In the past couple of years, business schools have seen decreased enrollment rates for MBA programs. Why? And is it still worth it to earn an MBA?
Why application rates are down
From 2017 to 2018, business schools were seeing a major drop in applications. Full-time one-year MBA applications dropped by 2.64%. Part-time self-paced MBA applications also dropped, at a rate of 7.75%.
Even prestigious business schools experienced a downturn in enrollment. The Wall Street Journal states Harvard Business School applications dropped at 4.5% in the 2018 academic year, the lowest drop since 2005. In addition, international students are having a hard time entering U.S. business schools with the lack of work visas after graduation. In 2018, Harvard faced 11% fewer international applicants compared to the previous year.
There has also been competition with other out of country programs in Asia and Europe for international students. A Graduate Management Admission Council survey showed the number of MBA applicants in 2017 did not change overall, but enrollment in the US declined because students wanted to earn their degrees in other countries. There was an 8% increase in enrollments in Canada and a 9% increase in East and South Asia.
Other well-known business schools saw a decrease in applicants as well. Stanford saw a decrease of 4.6%; Wharton Business School of University of Pennsylvania fell by 6.7%. This could be due to expenses, the economy, or college debt and applications vary year to year. Despite these shifts, the value of MBA degrees holds.
Tuition for MBA programs has increased faster than inflation, not unlike other colleges in recent decades. In 2016, NYUs Stern School of Business total cost of full-time MBA program was $200,000. At Stanford, Wharton, and Columbia business schools, tuition costs range from $100,000 to $204,000.
Other MBA programs that have increased their tuition significantly include MIT, which raised its cost by 18% in a three-year period. UCLA increased by 13.3%, and Michigan rose by 11.3%. Since the costs of MBA programs are continuing to rise, learners are more hesitant to invest.
However, there are many ways students can save and receive aid for the program. Students can also get involved with fellowships to help cover the cost. Stanford’s fellowship awards $70,000, eligible to 50% of each MBA class. UCLA also offers over 600 scholarships, fellowships, and awards. MIT, the most expensive MBA program, offers dozens of fellowships, for which students are automatically eligible without an application.
Some companies offer MBA scholarships for their employees. They typically require the employee to remain in contract or return after completing the degree. Another form of sponsorship from employers is tuition reimbursement. Your company can include tuition assistance and sponsorship programs if you take the means to find out.
Along with the tuition prices, there are a lot of other underlying costs such as fees and books, as well as acquiring key technological devices necessary to excel in some business programs. All those costs can round up to $200,000 within a two-year program. It is important to be aware of the financial stake that goes into earning this degree.
There are other options of earning an MBA that won’t cost a fortune. Some online programs allow part-time students to earn their MBA at only a few hundred dollars per credit.
California Southern University also offers affordable tuition to students looking to earn their MBA online. The tuition for a full MBA degree is less than $25k. There is also a no-interest tuition payment plan so students can avoid the burden of debt. With the same type of accreditation as Stanford and other top schools, students earn degrees that are just as credible with more personalized instruction and a much lower price.
ROI of an MBA Degree
A factor when considering pursuing an MBA degree is the value. What is the starting salary for professionals who hold an MBA?
If an MBA program cost $120,000, a graduate will see the ROI much faster with a position increasing in salary around $50,000 bonus. It can almost take someone ten years to earn the salary of someone who holds an MBA degree.
Some MBA programs show higher graduate salaries or overall ROI than top schools in the U.S. as well. Stanford’s Business Graduate School average starting salary for MBA grads is $125,000 while the cost of tuition is $119,000. Arizona States Business Graduate School is ranked 25th top business schools, the total cost of the MBA program is $68,000, while graduates earn an average salary of $98,000.
For managers who have an MBA degree, average salaries exceed $100,000. Here are a few examples of salaries based on the type of business degree:
- IT Manager salary: $135,000
- Sales Manager salary: $117,960
- Financial Manager salary: $121,750
The ROI from an MBA degree extends beyond the cost as well. An MBA’s worth is not all based on the standard ROI calculation. What you learn and apply from the program is valuable for your professional development beyond the salary as well. Job satisfaction and career potential both go up in MBA graduates, with learners building on their existing skills and network.
An MBA gives students the necessary skills to thrive in today’s complex business world. Employers want to see that candidates have robust experience and a solid education. Business programs help students sharpen skills and leadership abilities to prepare leaders for future promotions and recognition as well.
Is an MBA Worth It?
An MBA is only worth the time, expense, and effort if the candidate wants to work in the business world and see themselves as an upper level manager, c-suite executive, or company founder. Those who do well and receive the highest ROI are often returning students who already have substantial business experience and want to achieve the next milestone.
An MBA is very suitable for someone who wants to be a leader. This can be anywhere from an entrepreneurial leader, corporate leader, non-profit, government, and more. An MBA is best fit for self-starters who have a specific career goal.
Another factor to consider while pursuing an MBA is lifestyle. Completing this degree is a big commitment. Learners should ensure they are ready for the commitment and understand how their life will change while they earn the degree. The most difficult part of this degree is the amount of time that goes into the program.
CalSouthern also understands the difficult work-life balance for an adult learner. Being online offers more flexibility. Students can also start their courses monthly rather than waiting for fall or spring admission. In addition, CalSouthern support their learners by providing one-on-one faculty mentors. Mentors help learners master course material and apply it to real-world challenges, which is perfect for those already working in business.
Before choosing an MBA program, establishing clear goals and desired outcomes post-graduation is important. Not only should an academic program enhance a professional’s career goals, but it should suit the learner’s personal goals as well.
With this degree graduates can earn a broad range of skills and apply them to current professional goals and future careers. An MBA is still very valuable, allowing graduates to stand out in the job market as cutting edge leaders. If you’re ready to enroll in an MBA, click here to get started!