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The 411 on the ROI of an MBA in the US

Posted on January 24th, 2013 by Jenny Frankel

mba146780618It’s no secret: an MBA in the US is an expensive proposition. The price tag is high (and rising) and doesn’t stop with the direct costs – namely, program tuition, school fees, books, and supplies – incurred as a necessary result of program enrollment. For many full-time MBA students there are also indirect (or opportunity) costs to consider. Thus the suspension of work (and therefore income) as well as ongoing living costs for up to two years should be carefully considered as well.

Given these costs, then, the first step in determining whether an MBA is a good investment for you is to recognize it for what it really is: an investment. What, then, is the return on investment of a US MBA? Like any other good return on investment, we need to determine if this is a situation where the invested resources (in this case the MBA costs) will yield a greater return of resources over time.

Because an MBA will often lead to a promotion (or enable you to move to a better job), higher earning potential after an MBA should be taken as a given. While often expensive, an MBA degree can greatly increase the graduate’s earning potential in the long term. This long term consideration is the important factor here. A key distinction between international MBA programs – long most cost-effective rival to US MBA programs – and their US counterparts is program length. Most international MBA programs last one year while US programs usually last two years.

On the face of this, if all MBAs were created equal, an international MBA program would be the prudent investment. That, however, is not the case. Studies indicate that, despite the advantages of a shorter international program, the prestige of US business schools translates into higher earning potential for their graduates. Because they continue to take the top spot on so many rankings (and because their students will enjoy the benefits of increased earning potential long after they complete their MBAs) the general rule of thumb is clear: an MBA in the US the prudent long term decision.

Written by Jenny Frankel

Jennifer is the Director of Financial Services at Envisage International. Jennifer is a graduate of the University of Florida where she holds a Masters in International Business and a Bachelors of Science in Business Administration. She has lived and worked abroad in Chile, Costa Rica and London, and traveled extensively in South America, Europe and Asia.

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One Response to “The 411 on the ROI of an MBA in the US”

  1. Anthony Blare Says:

    This is an issue that just won’t go away. Governments need to be a whole lot more sensible about their approach to international students. Yes, they want them – they’re clear about that. But do they do everything they can to help them while they’re here.

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