In its most recent Application Trends Survey, the Graduate Management Admission Council (GMAC) reported that application volume at graduate management education programs dipped by 3.4% between 2021 and 2022. This may lead some to question their confidence in their return on investment (ROI) for an MBA degree.
However, a 2022 GMAC survey reported that 74% of candidates of two-year, full-time MBA programs said they expect their degree to increase their employability, and 72% believe their degree will increase their earnings power.
In June 2023, U.S. News & World Report highlighted 28 MBA programs whose ROI averaged 210% or more. It calculated graduates’ salary-to-debt ratio by dividing the average salary and signing bonus within three months of graduation by the average student debt from the program, and the list included schools with a ratio of 2.2-to-1 or higher. One was Indiana Kelley, whose Class of 2022 graduates reported an average salary and bonus of $161,693 while taking on debt of $53,265 to attend the program. However, some of the best ROI values did not come from the highest ranked MBA programs—for example, the University of Connecticut was included in this list but was ranked 93rd in the most recent U.S. News Best Business Schools ranking. And with a salary-to-debt ratio of over 7-to-1, both CUNY Bernard M. Baruch College’s Zicklin School of Business (ranked 49th by U.S. News) and Arizona State University’s W.P. Carey School of Business (ranked 35th) were among the MBA programs with the highest ROI on this list.
When considering the investment you will make in an MBA program and the potential return you’ll receive, here are several points to keep in mind:
1. Compare sticker price versus actual price.
The thought of paying roughly $200K for a business degree can make anyone a little weak in the knees, but remember that many applicants receive scholarships. For example, in the most recent admissions cycle, our Stratus clients received more than $11M in scholarship offers. Depending on the strength of their application, some students receive scholarships ranging from $5K to $10K all the way up to full tuition. And even though full scholarships are rare, a $50K discount on your MBA degree will still greatly improve your ROI.
2. Consider programs that could yield zero debt.
Although some people will only consider the highest ranked programs, we encourage our clients to understand how a broader application strategy can boost their ROI. ROI goes sky high when you have no debt! You also have greater leverage if you receive several attractive offers. We have helped many clients increase the scholarship award from their top-choice program based on the other scholarships they received from similarly ranked MBA programs.
3. Remember that your ROI also includes your ability to solve difficult problems.
During a recent panel discussion of MBA deans hosted by the Association of International Graduate Admissions Consultants (AIGAC), Dartmouth Tuck’s dean, Matthew Slaughter, noted that the power of an MBA to help solve difficult problems has never been stronger. It’s important to realize that the robust education you receive at your best-fit MBA program can pay lifelong dividends in having a career of substance.
There are multiple ways to consider ROI, and applicants should stay true to their own values when contemplating the overall value of an MBA. Our Stratus admissions counselors can help you review your situation when you reach out for a free consultation.