One of the things drawing many business people to graduate business programs is the prospect of a much higher MBA starting salary than would be permitted with a bachelor’s degree alone. There are many stories that tout the salary benefits of a graduate degree in this field, often highlighting graduates who move into a six-figure management job within the first six months after completion of their respective programs. Despite these stories, prospective and current students need to determine whether or not stories like these are exceptions to the rule or a reasonable expectation. This makes it easier to assess the ROI of a graduate business program at today’s best-ranked colleges and universities.
A Significant Raise for Most Recent Business Graduates
According to a study recently published in the Journal of Education for Business, students who pursue a Master of Business Administration degree can expect their current salary to increase by about 50 percent by the time they complete their degree program and receive their degree. The study notes that, for example, many students earning approximately $50,000 per year at the time of program enrollment ended up earning about $75,000 per year by the time they received their degree. Considering most degrees take just two years to complete, this is a substantial raise that will definitely benefit the average graduate business student.
One other thing to consider is the five-year salary implications of pursuing this degree. The same study notes that most graduates end up nearly doubling their pre-MBA salary at the five-year mark after graduation. On average, graduates were earning 80 percent more during this time period than they were before they enrolled in their first graduate-level course. Again, given that this is a mere five years after graduation, the increase in salary is substantial.
Beyond Salary: Other Financial Data to Consider
Salary is not the only way to determine whether or not it’s worth pursuing a graduate business degree. There are a few other metrics in play for students who are considering furthering their education in one of these competitive programs. First and foremost, students need to consider the overall ROI of their program: Will they get a good return on their tuition investment, and how long will it take? The more affordable the program, the better its theoretical ROI. Students must, however, be sure to find the best combination of program cost and program prestige in order to maximize this metric.
Another thing to consider is whether or not graduates of a given program are sought out by recruiters and meaningfully promoted into more senior leadership roles than they would have been without the degree on their resume. The goal of pursuing this particular degree is to advance upward, rather than laterally, within an organization. Try to find post-graduation employment statistics and titles that will make clear whether this is the case for the program’s recent graduates. If many people received a moderate raise, but no change in title, this may be a red flag that indicates weaknesses in some aspect of the program.
Many Factors Determine the Salary and ROI for MBA Grads
For many years, the Master of Business Administration degree has been a must-have for management professionals across the board. In recent years, with skyrocketing tuition costs, many students have begun to focus on the degree’s viability, cost, and long-term ROI. For this reason, it’s important to evaluate more than just the MBA starting salary that most graduates enjoy upon completing the program.
