I’m a HS junior, but I’m applying to colleges next year and I was thinking about my life after college. Since I plan on doing Business/Finance in college, I want to pair it with an MBA. Then I researched and found out that an MBA costs 150-200k for the 2 years (from Harvard, Chicago, Wharton). I’m fairly sure my parents will not contribute any $ towards it, as I will be a 27-29 year old man. So is the degree worth it, both time and money wise?
Not only does it cost that much, but to give up two years of earnings while you are in school. Personally, I’d consider getting a BBA from a highly regarded school if you can. See where it takes you after graduation. At a minimum, you would likely have pretty strong earnings in those few years you work after undergrad. And you may decide you don’t need the MBA.
Business schools charge what the market will bear.
The average compound annual growth rate for undergraduate private schools since 1995 has been roughly 5-6%. This is similar to the annual growth rate of most MBA programs, so tuition increases across the board have definitely risen rapidly past inflation. Also roughly a third of those costs that the schools present you include living costs which can vary depending on your situation (on vs off campus and your daily purchases).
There are a lot of market forces that lead to increased tuition prices such as:
- an increased demand due to a larger supply of competitive candidates which is due to improved education, test scores, and influx of international candidates due to improved economic and educational standards abroad
- increased demand from professional firms for top talent as you could argue that there is greater competition amongst those firms than there were 20-30 years ago (wall street has seen a brain drain in recent generations, tech companies competing heavily for talent as product development and their monetary impact change much more rapidly, etc.)
- the brain drain of rural areas has led younger generations to flock to metropolitan areas where many top institutions and companies are. that also increases real estate and costs of living which factors into the MBA cost estimates
I don’t know of any schools that share the salary profiles of entering classes but since the average age of most MBA students is around 27/28 with 4-5 years of work experience at top firms, you could assume an average base salary of $100k. The schools do show median and mean salaries of graduating classes so stanford’s class of 2015 has a 133k mean and 130k median. MBA grads at top institutions likely do see an increase in pay over their previously held position but of course they gave up two years to achieve that, so was the opportunity cost worth it?
It depends. It depends on your goals, your industry, your company, and where you are professionally.
I met a number of employees at MBB consulting firms for example who entered as MBA Associates where they are enter lower than their years of experience warrants but the firms have expedited promotional tracks for them based on performance. While the $133k figure of stanford’s class might not seem worth it, you also have to keep in mind how quickly those graduates will be promoted, increase their salary, and the opportunities that will open for them down the line beyond those years after graduation.
Also, consider looking into schools that have a STEM MBA program. It’s only an extra year and can cost nearly nothing if you can get a scholarship to cover it. Many of my friends at Alabama, which is a pretty good business school, are doing that right now.
YES! Absolutely worth the investment at a Top 10 school. It’s not just about the 6-figure salary, it’s also about the ability to transition to an appropriate field you may be having trouble breaking into…for example, management consulting, investment banking, product management, brand management etc. There are many roles which almost require an MBA to get hired into them. The summer internship is key to switching careers.
Not everyone pays full price of $180 - $200K for the degree either…many people get at least partial scholarships to help offset the costs, even at the big name schools, or they are sponsored by their consulting firms (MBBD will pay for it if you return). It’s two great years to explore, reset if you need to and advance your professional career. A lot of people also treat it as a “last hoorah” before settling down.
Once you get into the professional world, you can make the decision for yourself if it is something you truly need. You’ll have a better sense of this at around age 25 - 27 if you feel that you are not getting to where you want to be and can then pursue it. Definitely get work experience though prior as it makes it a more valuable experience.
Was one of the best decisions I made.
Business schools are often profitable arms of universities. Also, they can afford to charge high tuitions because nearly everyone who attends have accumulated savings from a few years of work and won’t have to give out much financial aid.
The vast majority of people aren’t going to get into Wharton, Harvard or Chicago anyway. There are alternatives to a full-time MBA program, specifically Executive MBA and part-time traditional MBA programs, where you’ll go to class either on a weeknight or on weekends while holding down a full-time job.
Some of your best Exec and part-time MBA programs are offered by top public universities that are usually more reasonably priced than the typically more expensive private universities. Berkeley, Michigan, UCLA and North Carolina all offer Exec MBA programs that are in the top ten nationally.
Those who play their cards right may not have to pay much or even anything for their MBA. There are a lot of employers who will pick up most or all of the tab for an Exec or part-time program for an excellent employee who’s been with them for several years.
Of course, they may require the employee to sign a contract agreeing to stay with the company for a specific period of time after completing the program, and the employee may need to earn a certain minimum grade. But that beats paying major bucks out of your own pocket and losing two years of income by taking a full-time MBA course, which you’d most likely have to do because a lot of employers won’t foot the bill for a full-time MBA program that’s going to take you away from their company for two years.
Ask and ye shall receive! {To be clear, this data is for the MBA class of 2010, hence the “2014 salary” is for people who had graduated from their MBA classes 4 years previously).
Here’s another method. Enter a Business PhD program and get paid/u to obtain your MBA.
*Q. Can I get an MBA degree while attending the PhD Program?
A.Yes. If you take all the required courses for the MBA, you may receive the degree after you successfully propose your dissertation. *
Since you asked about HBS, it should be noted that HBS is remarkably generous with its need-based financial aid.
HBS Fellowships are awarded based on financial need. Your academic or professional performance/merit are not used in financial aid decisions. Nearly 50% of the class receives an average of approximately $35,000 per year in need-based HBS Fellowships.
http://www.hbs.edu/mba/financial-aid/domestic-students/Pages/need-based-fellowships.aspx
Most MBA programs post the starting salaries of their most recent graduating class. Harvard MBAs start at a median $130,000 base salary, with a median of $25,000 signing bonus (65% receive a bonus). Most go into finance, consulting, or tech. Wharton MBA graduates start at a median $125,000 base salary, with a median $25,000 signing bonus (63% receive a signing bonus). Chicago Booth (which has by far the most comprehensive data) boasts a $125,000 median base salary with a median signing bonus of $25-40,000, depending on the industry (consulting on the low end; finance on the high end).
Of course salaries vary by the industry that you go in - most schools, especially Chicago Booth, have good data on that. (Median salaries ranged really from $100K in analytics/data science to $140K in consulting.) But generally speaking, an MBA from a top school can reasonably expect a six-figure salary upon graduation. Keep in mind that that is just starting salary, too; your salary will rise over the course of your career, and you’ll get bigger raises if you change jobs or get promoted. It’s not out of this world for MBA graduates of top schools to expect to make $200K in a relatively short period of time.
So basically, if you can borrow $150K for a TOP MBA program, you should be able to relatively comfortably repay those loans over the course of 10-20 years, and still come out on top because of the rise in your income level.
But let’s take a place like American University in DC. The median starting salary out of their MBA program is $71,000 a year (and only 75% had a job offer within 3 months of graduation, compared to the 97%+ numbers at the top schools). But two years at American will probably cost you around $130K. Or the University of San Diego, whose median starting salary is around $72,000 a year (and the range is only $50-100K) but the estimated total cost of attendance is around $120K. You’re virtually guaranteed to not be able to repay that debt.
This may be harder than it sounds. I was told the same thing in a similar professional degree program - I was earning a PhD in public health and told I could, theoretically, pick up an MPH along the way. In practice, often the professional degree program requires many more courses in a different sequence than the doctoral degree, and in a doctoral degree program your focus is on research and scholarship. Your advisor also may not let you take some of the classes you need to get the MBA because they want you to do research or do an independent study or something else. Sometimes it’s ultimately your choice and other times your advisor can really block you from taking it because you need his sign off for extra courses.
I wouldn’t recommend going to a PhD program if your goal is a master’s degree, especially a professional master’s, for these and other reasons.
However, it IS really cool that HBS offers fellowships. I didn’t realize that they did!
Who better understands pricing power? It is simply supply and demand. They are expensive because enough people are willing to pay…
Yes, an MBA is worth it. The first analysis you need to do is SWOT (strengths, weakness, opportunities, and threats) on yourself and identify your end goal. If you want the Wall Street/Big Consulting Firm life, that is one path. If you want top income in a different locale, it could be a different path. There are other MBA programs and timelines that will give you access to the higher earnings without all the debt.
How are you going to be 27-29? Are you planning on working for a while then going back for an MBA or going straight after undergrad?
Obviously the rationale would be to save money. While one might arguably recommend against attending a PhD program if your goal is a professional master’s, on the other hand, I would counter that by saying that I (and surely many other people) would recommend against taking on $150-200k of debt, which is quite the weighty albatross to have hanging around your neck for the next couple of decades. Yet if you want that degree, sometimes you have to take the ‘least un-recommended’ pathway.
An MBA is for someone who wants to work in business. A PhD is for someone who wants to do research about business. The latter is quite different and is not a cheaper path to the same destination, at least not at the top schools.
If you are considering both, understand the requirements of each degree and the placement history before you start.
Perhaps PhD business programs weren’t intended to be a cheaper pathway to the same destination, relative to the MBA. But the fact remains that for a not insignificant share of students, PhD programs are such a pathway. This is true even at the top schools, or perhaps even especially at those schools. For example, I would guesstimate that at least 25% of the doctoral graduates from HBS go directly to industry, usually at the very same consulting/finance firms targeted by the HBS MBA students - and they do so without incurring nosebleed debt (or, indeed, any debt at all).
Never get an MBA right after college… Get a job first. Another reason the programs are high cost is because many many students get funding for their program from their employer and they do it part-time. The MBA programs are cash cows for the universities. Agree with the statement that they will charge what the market will bear.
The OP is a high school junior, so graduate studies are certainly premature. But on the MBA/PhD differentiation, one program is 2 years, the other 5. A business savvy type could work out the economics of 5 years of stipend vs. 3 years in industry/tuition. There is undeniably going to be overlap in content in both programs but they are designed for students seeking different outcomes.