Are MBA degrees in the USA worth the cost?
Are MBA Degrees In The USA Worth The Cost?
Earning a MBA degrees can be worthwhile by helping professionals enhance their career opportunities, receive increased compensation, shift industries, and job promotions. Additionally, An MBA can also equip you with the skills and knowledge necessary to start a new. Tuition fees exceeding $100,000 is a substantial expense for recent graduates the foregone opportunity cost of staying out of the workforce and employment is also something working professionals have to consider while making a decision. The question becomes, is earning an MBA worth the cost? Business and become entrepreneurs and leaders that are driving significant changes in the society. But one just cannot blatantly ignore the cost of getting an MBA from a top business school.
According to a 2018 GMAC survey, applications to MBA degree programs in the United States dropped by 7% in 2017, with 70% of full-time MBA programs reporting some level of decline. This trend began around 2014, and now even elite programs — including Stanford, Harvard, and UPenn – are feeling the effects.
One way to evaluate the short-term financial benefits of an MBA is to compare the average salary among a business school’s recent grads with the average student loan debt. Among the ranked business schools in the U.S. News Best Business Schools rankings that provided salary figures, the average starting salary among 2018 grads from full-time MBA programs was $87,683. Meanwhile, the average debt burden among 2018 grads of full-time MBA programs at the ranked B-schools that self-reported their student debt statistics was $51,671. At the schools that provided both debt and salary figures, the average salary for MBA grads was $86,253.72, which is 167% higher than the average debt burden at those schools.
A 2018 report on the financial return on investment for an MBA, published by QS Quacquarelli Symonds – a higher education data, consulting and research company – reveals the potential long-term profit from an MBA. According to the report, within 10 years of earning an MBA degree, the average MBA grad from either a U.S. business school had an estimated decade-long return on investment of $390,751, even after subtracting the tuition and opportunity costs of attending an MBA degree program.
The popularity of one year MBA format in Europe is giving tough competition to the traditional two year US MBA format. The gains of the one-year MBA, from a reputed b-school, has been known to be an impressive 60-70% raise in salary. MS programs, with concentrations on various business specializations, are also in demand. Candidates who are aware
of their specialized interests like business analytics, information systems, finance now have the option of choosing a cheaper MS in Finance, Accounting and Management, frequently from the same prestigious business schools, also sharing the same faculty. In fact, according to the GMAC Recruiter Survey among 900 plus employers, in 2017, the demand for Master in Management graduates has gone up from 41%, in 2012, to 59%, in 2017. That for Master in Accounting, the same period has witnessed an increasing demand from 35% to 42%, while Master of Finance graduates can expect calls from 48% recruiters, in 2017, over 43% back in 2012.
If you are seeking an international degree, a global network is probably a feature that you hold dear. Considering this aspect, European MBA programs offer greater diversity with 80-90% of their cohort being comprised of international students. So if you are seeking a truly global environment in your MBA classroom, European MBA programs might be ideal for you.
Tuition at the top business schools in the US is over US$120,000: Harvard Business School (24-month program); Stanford (24 months); The Wharton School (21 months). Other b-schools in the US will be slightly cheaper, including Kelley School of Business which costs around $51,182 for Indiana residents or $74,084 for non-residents/international students per year. By comparison, Europe’s plentiful MBA courses may offer more value for money thanks to the course length. In India, the cost of acquiring an MBA degree is comparatively less than overseas. Several Indian institutions boast collaborations with international universities, allowing MBA students to earn a high-quality education at home. The Indian Institute of Management (IIM) in Ahmedabad is ranked seventh in the QS Global MBA Rankings 2018: Asia, ustralia & New Zealand. The 22-month program costs between US$20,000 and $30,000, with an average salary three months after graduation of US$44,457.
Post-Graduation Risks for International Students
Obtaining a long-term work permit in the USA after graduating from the MBA is a major concern for international students. General MBA programs in the USA offers a 12-month post-graduation OPT as they do not qualify for the STEM classification and hence international students miss out on the extended 36 months of OPT which gives them more chances of obtaining H1-B visa which is granted through a random lottery. Considering the gigantic investment that most international students have to make to pursue their MBA, the fact that most MBA graduates may have to come back after working for only 12 months with OPT work permit, leaving them a huge burden of debt is a nerve-wracking thought.
Keeping this fact in mind, potential employers who hire a lot of international students who are Master graduates are showing increased reluctance to hire international MBA graduates. The risk of losing key employees after just one year is not worth the time and money invested during the hiring process for most employers.
So, is an American MBA still right for you?
You need to have a clear understanding of why you want to pursue an MBA. If your motivation is driven from simply landing a higher paid job, consider the associated risks. Unless your measure of an MBA RoI is evaluated with the eagerness to understand business tactics, external factors like economic turmoil can throw your cause into concern.
If all things are considered, the answer is a “Yes!”. USA is still the reigning leader of MBAs. The rising fame of worldwide elite MBA programs are only inspiring the reputed US MBA
programs to excel and stay in the game. And that’s a good thing. But its true worthiness is finally a matter of a match between the merit of a good MBA program and your readiness to pursue it.
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