Is an MBA worth it? It’s a fair question, especially as higher education costs continue to balloon. Bloomberg conducted a survey of the Class of 2018 and found that nearly 50% of graduates accumulated over $100,000 of debt to finance their MBA’s. Many of those same students clarified that their higher earning potential post-MBA helped offset the debt that they incurred in their programs. In other words, they measured their Return on Investment (ROI) largely in economic terms.
ROI, however, doesn’t have to be a purely financial ratio, nor is there a single ROI to consider. In addition to salary, you should consider returns like the availability of networking, internship, and career opportunities. You should also think about the cultural and personal benefits: Will an MBA fulfill an unmet intellectual need for you? Will the degree help inspire your self-confidence?
When I researched MBA programs, I measured ROI in a variety of ways, but two of the deciding metrics were purely statistical: What percentage of students had job offers within 90 days of graduation, and what was the average starting salary for these hires? Like the students in the Bloomberg survey, I wanted to ensure that my investment would likely result in a well-paying job.
My interest in this financial data was largely reflective of personal experience. During the recession, I incurred $25,000 worth of debt to pursue a master’s degree in education (M.Ed.) with the goal of becoming an attractive teaching candidate. But my first job after graduation was dish washing in a restaurant. To be fair, my coworkers called me “professor,” and I enjoyed teaching flatware the finer points of U.S. History, but I wasn’t offered my first teaching position for another two years. When considering my next path for advancement, a program with a high degree of success in employment for graduates became a top priority.
I was careful to contextualize the employment and salary statistics across graduate programs. Rachel Foxhoven, the director of graduate business programs at Portland State University’s School of Business warns, “Starting salaries and signing bonuses might not be indexed geographically.” Graduates who remain in Portland, for example, typically have slightly lower starting salaries than those who relocate to cities with higher costs of living, like Seattle, San Francisco and Los Angeles. In addition, to publicize career placement rates “schools have to have between 75-85% of the graduating class reporting,” says Foxhoven. Because schools must invest time and money in those surveys, less-resourced programs might not be able to report their numbers despite having strong employment outcomes for their students.
Like other prospective students, I started my research with rankings to discern the caliber of programs. Rankings can give applicants a general idea of a program’s academic quality. Unfortunately, that’s where the usefulness of rankings tends to end. “Schools can drive up rankings by encouraging unqualified applicants to apply,” decreasing their reported acceptance rate, Foxhoven explains. Furthermore, statistical data, such as GPA and GMAT scores, can’t offer insight into the quality of professors or how well a program develops students’ soft skills.
Once I had an initial list of 12-15 programs, I narrowed it to six by considering the returns that were more important to me. Where was the program located? How large were the cohorts? What was the cost of attendance? Did the program’s values align with mine? Were relevant and experiential learning prioritized across the curriculum? Did the university promote a collaborative culture?
Only when I had the answers to these questions did I research graduate employment data. Some programs published this information on their websites, and others provided it upon request. Some programs didn’t have current data to share. With this information in-hand, I finalized my list of programs that would be worth my investment, and I began the application process.
Ultimately, I considered ROI in academic, professional and financial terms. At times, it felt cold and transactional, especially compared to my M.Ed. program search, which I conducted largely on ideological criteria. In the decade since my last degree, though, I have learned that my generation is likely to accumulate less wealth, and there are early indications of another economic recession.
In making decisions about my next opportunity for advancement, I knew I needed to prioritize the personal and financial benefits of a graduate degree. To achieve my goal of working as a consultant, I was looking for a program that envisioned business as a force for good, promoted experiential learning and fostered a collaborative environment. In addition to that strong ethos, Portland State University’s School of Business had the employment outcomes to prove The Portland MBA would have a high return on the time, energy and money I am investing.
If you are curious about PSU’s graduate business programs and certificates, you can learn about them at pdx.edu/sba/graduate-business-programs. If you have questions regarding a specific program, you can contact an advisor or email SBGradInfo@pdx.edu for more information.