Last week I had the pleasure of speaking to about 100 MBA students at the University of Sydney and one question crossed my mind – will this course actually boost the career earnings for all of them?
According to analysis by the Wall Street Journal, yes it will… and yes that study looked at students in the United States so let’s hope it is transferable.
At about 98% of universities that offer master’s of business administration programs, graduates typically made more money two years out of school than they had borrowed, a Wall Street Journal study of federal student loan data for nearly 600 programs found.
The report gave an example of Jenny Le, 29, enrolled in 2018 at Columbia Business School, where total tuition and fees were a whopping $160,000 for the two-year M.B.A.
She tapped savings and scholarships and borrowed $38,000 to attend, assuming she would take several years to pay down the debt after graduating. Thanks in part to a signing bonus she got with her new role as an
associate in corporate strategy and development for Teachers Insurance and Annuity Association of America in New York, she cleared the debt in six months.
The price for some MBA programs in Australia can be upwards of $15,000 with some around $80,000. The cost can end up being higher if you have to attend real classes or weekend or weeks in training depending on your location and travel.
Xin Deng Senior Economic Researcher at University of South Australia believes that MBAs and other post graduate study can add to your earning potential. But she adds that the key is doing a cost benefit analysis first.
Deng provides the following for consideration when looking at the benefits:
- What do you want to do after receiving the degree?
- MBA can be useful for career transition or career breakthrough.
- What are the extra value of a MBA can add to your career plan?
- Network/Skills/Specialisation.
- Institution-specific benefits.
- Access to the job market you are targeting.
- Company director course as part of the package.
Now think about and add up these costs:
- Tuition fees.
- How much it is and how are you going to finance it.
- Loss of income.
- Will it affect your current job?
- Time.
- Will your employer give you time off/can you manage with your current commitment?
- Other impact on your lifestyle.
If you reach the end of this process and find that the benefits outweigh the costs, then we say go for it. If not, consider a good MBA book!
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