In general, Master of Business Administration (MBA) degrees are considered a worthy investment—specifically for people who are pursuing a career in business
Along with the potential financial benefits, many corporate recruiters consider an MBA degree an asset because of the skills degree holders commonly possess. Additionally, participating in an MBA program can set you up with lucrative networking opportunities and business contacts via your school’s career placement programs, your classmates, and your program faculty.
That being said, there are some factors that make some MBA programs more worth the investment than others. Here, we’ll break down how you can assess your cost/benefit analysis to determine whether getting your MBA can offer the return on investment you’re looking for.
According to a 2021 survey of corporate recruiters, the Graduate Management Admissions Council (GMAC) projected that MBA graduates would earn a median annual salary of $115,000 in 2021. Non-MBA degree holders were projected to earn much less: $75,000 for direct-from-industry hires, and $65,000 for bachelor’s degree holders .
Despite a dip in hiring and starting salaries during the earlier part of the global pandemic, MBA salaries are recovering, returning to pre-pandemic trajectories, according to the survey. Additionally, hiring projections remain strong. Ninety-four percent of US-based recruiters surveyed expected to hire MBA graduates in 2021 .
Your anticipated post-MBA starting salary can fluctuate based on factors such as industry, location, years of experience, and school attended.
Learn more about MBA salaries to better understand your earning potential.
Beyond financial benefits, having an MBA can be a valuable credential to add to your resume, signaling a certain skill set that many hiring managers look for in employees. Additionally, MBA programs offer unique career and networking resources reserved for students and space for building beneficial long-term relationships.
Because of the rigorous coursework typical of many MBA programs, employers often recognize a common set of transferable skills that graduates acquire through their higher education experience.
According to GMAC, the top valued skills of MBA graduates include :
To many employers, an MBA degree is essentially a credential validating that you possess these desired skills and can help showcase that you are prepared to succeed in higher-level business positions.
MBA faculty and staff are invested in the future success of their students—your success will hopefully help attract future students with similar potential to succeed, whether that’s through positive employment reports and marketing materials or reflected in their program ranking. As such, many programs incorporate career resources and networking opportunities into their offerings.
These services, such as on-campus recruitment fairs or executive coaching, can help lead to more lucrative career options. Similarly, MBA programs with strong alumni networks may offer direct points of contact within companies hiring around the world.
According to a 2021 GMAC survey, 67 percent of graduate business school alumni felt that their program offered opportunities for quicker career advancement, and 76 percent agreed that their program developed their professional network .
There’s also value in the relationships you can build while pursuing your MBA. Seventy-two percent of alumni felt that their program improved their situation .
Many MBA admissions offices seek to populate incoming classes with a diverse group of students who can offer a range of business perspectives. To capture that co-learning opportunity, many programs will incorporate group projects into the curriculum alongside discussion-based classes, and some students may also choose to engage in study groups or extracurricular activities.
Alongside the benefits of getting an MBA degree, you should consider some notable costs. Namely, getting your MBA degree will require time, money, and energy. Whether the benefits outweigh those costs will largely depend on your individual situation and career goals.
How long it takes you to get your MBA will depend on the type of program you enroll in. A traditional full-time MBA program will usually take about two years to complete, though attending part-time can increase and accelerated options can decrease your time commitment. Some programs also allow flexibility for students to work full-time while taking classes outside of normal business hours.
Learn more about how long it takes to get an MBA.
MBA tuition can range from tens of thousands of dollars to over $200,000, depending on the program you attend. According to a BusinessBecause report, the average tuition at top US MBA programs in 2021 is $148,978 .
A degree can be a sizable investment, and many students turn to savings, scholarships, employer sponsorship, and loans to help ease the financial commitment.
Learn more about how to pay for graduate school.
A 2018 report from TopMBA.com calculates that the average payback time for an MBA in North America is 55 months, or just over four-and-a-half years. “Payback time” includes tuition plus forgone salary, for students who took time off from work while pursuing their degree .
Do more expensive programs lead to better paying jobs?
The higher-cost programs tend to be ranked highly on popular lists such as US News & World Report, Fortune, and Bloomberg, and those highly ranked programs tend to lead to some of the highest post-degree salaries.
However, it’s worth noting that students who attend high-tuition programs may end up with low-paying jobs, and students who attend low-tuition programs may end up with high-paying jobs.
The good news is this: regardless of the program cost, MBA programs tend to have a favorable debt-to-income ratio—meaning students who take out federal loans to help finance their MBA degree tend to earn more money within two years of graduation than they initially borrowed.
One way to understand whether an MBA degree will be financially worth it for you is to calculate your return on investment (ROI). This is essentially a comparison of your long-term potential gains to your short-term investment costs. Keep in mind that this calculation only deals with the financial benefits of an MBA, as you can’t put a price on the educational and relational benefits of the degree.
An ROI calculator, such as this one from MBA.com, can help you estimate your post-MBA earnings potential.
Is an online MBA worth it?
If you are looking for a more flexible way to pursue your MBA, you may be interested in an online program. Online MBAs offer the same education as their in-person counterparts, but allow you to learn from anywhere with an internet connection. Oftentimes, online MBAs are also less expensive than on-campus options. Learn more about whether online MBAs are worth the investment.
An MBA is generally considered a worthy investment for most people with a career in business, however, people pursue this level of education at different points in their careers. For this reason, there is no standard “right” time to pursue an MBA—only the right time for you, and that’s when an MBA will be most worth it.
To decide whether an MBA might be worth pursuing, consider your current position and your growth path toward your goals. How can an MBA change that path? How do those potential changes feel? If they feel motivating and exciting, you might want to think about what it would take to start working toward your MBA.
If now feels like the right time to continue your business education, consider the iMBA from the University of Illinois Gies College of Business. This competitively ranked program offers you the flexibility to learn from anywhere with an internet connection at a breakthrough price.
1. Graduate Management Admission Council. “Demand of Graduate Management Talent: 2021 Hiring Projections and Salary Trends, https://www.gmac.com/-/media/files/gmac/research/employment-outlook/2021_crs-demand-of-gm-talent.pdf.” Accessed December 15, 2021.
2. Graduate Management Admission Council. “Alumni Perspectives on the Value of Graduate Management Education, https://www.gmac.com/-/media/files/gmac/research/measuring-program-roi/2021_gmac_research_brief_alumni_value_of_gme.pdf.” Accessed December 15, 2021.
3. BusinessBecause. “Cost of MBA Report 2021, https://www.businessbecause.com/resources/resources-guides/cost_of_mba_report_2021.” Accessed December 15, 2021.
4. QS TopMBA.com. “Return on Investment Report: Full-Time MBA 2018, https://pages.business.illinois.edu/mba/wp-content/uploads/sites/78/2018/10/qs_mba_roi_report_2018_v2.pdf.” Accessed December 15, 2021.
This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.