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 -
Need help to get the best application out there for your dream Business School? Come to BizSchoolPrep Consulting. Whether you are a domestic applicant or an international one, our process is uniquely designed to understand your background, and then create a strategy whose sole aim is to get you to the business school of your dream. Know what makes us different.
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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 -
| School | 2011 Average Forgone Pay | 2011 Recommended Budget | Total 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 |
Need help to get the best application out there for your dream Business School? Come to BizSchoolPrep Consulting. Whether you are a domestic applicant or an international one, our process is uniquely designed to understand your background, and then create a strategy whose sole aim is to get you to the business school of your dream. Know what makes us different.
Like this post? +1 us and share it with your friends using any of our sharing widgets below!
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