In the US, average student loan debt totals around US$1.75 trillion.
Schools across the country have increased their tuition by more than 135% between 1963 and 2021, resulting in students turning to loans to support their education.
A big contributor to this is the cost of higher education is advanced degrees like a Master of Business Administration (MBA).
The cost can be tens of thousands of dollars, even up to six figures for the most prestigious MBAs. For example, an MBA from Harvard Business School costs US$149,820.
But why are MBAs so expensive?
One of the biggest reasons is the perceived return on investment (ROI). An MBA is seen as a ticket to better job prospects and higher salaries.
Studies have shown that MBA graduates can expect a significant increase in their earning potential compared to those without it. MBA graduates earn up to $50k more than those with just a bachelor’s degree.
However, it will first take a significant amount of financial investment to obtain an MBA.
While the price tag might seem justified by the potential increase in income, there are alternatives to obtaining the same skills, knowledge, and qualifications at a more affordable price.
Why is an MBA worth it?
There is no denying that obtaining an MBA is worth it, especially for those seeking to advance their careers to the next level.
Reasons include:
- Skill enhancement: MBA programmes offer a comprehensive curriculum covering many aspects of business management, such as finance, marketing, operations, and leadership. These skills are essential for those looking to excel in managerial positions.
- Networking opportunities: The most prestigious MBA programmes provide an excellent environment for networking with peers, professors, and industry professionals. Building a strong network can open doors to job opportunities, partnerships and connections.
- Career advancement: Obtaining an MBA can significantly boost earning potential and career advancement opportunities. Based on a survey by the Graduate Management Admission Council (GMAC), 89% of graduates reported that an MBA enhanced their career prospects.
- Entrepreneurial skills: Whether you aspire to start your own business or climb the corporate ladder, an MBA equips you with entrepreneurial skills, such as strategic planning, financial management and innovation.
- Specialisation options: Many MBA programmes offer specialised tracks or concentrations, allowing you to tailor your education to your career goals. Whether it’s finance, marketing, healthcare management or technology, you can choose a specialisation that aligns with your interests.
- Leadership development: MBA programmes focus on developing leadership qualities and managerial skills. You will learn how to lead teams and make strategic decisions through case studies, group projects, and real-world simulations.
Why is an MBA so expensive?
MBAs are a prime example of high investment leading to excellent results.
The programmes often boast highly qualified faculty members with experience in business and academics. They also have funds for research, guest speakers, and other resources to maintain the quality of education, adding to the cost of tuition.
Another main advantage of an MBA is the networking opportunities it provides. Universities organise events, seminars, and conferences where students interact with industry professionals. These networking events come with their own costs, usually reflected in the tuition fees.
The most prestigious MBAs are from some of the top universities in the world and offer the cream of the crop: expert faculty, extensive curriculum, and so much more.
Many of the most prestigious MBAs also have accreditation from organisations like the Association to Advance Collegiate Schools of Business or the Association of MBAs, which ensures quality standards. Securing and maintaining these accreditations require substantial investment in resources and infrastructure, once more contributing to the cost of the MBA.
While these programmes charge higher tuition fees based on their brand name and reputation, it is important to evaluate the programme and its ROI rather than just the institution’s prestige.
Comparing tuition fees, alumni outcomes, faculty expertise, and curriculum can help you make a more informed decision about where to pursue an MBA.
What are the most prestigious MBAs in the world?
QS Global MBA Rankings 2024 ranked business schools around the world based on their diversity, thought leadership, employability, entrepreneurship and alumni outcomes and ROI.
Here are the top 10 MBAs in the world:
No. | University | Price (US$) |
1. | Stanford Graduate School of Business | US$159,720 |
2. | The Wharton School of the University of Pennsylvania | US$87,370 |
3. | Harvard Business School | US$149,820 |
4. | London Business School | US$145,082 |
5. | HEC Paris | US$106,105 |
6. | MIT Sloan School of Management | US$144,000 |
7. | Columbia Business School | US$232,760 |
8. | IE Business School | US$205,088 |
9. | Cambridge Judge Business School | US$74,413 |
10. | IESE Business School | US$186,339 |
Affordable vs expensive MBA
When considering pursuing an MBA, the question of affordability versus expense is crucial. Let’s break down the benefits and disadvantages of opting for an affordable MBA and why it could be a wise choice for many students.
Benefits of an affordable MBA:
- Lower financial burden: Affordable MBAs typically come with lower tuition fees, reducing the financial strain. This means less student debt to repay after graduation.
- Accessibility: A lower price tag makes MBA programmes more accessible to students, including those from diverse socioeconomic backgrounds.
- ROI: While expensive MBA programmes may boast prestigious names, affordable programmes can still offer good ROI. Many employers value skills and knowledge over the prestige of the institution.
- Flexibility: Affordable MBAs may offer flexible scheduling options, allowing you to work part-time or pursue internships while studying.
Unfortunately, there are some disadvantages to choosing an affordable MBA over the most prestigious MBAs.
- Prestige: Some employers may place more value on MBAs from prestigious, expensive institutions.
- Limited resources: Affordable MBAs may have fewer resources for things like career services, networking events or international opportunities compared to the most prestigious MBAs.
- Smaller alumni network: The most prestigious MBAs have larger alumni networks, which will benefit career advancement.
However, choosing a more affordable MBA still provides opportunities for career advancement and success. The perception of MBA programmes is changing, with more emphasis placed on the skills and knowledge gained rather than the prestige of the institution.
Avoiding student debt by opting for an affordable MBA will give you financial stability in the long run.
On-campus vs online MBA
One of the biggest advantages to pursuing an online MBA versus an on-campus one boils down to cost-effectiveness. Between cheaper tuition and fewer expenses made on commuting or accommodation, online MBAs are more affordable than the ones that require in-person attendance.
According to GMAC, about 31% of MBA students worldwide preferred online or blended MBA programmes over traditional full-time programmes. On top of that, a report by US News & World Report found that nearly 70% of online MBA students continue working while pursuing their degree.
However, both on-campus and online MBAs have their benefits and disadvantages.
Benefits of on-campus MBAs:
- Face-to-face interaction: Campus-based MBAs offer direct interaction with professors and peers, which is better for networking and collaborative learning.
- Schedule: Having fixed schedules can help you stay disciplined and focused.
- Access to campus resources: You will have access to libraries, research facilities, and other campus resources.
Disadvantages of on-campus MBAs:
- Location: You will need to live in the same country and close to the campus, which will be difficult if you are not able to relocate.
- Full-time commitment: Traditional MBA programmes require full-time attendance, making it challenging for you to manage your job and studies.
- Higher costs: On-campus programmes come with higher tuition fees, and you will also need to spend on rent, transportation, and other living expenses.
Benefits of online MBAs:
- Flexibility: Online MBA programmes offer flexible schedules, so you can balance your studies with work and other commitments.
- Earning while learning: Online MBAs will allow you to continue working while pursuing your MBA.
- Lower costs: You will have lower tuition fees because you can save on commuting and accommodation expenses.
Disadvantages of online MBAs:
- Limited face-to-face interaction: You will lack face-to-face interaction, which could affect networking opportunities and collaborative learning.
- Self-discipline: You must have strong self-discipline and time management skills to stay motivated and organised without the structure of regular classes.
- Perception by employers: While online MBA programmes are gaining acceptance, some employers may still prefer those with traditional on-campus experience.
This begs the question, does it matter where you get your MBA?
Where you can earn an affordable top-quality MBA
Sure, when you choose a more affordable university, you won’t experience a full-time residential MBA programme at a world-renowned school like Harvard Business School or Stanford Business School, but you can still get a solid MBA education.
With these affordable tuition fees you can still gain the knowledge and skills that you need from universities that are still well-known and well-respected.
At the end of the day, just because an MBA is expensive does not mean you are guaranteed success. It depends on how you utilise what you have gained and use it to further your career.
If you are looking for an inexpensive way to get your MBA, here are the most affordable but top-quality MBAs:
No. | University | Price (US$) |
1. | Oklahoma State University | US$12,012 |
2. | Missouri State University College of Business | US$13,325 |
3. | Louisiana Tech University | US$8,900 |
4. | Memorial University of Newfoundland | US$16,334 |
5. | EU Business School | US$8,121 |
6. | University of Southern Indiana | US$12,000 |
7. | Troy University | US$14,725 |
8. | Florida Gulf Coast University | US$12,342 |
9. | Sam Houston State University (TX) | US$11,529 |
10. | University of Texas Permian Basin | US$8,246 |