There are many factors that can help you determine if pursuing a Master of Business Administration (MBA) degree is worth the time and the trouble. On the one hand, the median student loan debt for MBA graduates worked out to $46,045 at last count, according to figures from the Brookings Institution. On the other hand, if you absolutely need to have an MBA to work in your chosen field, the tuition for your MBA program could be the best money you’ve ever spent.
To determine if an MBA is worth it, you should have a goal in mind, as well as a full understanding of the opportunity cost involved.
Factors to consider before applying to an MBA program
Deciding to pursue an MBA degree is a life-altering decision that deserves the appropriate amount of care and consideration. At the end of the day, you’ll need to consider a range of factors before you decide if an MBA makes sense for you and your situation.
Benefits of MBA degrees
An MBA degree can make a huge difference in students’ career potential and future salary. Here are some of the main benefits to consider about this degree.
Higher salary potential
Many people pursue an MBA for the improved earning potential, with many business professions earning more than $100,000 annually. Of course, your salary depends on your area of expertise, company, location and more. Still, figures from PayScale show that the average MBA graduate earns around $90,000 nationally.
Greater opportunity to advance or change careers
Along with the increase in salary, many MBA graduates enjoy improved access to leadership positions. In fact, many MBA programs focus on leadership and management skills to ensure that graduates can take that forward step professionally.
Employers are also looking to hire graduates with MBA degrees; the Graduate Management Admission Council found that 89 percent of surveyed recruiters plan to hire MBA graduates in 2021.
Ability to develop highly marketable skills
MBA programs equip business professionals with extremely marketable and in-demand skills. Students hone their communication and critical thinking skills, along with their networking and interpersonal abilities.
Learners also develop an understanding of the inner workings of businesses. They learn strategy and analytical skills, which can help them become more effective team and project managers. While other graduate degrees can provide students with many of these skills, few programs develop such well-rounded professionals as MBA programs.
Drawbacks of MBA degrees
An MBA degree isn’t right for everyone; depending on your financial and career situation, you may want to pursue a different type of education.
Over the course of a one-year or two-year MBA program, students can expect to pay $70,000 to $200,000 or more to complete an MBA degree. This estimate includes the cost of tuition and fees, as well as books, supplies and living expenses.
And remember, the cost of an MBA program comes in addition to the amount students have already paid to earn a bachelor’s degree. That’s why many MBA students leave school with student loan debt.
MBA programs often require a two-year commitment of full-time study. This can create challenges for parents, new graduates with school debt or professionals who cannot afford to lose their jobs. While part-time, online and executive MBA programs may allow students to work and study at the same time, MBA workloads can be intensive and difficult to balance.
The broad nature of an MBA appeals to many students, but not all learners benefit equally from this approach. Professionals looking to specialize in accounting or finance, for example, may be better suited for a more focused program.
What are some alternatives to MBA programs?
A traditional MBA is not always the answer. For some students, choosing a different type of program can provide more suitable and accessible training.
Certificates and certifications
Many college certificates offer specialized training in an accelerated format, covering topics like project management, accounting and marketing. Students can develop focused skills and knowledge in an area of interest without having to commit to years of schooling. Professionals looking to excel in their current role or quickly expand their skill set may find certificates a better option than an MBA.
Certifications, on the other hand, come from industry organizations and help professionals build up their qualifications. These credentials acknowledge a person’s mastery within a specific field, such as business analysis or project management. Certifications also cover vendor technologies and applications, which may help professionals land new or more advanced careers.
Specialized master’s degree
For prospective students aiming for a specific field, a specialized master’s degree can provide much more in-depth and focused training than an MBA. While an MBA provides comprehensive training and marketable skills, specialized master’s programs delve into advanced concepts of one field, such as accounting, finance or marketing.
Specialized master’s degrees also offer more accessibility for students. These programs usually cost considerably less than MBAs and may feature more accelerated, part-time and online options. Since many MBA programs require a minimum of two years professional experience, a specialized master’s degree may be the only viable option for new graduates and inexperienced professionals.
A mini MBA is a program that compresses a basic business education into around one to six months of education. These programs can focus on a group of core business skills or on specialized knowledge. Mini MBAs also cost considerably less than MBAs and require less experience for admission.
These crash courses in business can help new graduates quickly develop advanced business skills or allow experienced professionals to pick up specialized knowledge without sacrificing employment. While a mini MBA cannot match the depth of training in a traditional MBA, it can give business professionals a competitive advantage without the commitment of a full degree.
When is an MBA worth it?
Some career fields require an MBA, so pursuing this advanced degree makes sense if you have your heart set on working in a specific job. For example, you may need to earn an MBA if you want to become a financial manager or a computer and information systems manager, or if you want to climb the corporate ladder to become a general or operations manager or a top executive.
An MBA can lead to personal and professional benefits, but many people also choose this route for the financial rewards. Four out of five respondents in a GMAC alumni perspectives survey said their MBA brought excellent or outstanding value, and 73 percent of respondents found it financially rewarding.
Take the time to research tuition costs for the MBA program you’re considering, then compare them to the salary you might earn in your future career, which you can research on the Bureau of Labor Statistics website. Once you know what your MBA will cost and how much you might earn if you have it, you can decide if the program is ultimately right for you.
Frequently asked questions about MBA programs
What are the benefits of an MBA?
MBA programs equip professionals with comprehensive and advanced business knowledge and skills. In these programs, learners fine-tune their communication and leadership skills and gain valuable networking opportunities. An MBA degree may also open up higher salaries and better career opportunities.
How long does it take to complete an MBA?
The typical MBA takes students two years to complete, but accelerated options and online programs may allow learners to fast-track their studies. Working professionals might also find part-time options that allow them to complete their studies over a longer time period.
What do you learn in an MBA program?
Each MBA program has its own curriculum, but many share a similar approach in regards to the core training. For example, MBA programs commonly offer courses in strategy, leadership, financial management and business analytics. Other topics may include sales, investment management and marketing.
How much does an MBA cost?
MBA costs vary dramatically depending on the school and type of program. The top 25 MBA programs in MBA Today’s rankings have total tuition fees of $55,727 to $161,810, but this number may be higher or lower depending on the length and location of your program.
Does an MBA help increase your salary?
Since many employers value the credentials of an MBA program and the program itself provides advanced skills and expertise, MBA graduates often earn higher postgraduate wages. The Graduate Management Admission Council found that companies expect to offer MBA graduates a median starting salary of $115,000, compared to $65,000 for new-hires with a bachelor’s degree.