MBA Programs With The Highest 10-Year ROI by Nick Selbe, StartClass
The decision to pursue a business degree is a difficult one to make. The main factor to consider for most people, though, is fairly simple: Is this a good financial move?
Answering that question can be complicated. The average age of people attending business school is around 26 or 27, according to Bloomberg Business, which means someone with a bachelor’s degree could be five years into his or her career before taking a two-year break to pursue a business degree. That means forgoing two years of salary and paying two years of tuition, all with the hopes of making that money back (and then some) in the future.
At StartClass, we wanted to see which of the country’s top MBA programs offer the best 10-year return on investment. To accomplish this, we first used our Smart Rank system to identify the top 50 business schools. Smart Rank is determined by the weighted average of business school rankings by five publications — U.S. News, Bloomberg, the Economist, the Financial Times and Forbes — along with some other school factors, such as acceptance rate, post-graduation salary and average GMAT score.
Once we had our list of 50 schools, we used the reported median salary of full-time workers ages 25 and older with bachelor’s degrees. That’s $57,252, according to the U.S. Bureau of Labor Statistics. This comes from a December 2015 report and reflects 2014 salary information. We used this wage as our assumed pre MBA salary.
Then, we used a 3 percent salary increase rate based on an August 2015 report by CNN Money that states the base pay raises for 2016 will be 3 percent. We then calculated the projected 10-year salary of someone without a business degree and subtracted that total from the projected 10-year salary of a business school graduate from each of the top 50 schools. The schools are ranked according to the difference between their 10-year new salary and their 10-year pre MBA salary. Numbers are not adjusted for inflation and do not take into account sign-on bonuses and other compensation or qualitative gains, such as networking and skills.
For each school, we used the total out-of-state cost of the MBA program, according to the most recent data from the Association to Advance Collegiate Schools of Business. For public schools, this number was slightly higher than in-state cost, but schools don’t make breakdowns of their students’ residence available, so we were unable to use a more accurate figure. Because of the lower cost of attendance, in-state students at public schools featured in this ranking can expect an even higher ROI than what’s listed. Average salary information for each program comes from the schools’ individual websites. Cost does not consider loan interest or expenses like rent, food or other transportation.
Some studies rank MBA programs based on one-year ROI, but we believe this is too short of a timeframe to fully weigh the monetary benefit of going to business school. Our 10-year projections aim to provide a clearer picture of which top programs provide the best bang for your buck.
#25. Arizona State University Carey School of Business
Total out-of-state program cost: $67,693
Average salary of graduates: $98,093
10-year ROI: 249 percent
#24. NYU Stern Business School
Total out-of-state program cost: $131,402
Average salary of graduates: $112,096
10-year ROI: 250 percent
#23. Northwestern University Kellogg School of Management
Total out-of-state program cost: $130,418
Average salary of graduates: $113,000
10-year ROI: 255 percent
#22. Penn State University Smeal College of Business
Total out-of-state program cost: $71,536
Average salary of graduates: $100,000
10-year ROI: 256 percent
#21. University of Washington Foster School of Business
Total out-of-state program cost: $80,316
Average salary of graduates: $102,722
10-year ROI: 260 percent
#20. UNC Chapel Hill Kenan-Flagler Business School
Total out-of-state program cost: $107,994
Average salary of graduates: $109,390
10-year ROI: 262 percent
#19. University of Texas Austin McCombs School of Business
Total out-of-state program cost: $97,664
Average salary of graduates: $107,272
10-year ROI: 263 percent
#18. Georgia Tech Scheller College of Business
Total out-of-state program cost: $79,448
Average salary of graduates: $103,454
10-year ROI: 266 percent
#17. Duke University Fuqua School of Business
Total out-of-state program cost: $109,844
Average salary of graduates: $111,000
10-year ROI: 268 percent
#16. UCLA Anderson School of Management
Total out-of-state program cost: $109,540
Average salary of graduates: $111,000
10-year ROI: 268 percent
#15. Cornell University Johnson Graduate School of Management
Total out-of-state program cost: $109,744
Average salary of graduates: $111,000
10-year ROI: 268 percent
#14. Emory University Goizueta Business School
Total out-of-state program cost: $93,168
Average salary of graduates: $107,220
10-year ROI: 269 percent
#13. Texas A&M University Mays Business School
Total out-of-state program cost: $52,468
Average salary of graduates: $98,000
10-year ROI: 271 percent
#12. University of Virginia Darden School of Business
Total out-of-state program cost: $111,800
Average salary of graduates: $112,257
10-year ROI: 272 percent
#11. Carnegie Mellon University Tepper School of Business
Total out-of-state program cost: $115,000
Average salary of graduates: $114,000
10-year ROI: 277 percent
#10. Columbia Business School
Total out-of-state program cost: $135,637
Average salary of graduates: $119,400
10-year ROI: 279 percent
#9. University of Michigan Ross School of Business
Total out-of-state program cost: $114,789
Average salary of graduates: $115,315
10-year ROI: 284 percent
#8. MIT Sloan Business School
Total out-of-state program cost: $131,250
Average salary of graduates: $119,639
10-year ROI: 285 percent
#7. University of Chicago Booth School of Business
Total out-of-state program cost: $127,960
Average salary of graduates: $120,000
10-year ROI: 290 percent
#6. Dartmouth College Tuck School of Business
Total out-of-state program cost: $114,465
Average salary of graduates: $117,860
10-year ROI: 296 percent
#5. University of Pennsylvania Wharton Business School
Total out-of-state program cost: $141,740
Average salary of graduates: $125,000
10-year ROI: 297 percent
#4. UC Berkeley Haas School of Business
Total out-of-state program cost: $119,443
Average salary of graduates: $120,000
10-year ROI: 300 percent
#3. BYU Marriott School of Management
Total out-of-state program cost: $22,560
Average salary of graduates: $97,000
10-year ROI: 320 percent
#2. Harvard Business School
Total out-of-state program cost: $122,450
Average salary of graduates: $125,000
10-year ROI: 320 percent
#1. Stanford Graduate School of Business
Total out-of-state program cost: $119,100
Average salary of graduates: $125,000
10-year ROI: 325 percent
