Looking Beyond Cost
Apr 18, 2013
Financial Aid, Official GMAT, Value of an MBA
Few things in life have a greater payoff than an investment in education in terms of the opportunity it provides to acquire skills, build a career, boost income, and fulfill personal goals. But increases in costs for higher education and changes in the world economy have had an impact decisions to enroll in graduate business programs, particularly since the start of the global recession.
Based on responses from more than 15,000 prospective students surveyed in 2012, we saw that nearly half of today’s future students had some concern about potential debt burden (46%) or school requiring more money than they had available (48%), and there is an increased importance of cost as part of the decision-making for an aspiring student.
But the percentage of students with enough concern to have financial reservations about enrolling in graduate business school had lessened since 2008. When selecting a program or school to attend, only 23% of prospective students listed the financial costs of attending school as their top school selection criteria. A majority (39%) instead ranked the quality and reputation of the school as their most important school selection factors. Of course, that is no surprise given the role that program quality and reputation play in helping students achieve their expected postgraduate employment goals—and the vast majority (85%) of prospective students planning to pursue a graduate management degree have definite employment goals in mind.
Economy Affects How Students Pay for School
Nearly 4 out of 5 prospective students indicated in 2012 they were not concerned about the state of the economy and only 18% felt taking time out to attend graduate school would delay job offers. Compared with 2009, fewer students globally expected to borrow money to pay for b-school (23% in 2012, versus 26%) or use grants, fellowships, and scholarships (17% in 2012, versus 21%).
Meanwhile, more students did expect to pay for a greater share of their graduate expenses with support from their parents (20% in 2012, up from 14% in 2009), but that is likely a factor of the increase in younger students considering graduate business programs in recent years. Take a look at the updated financing mix tool (by clicking on the image below) for more details about programs considered.
Keep Your Eye on the Prize
As you weigh the financing options available, keep in mind the potential outcomes. Here are a few highlights from business school alumni over the last 10 years:
Figure Your Finances
- High Employer Demand. More than 90% of class of 2012 alumni surveyed last September had jobs, and 67%–74% of full-time MBA grads had started a new job. Plus, world and US economic indicators all point to growing demand for master-level degrees.
- Good Value. 94% of alumni who reported holding loan debt after graduation rated the value of their education as good to outstanding.
- Improved Opportunities. 87% of class of 2012 alumni felt their education offered opportunities for quicker career advancement and increased earnings power.
- Strong Return on Investment. On average, alumni from class years 2000 and onward recouped 50% of their expenses two years after graduation and saw a full return on their financial investment after four years.
To learn more about determining what you can afford, what sources of financing you should consider, and other related information, see articles in the Finance Your B-School Degree
section of mba.com
. You can also use the School Search Service
advanced options to find schools that fit your budget or offer financial aid.