken out, yet, and it's too early to make a decision until you see if you've gotten scholarship money anywhere.

The first question right now is whether HBS (or CBS or Cornell) is worth the $250 application fee. I think the answer is a resounding yes. I also think the average experienced person replying is better off than OP will be when he finishes his MBA. I think we need to stop being insecure and try to meet OP where he is and where he is trying to get to. My sense is that we are mostly A- or A students trying to help another kid get a B, not some B student helping someone else get an A+.

Dec 31, 1969
IlliniProgrammer:

My sense is that we are mostly A- or A students trying to help another kid get a B, not some B student helping someone else get an A+.

No idea what this statement means. It reads like an insult to the OP to me, but I don't think that's what was intended.

Dec 31, 1969

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

Dec 31, 1969

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 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 M7.

Dec 31, 1969
IlliniProgrammer:

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 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 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).

Dec 31, 1969

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 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).

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.

Dec 31, 1969
IlliniProgrammer:

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 don't know how they do things at the Colorado a School of Mines either, I went to UC Boulder, which is an entirely different school.

I still don't know what you meant about helping the OP and the grade reference. Maybe it was intended as an insult.

Dec 31, 1969

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.

Dec 31, 1969

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.

Dec 31, 1969

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?

Dec 31, 1969
nitau_gg:

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?

Dec 31, 1969
dew2229:
nitau_gg:

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?

Appreciated vs appreciable: It was a typo. Thanks for pointing it out

" I mean, why would you chose to leave a 7-figure job at a "top PE firm" for anything else?"

------------ There are crazy people who look for more challenging opportunities. Can't help, I'm just another idiot who is just not satisfied with 7-8 digit figure.

Dec 31, 1969

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.

Dec 31, 1969
abacab:

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!

Dec 31, 1969

People are trying to help you here. Your post mba expectations are wildly unrealistic, but every time someone points that out you insult them.

Dec 31, 1969

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.

Dec 31, 1969

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.

Dec 31, 1969

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.

Dec 31, 1969

Apologies to all, if I conveyed anything rudely. Thank you for your active participation.

Free Consultation

We know you have questions as you prepare to apply to your target business schools. What are your chances of being admitted? How can you differentiate yourself from so many other applicants? What is the best way to showcase your accomplishments or mitigate your weaknesses? Start getting answers to all your questions by taking advantage of a free 30-minute consultation with an expert from mbaMission’s Senior Consultant team. Learn more.

Dec 31, 1969

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)

Dec 31, 1969

if your 1mil buys you into an alumni network of people worth a hundred times that, i would say yes. its worth it.

Dec 31, 1969

250k? how hard are u gonna try to spendwhile youre in b school lol

Dec 31, 1969

$250K opportunity cost? That's insane.

Dec 31, 1969

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/yourmon...

Life, liberty, and the happiness of pursuit.

Dec 31, 1969
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/yourmon...

or a two year redo of the studying that you may not have done in college because you were busy partying your ass off.

Dec 31, 1969

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.

Dec 31, 1969

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).

Dec 31, 1969

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...

Dec 31, 1969

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).

Dec 31, 1969

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

Dec 31, 1969

costs of an mba are relatively easy to quantify, benefits are essentially impossible to estimate.

Dec 31, 1969

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.

Dec 31, 1969
ibleedexcel:

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.

Dec 31, 1969

If I have much more free time from going to b school, I think I'll spend a lot more.

Dec 31, 1969

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?

Dec 31, 1969

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...

Dec 31, 1969

Vancouver, how did you manage to swing a $55K sign-on bonus ?

Dec 31, 1969

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...

Dec 31, 1969

Of course it is worth the cost! Look at what yahoo says:

Potential Careers: Depending on your concentration, an MBA degree could prepare you to pursue a wide range of management-track careers in the corporate world, including financial analyst, marketing manager, and database administrator.*

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...

Dec 31, 1969
Dec 31, 1969

bschool, what a fucking scam lol

Dec 31, 1969

Return in investment. MBA grads have a higher salary and programs can charge more for the education.

Masters in Finance HQ - The #1 site for everything related to the MSF degree!
MSFHQ

Dec 31, 1969

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.

"Elections are a futures market for stolen property"

Dec 31, 1969

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.

Dec 31, 1969
Peter_27:

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.

Dec 31, 1969

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.

Dec 31, 1969
junkbondswap:

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

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so."
- Ronald Reagan

Dec 31, 1969

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.

Dec 31, 1969

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/compensat...
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.

Dec 31, 1969

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-new...'s MBA is highly ranked by the FT too

Dec 31, 1969
Dec 31, 1969
jmcfadden:

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.

Dec 31, 1969

$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).

Dec 31, 1969

very very very few people are pulling in 350k, that's ridiculous

Dec 31, 1969

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.

Dec 31, 1969
sjv1030:

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.

Dec 31, 1969

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.

Masters in Finance HQ - The #1 site for everything related to the MSF degree!
MSFHQ

Dec 31, 1969

just FYI: there's also MBAs in Europe, such as LBS or INSEAD, which are only 12-15 months.

Dec 31, 1969

what about meeting that perfect hbs woman?

Dec 31, 1969

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).

Dec 31, 1969

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.

Dec 31, 1969

1-Click to Unlock All Comments - 100% FREE

Why do I need to be signed in?
WSO is a knowledge-sharing community that depends on everyone being able to pitch in when they know something.
+ Bonus: 6 Free Financial Modeling Lessons with 1-Click Signup ($199 value)

Get busy living

Dec 31, 1969

Do what you want not what you can!