Return on Investment of Selected MBA Programs




Introduction

Over the last 30 years, the cost of attending college has doubled relative to income. The average real cost of college tuition has increased 132%, while real individual wage has grown just 30% in the same period. Undergraduate educations are rapidly decreasing in real value, and student debt is piling up. Is graduate school any different? What’s the value of a graduate business degree in today’s economic environment? In this article, we examine the value of several top MBAs, a degree supposedly synonymous with higher incomes, to see if it is still worth it.

Abstract

The purpose of this piece is to provide a quantifiable framework with which to assess the pros and cons of entering grad school for a typical MBA applicant. Degrees are compared against “DC” (or “baseline”), a generic consulting career in the Washington DC region around the 4-6 year mark, considered representative of a likely MBA candidate. The degree represents a substantial investment that can take years to pay off. The chosen career after graduation can have a massive impact on future debt. A career that currently pays close to $100,000 coupled with a low to moderate risk savings investment can be a strong and substantially less risky alternative.

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