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MBA Prestige May Not Matter That Much

A lot of people planning to enter a business school believe that the school’s prestige is the most important thing in making your choice. However, according to experts interviewed by US News and World Report, a business school’s value is not determined by its prestige.

Prestige Is Not Everything

Jeff Thomas, CEO of Status Admissions Counseling (NY), states that the variety of business schools is much bigger than people imagine. Even if the school is not as famous or prestigious, it will still pay off when you graduate and start pursuing a career.

As more prestigious schools demand a higher tuition fee, entering a less well-known institution will prove to give a much higher ROI (return on investment), as in the end, you will collect much less student debt.

Student Debt Versus Salary: Where Does the Profit Lie?

According to Poets and Quants, the higher the ROI is, the less debt will the student acquire by the time of graduation. It is counted as a ratio of tuition fee and post-graduation salary. The table below shows the salary-to-debt ratio of the top 20 US business schools.

 Business schoolRanking (U.S. News)Average student debtStarting salary upon graduationSalary-to-debt ratio
1University of Texas - Austin17$59,860 $113,481 1.90
2Stanford University4 (tie)$80,091  $140,553 1.80
3Emory University20$73,178  $116,6581.60
4Harvard University1$86,375  $134,071 1.60
5University of California - Los Angeles15$80,806 $118,1501.50
6University of California - Berkeley7$87,546  $122,4881.40
7Carnegie Mellon University19$101,667  $117,7171.20
8University of Virginia14$106,710  $122,806 1.20
9University of Michigan - Ann Arbor11$102,665  $119,959 1.20
10University of North Carolina - Chapel Hill18$95,582  $111,922 1.20

 

For instance, less well-known schools like Emory University’s Goizueta Business School gives a 1.60 ratio, which means that graduates will earn $1.60 for every $1.00 they paid in tuition fees. It’s a much better prospect than graduates of Yale and Berkeley Haas are facing, although these two universities are much more prestigious. Additionally, the highest ranked MBA programs are not even in the top-10 in terms of ROI, which makes famous business schools fare less profitable for the graduate.

It’s not always as simple, though: often, graduates of top business schools have a higher starting pay, which means that the return is still higher.

Of course, there is no guarantee when planning for a post-MBA career. Still, a good move would be to look for a school that offers scholarships and fellowships to compensate the tuition fee – in this way, you’ll have much less student debt after graduation. Tuition fee compensation is mostly offered to students with high achievements, unusual working experience and brilliant GMAT results. However, if you come from a low-income background, you have a decent chance of getting into the scholarship list, even at most expensive universities.

Learn more about business schools that provide the best post-graduation salary on MBA25 event in Kyiv!

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