Nowadays, it seems as if a lot of people have or are getting an MBA. It almost seems like a generic degree people get when they do not know what they want to do. Further, according to a survey conducted by the Graduate Management Admission Council (GMAC) in 2018, applications to MBA programs in the US dropped 7% in 2017 and a further 70% of MBA programs admitting a decline in applications. A lot of people would argue that getting a technical degree such as those relating to Science, Technology, Engineering or Mathematics (STEM) would be more worth your investment of time and money. However, business degrees still hold value in today’s economy. In fact, an MBA requires significant math and analytical skills. That is something all types of businesses and organizations need and will continue to need in an increasingly globalized world.
What do the numbers say?
Here is the truth: even with business degrees on the decline, MBAs still remain one of the most popular degree programs in the United States. And for good reason. Forbes and PayScale create ranking for degrees based on early career pay, mid-career pay, pay growth, job satisfaction, job stress, job meaning and job-market projects (via US Bureau of Labor Statistics). In 2017, Corporate Finance and General & Strategic Management were ranked #4 and #5 respectively. Both of these concentrations can be achieved by getting an MBA and have some of the highest mid-career salaries of the top 45 masters degree programs ($142,900 to $154,400 respectively).
Further, of the top 15 degree programs, 5 are MBA’s. You can expect a business administration salary to rank at the top of most post-graduate programs. According to US News, $102,495 was the average salary recent grads could expect to receive in 2018. The BLS reported that the average salary earned by professional occupations in the US for the first quarter of 2019 was $66,820. Looking at the numbers alone,
How much does an MBA cost?
The idea of getting an MBA may sound great, but at what cost? Everybody knows that college is not cheap- and it is only going to get worse. The average cost of an MBA is not just its tuition. There are books to be bought, fees, housing and meals to pay for as well. All the costs can easily add up to $100,000 – $200,000 in debt over the course of two years! With the risk of being 6-figures in debt, a lot of people are wondering whether or not it is worth it to get an MBA. One way of looking at it, is by considering the amount of time it will take you to recover the costs of getting an MBA. If your degree cost $100,000 and your average yearly pay increase is $25,000, you can expect to have paid your degree off in 4 years.
You also need to consider the opportunity-cost of attending an MBA program. Most people interested in pursuing an MBA are already in the workforce. While a degree can help advance your career, you will also likely have to leave your job for sometime. For some people, it is possible to reduce to part-time or make other sacrifices while completing the program. The strong economic conditions we are experiencing is making it harder to convince people to leave the workforce. The loss of income and potential debt is worth it though. A graduate with an MBA can expect to make nearly $27,500 more a year than someone in a similar position with only a Bachelor’s degree. Likely, they also have worked longer in the position. Furthermore, some jobs will require you to have a masters degree at a minimum to even qualify for an interview.
How to Pay For an MBA
If you decided that getting your MBA is worth the investment then you need to figure out how to pay for it. While you could technically take the whole thing out on student loans, it is highly advised against. Your costs will likely exceed $150,000 and not to mention any bachelors loans you still have piled up. Luckily, there are plenty of ways to pay for your MBA.
Get your employer to pay for your MBA
A lot of companies see benefit to sending their employees to get their MBA. So much so that they are willing to pay for all or some of your tuition. On their end, it saves them time and money. They will likely pay a higher salary over time to someone who already has an MBA. Subsequently, sending an existing employee and paying for their tuition saves them money in the long run. Not to mention, there are plenty of benefits to promoting internal employees with qualifications rather than hiring outside of the company to fill a MBA-caliber role.
Most companies will require that you get an MBA with a concentration in the role you already fill within the company. For example, if you currently work in Human Resources, the company will likely ask that you get a concentration in HR. They will also probably require that you stay with the company for a certain amount of time, or risk paying them back for tuition costs if your employment is terminated. Some companies will not cover 100% of your tuition costs. Still, they may be willing to reimburse you for classes that add to your value as an employee. Such as taking an HR class rather than making it your concentration.
Many schools and organizations offer scholarships to graduate students. A lot of university departments award scholarships to students who apply and meet their criteria. While it may be hard to secure a full-ride scholarship, keep in mind that the small ones definitely add up! Some scholarships are also renewed annually. While $1,000 awards may seem insignificant compared to the total cost of tuition, they can accumulate into big savings.
Getting your MBA can be a daunting task. Whether you do not want to leave the workforce at a time with such strong economic conditions, or you are unsure whether or not the costs will be worth it, an MBA can be an invaluable tool for furthering your career. In some cases, your company may require you to have an MBA to advance through the ranks. If that is the case, it is possible they will cover some or all of the costs.