Nov 24, 2011

How much does an MBA cost in top tier business schools? Let the $ speak!

by Poets & Quants

The bottom line first: What an MBA now spends to get the degree has increased more than four times the starting compensation in the past ten years. It’s yet another look at the diminishing returns of the degree. It’s not merely costs that has far outpaced the rise in inflation. It’s also a stagnant economy that has kept both pre-MBA and post-MBA compensation down.

So how much does an MBA cost, inclusive of everything?

Over $300K! The highest total cost is for an MBA from Stanford Graduate School of Business where students are typically leaving jobs that already pay them more than $88,000 a year. If you tack two years of forgone earnings to the school’s recommended two-year budget of $174,162 for a Stanford student, the total cost of getting an MBA is now a whopping $351,662. Stanford is hardly alone. There are eight U.S. schools where the cost of getting an MBA now exceeds $300,000.


One reason why the costs have escalated so much is because the pre-MBA salaries of many students are already quite high. In some cases, the “average” figures (reported in an accompanying table to this story) are even below the median numbers reported by the schools. The numbers were recently reported to Bloomberg BusinessWeek by many of the top business schools, along with the budget schools recommended to students who attend their MBA programs. The budget includes tuition, required fees, books and case study materials, as well as room and board. In some cases, schools declined to provide data on the forgone pay of their latest students.

To calculate the total cost of getting an MBA, P&Q multiplied the annual forgone pay by two to account for the opportunity cost of being out of work for two years. We then added that total to the school’s recommended two-year budget which includes tuition, required fees, as well as room and board. In all cases, these are conservative estimates. They assume no increase in the recommended budget for the second year of business school, and most observers believe these recommended numbers are 10% to 20% below what a typical MBA will spend in a two-year program. We used recommended budgets for non-residents at public universities where tuition may be slightly lower for residents.

Here is the list -

School2011 Average Forgone Pay2011 Recommended BudgetTotal Cost Of Getting An MBA
Harvard Business School$90,400*$168,000$348,800
Stanford GSB$88,750*$174,162$351,662
Pennsylvania (Wharton)$74,000*$178,400$326,400
Dartmouth (Tuck)$74,000*$168,100$316,200
MIT (Sloan)$74,000*$165,264$313,264
Northwestern (Kellogg)$73,960$162,458$310,378
Columbia Business School$73,425*$175,740$322,590
Chicago (Booth)$72,320*$170,976$315,608
USC (Marshall)$67,000$159,600$293,600
UC-Berkeley (Haas)$66,345$156,244$288,934
NYU (Stern)$65,972$165,340$297,284
Texas-Austin (McCombs)$65,033$134,280$264,346
Virginia (Darden)$64,325*$151,000$279,650
Duke (Fuqua)$64.087$143,718$271,892
UNC (Kenan-Flagler)$63,850*$145,656$273,356
Cornell (Johnson)$63,640*$147,320$274,600
Yale School of Management$63,126$157,790$277,790
Michigan (Ross)$62,000$147,448$271,448
UCLA (Anderson)$59,144$153,174$271,462
Carnegie Mellon (Tepper)$58,200$154,000$270,400
Wisconsin-Madison$54,653$86,074$195,380
Georgetown (McDonough)$52,618$148,880$254,116
Vanderbilt (Owen)$48,338$175,608$272,284
Indiana (Kelley)$46,189$126,080$218,458

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