Every now and then, the MBA takes a solid bashing.
Pundits say it’s a costly, useless degree for people who are already established in their careers. Others argue that it’s pointless to go to business school unless you can get into the most selective, prestigious MBA programs.
The value of the MBA depends on many factors. It may be an effective tool for people who want to switch careers, as it can open doors to lucrative fields and powerful networks. In areas such as investment banking or private equity, the MBA is essential for advancement. Depending on your particular situation, this degree can jumpstart your career and increase your income potential.
Since not all business schools are created equal, however, is it worth your time and money to consider a lower-tier program?
In light of the expense of MBA programs and the opportunity cost of leaving the workforce, many people base their decisions solely on the degree’s potential impact on future earnings. While financial goals are an important factor, there are many other reasons to enroll in an MBA program.
Skills Development and Professional Networks
In many industries, the skills students develop in MBA programs are relevant and increasingly required in the marketplace. If this is the case, a degree from a local or state school may take you where you need to go — especially if your industry respects the program you plan to attend. For example, graduates from George Washington University's School of Business often pursue careers in nonprofit and government sectors in which organizational mission and professional networks — more than salary — are the primary considerations.
Strategy and Selectivity
If you’re changing careers, it may not be necessary to attend one of the most selective schools. Instead, consider enrolling in a well-respected program that offers an excellent fit for your new path. Many state and and local universities, such as North Carolina State University's Jenkins Graduate School of Management, offer part-time, online, and full-time MBA options with strong ties to the local business community. If your goal is to be hired by a large company, such as Johnson & Johnson or Pfizer, note that many of them recruit from a range of schools, not just those in the top tier.
If, on the other hand, Wall Street is your desired destination, and if you don’t plan to enroll in one of the most selective programs, then it will be important to attend a school where top financial recruiters search for talent. Regional powerhouses, like Rice University, may lead you to diverse opportunities locally — they will also offer access to financial industries.
Return on Investment
Salary data suggest that, overall, graduates from the top 50 U.S. MBA programs enjoy a big return on their investments, as compared to their non-MBA peers. It’s important to note, though, that there is, on average, a considerable difference in earnings between upper- and lower-ranked schools. If money matters, and you’re not aiming for the most selective programs, ask yourself if the tuition and opportunity costs are worth the potential for advancement toward your professional goals. If an MBA is necessary to reach the next rung in your career, look for local business schools with strong ties to your industry or company.