MBA programs, especially those from the Ivy League Schools, are viewed as a valuable asset for a young professional’s career.
However, the benefits of getting an MBA is starting to fall due to the rising tuition costs. For aspiring MBA students, making a cost-benefit analysis is an excellent place to start before making your decision.
The Master’s Degree in Business Administration or MBA is a sought-after degree in business. Schools that offer this program give their students lessons about several aspects of running a business and making it successful.
If you’re an aspiring business owner or want to get a job at a prestigious company, an MBA can give you a bigger chance to achieve these goals.
But MBAs are also universally known for being astronomically expensive. According to CNBC, MBA graduates from the best business schools would often rake up at least $100,000 in student debt.
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If such debt is almost a requirement to get an MBA degree, is it worth it? When can you consider an MBA as a beneficial investment, and when is it not?
The Cost of MBA Programs from Ivy League Schools
Ivy League schools are known for their slim admission chances and expensive tuition. These programs teach different business principles for the lucky few who are accepted.
Skills and experiences learned during the program can provide benefits that pay dividends for business professionals.
According to GMAT, the cost of getting an MBA heavily depends on the school where you’re taking it and whether you avail student loan for it.
Out of all the Ivy League schools, only Princeton University doesn’t offer an MBA program. Here are the average prices for a full-term MBA in seven Ivy League schools.
- Columbia Business School – $228,438
- Johnson College of Business – $199,250
- IE Business School Executive MBA – $135,000
- Harvard Business School – $225,204
- Dartmouth Tuck MBA – $224,000
- Wharton School Of Business – $223,2390
- Yale University SoM – $211,600
Students who don’t have enough financial resources can take advantage of various scholarships offered by different schools.
You can also seek financial aid using your merit if the school supports it. For example, Harvard offers need-based scholarships for an average of $84,000 each year. Wharton School of Business also provides military benefits for veterans.
There’s Always the Unlucky Ones
Unfortunately, some students will not qualify for the need-based programs and other school-offered incentives.
Unqualified students who cannot apply for financial aid will have to seek help from other means. They can also reduce the cost of an MBA by doing it part-time or find a job inside the campus.
If push comes to shove, you can apply for an MBA student loan to make repayment a lot more manageable later on.
According to CNBC, the average amount of student loans from MBA programs is about $66,300 from 2016 to 2017. Ivy League schools might need a bit more of that due to higher tuition fees.
You can always set up a loan repayment strategy that will work for you until you’ve finally reached the MBA’s financial benefits.
Most MBA student loans are usually paid with a ten-year repayment plan. Before applying for another student plan, make sure that you can handle paying it with your undergrad debt, as well.
Why Young Professionals Are Flocking to MBA Programs?
Successfully acquiring an MBA is a challenging feat in itself. That’s why employers and business people see a lot of value in it.
Most student who finished their MBAs considers it “worth it” due to acquired technical and social skills that can help them further their careers. Attending an MBA class is also an excellent chance to build your network with your classmates.
MBA classes can also teach business leadership and awareness of how the global market works. If you plan to create a business in the future, you might need this knowledge for greater expansion.
Since this program is a generalist course, you can also learn more about the different industries that affect a business.
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But the best incentive for young professionals to finish an MBA program is the salary incentive. MBA graduates are likely to get more job prospects than their bachelor’s degree counterparts.
Student Loan Hero reports that companies and establishments offer $105,000 of median base salary for recent MBA graduates. Meanwhile, people with bachelor’s degrees have a median salary of $65,000.
Finally, most top companies in their industry usually hire MBAs to work with them. Hence, an MBA degree can give you a boost when finding a job in the competitive market.
Some Fortune 500 companies like Microsoft and Google even put billions on the table for hiring recent MBA graduates, especially those from Ivy League schools.
The MBA-ROI: Are MBA Programs Really Worth It?
According to GMAC’s research, 96% of MBAs who graduated in 2018 are very satisfied with the after-school value of their degree.
Additionally, when asked if they would take the graduate degree all over again, the answer of 90% of alumni is a resounding “yes.” Hence, it can be concluded that MBAs consider their degree as a good investment.
The benefits mentioned in the previous section are significant enough for some aspiring MBA graduates to justify getting a loan to get the degree. However, the amount of debt after graduation is also substantial.
MBA student loans can affect someone’s finances in the long term. Its payments are expected to be included in someone’s finances for at least ten years.
Having an MBA under your name is always an excellent addition to your resume. However, this doesn’t mean that you have will automatically get your dream job.
There is still no employment certainty, even if you have an MBA from a prestigious school. A hiring manager would likely recruit someone who has extensive experience in the field.
Is there still a “return on investment” in getting an MBA? The short answer is: it depends. Not all MBA graduates experience the same success or failure just by having an MBA degree.
Meanwhile, some innovative people grasp their successes without an MBA. However, there are certain situations wherein an MBA is worth taking.
When Is An MBA Worth The Debt?
MBAs are still one of the most valuable graduate programs all around the world. However, there are MBA alternatives that focus on more specific careers.
The includes certifications like:
- Master of Finance
- Chartered Financial Analyst
- Financial Risk Manager
All of these options are cheaper and take a shorter amount of time. Only get an MBA if the following factors apply to you.
If You Can Get It From Ivy League Schools
Ivy League schools are still some of the best educators all around the world. But the real benefit of attending an MBA on these educational institutions is the chance of growing your network.
Most MBA students that attend an Ivy League school are usually high-performing students. The experience can open up more doors for your career enrichment.
If You’re Eyeing a Managerial Role
A manager needs to be a jack of all trades. Since you’re eyeing managerial roles (like being a CEO, supply-chain management, etc).
An MBA is like the ultimate Swiss Army knife that helps you get started in learning the ins and outs of an industry.
If You’re Planning to Build Your Own Company
Along with networking, aspiring entrepreneurs will also get the benefits of learning proper leadership strategies and communication. These two skills are crucial to the success of a company.
Image credit: [KAROLINA GRABOWSKA]