Is an MBA Paycheck Worth the Student Loans?
Written by
Caitlyn Moorhead
Edited by
Amber Barkley
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Typically, the point of pursuing higher education is to land a higher starting salary once you graduate. Earning an MBA may seem like the way to go, but does it compete with years of work experience?
The amount of money and time you are willing to invest into your education should align with your career goals, and more importantly your dream job’s earning potential. So, before you start applying for student loans, you should determine whether the degree is worth it.
If you are considering this degree and everything a full-time MBA program offers, you should review several factors and thoroughly weigh your options before committing to something that might not even cover your federal student loans.
Is an MBA Worth It? 4 Ways To Check
Getting an MBA is an investment, and not everyone will come out ahead even with a preexisting professional network. Before heading back to school, potential students need to do their homework and consider the costs of getting an MBA against their post-graduate earning potential.
Here are the steps to determine whether an MBA might be worth the investment.
Determine the Cost of an MBA
According to Best Colleges, the costs of MBA programs vary but average about $63,000. However, top-tier programs cost closer to $125,000 a year, but in-state and online MBAs can be less expensive. Here are some other key takeaways:
- The average total cost for an MBA is about $31,300 per year or $62,600 for a full two-year program.
- A full-time, in-person program averages about $46,700 a year.
- A part-time, online program averages about $16,000 a year.
- Top-ranked private university MBA programs will be much more expensive as the school’s tuition and fees alone cost anywhere from $83,000 to $90,000 annually.
- MBAs tend to be costlier than for general master of arts, science or business school graduates.
Students who have to borrow to finance their degree should account for student loan interest when determining whether an MBA is worth pursuing. Those who choose a part-time program will take longer to graduate and get that salary boost, but they are also more likely to have the time to keep earning while getting their degree.
Research Average MBA Salaries
What you make with an MBA will depend on a number of factors but here are some general statistics to keep in mind.
- A Graduate Management Admissions Council survey projected the median starting salary for MBA graduates at U.S. companies in 2024 to be around $120,000.
- The National Association of Colleges and Employers Winter 2024 Salary Survey projected a lower average MBA starting salary of $75,303.
- U.S. News & World Report calculated an average starting salary for the class of 2023 as $109,159 base salary and $128,997 including bonuses.
When researching potential earnings, individuals must look closely at the data. Not all MBA programs turn out high earners, nor do all industries pay top dollar for an MBA.
Consider Job Outlook
Not all industries are experiencing job growth. Applicants should research employment projections on the U.S. Bureau of Labor Statistics website for specific industries.
Many job sites also publish job growth projections, such as ZipRecruiter and Indeed. Some MBA hopefuls may find that an industry change will be necessary to warrant the cost of an MBA.
Compare the Numbers
Students should determine potential future earnings both with and without an MBA, not just after graduation but over the next few decades. They should then compare that to what it will cost to get an MBA.
If the difference in earnings will significantly surpass a degree’s cost, then an MBA is probably worth pursuing. But if the projected salary for those with an MBA in a chosen industry is not much more than that of someone with a bachelor’s degree and a decade of experience, it may be best to skip the MBA and consider other ways to earn more.
Other Paths to a Higher Salary
An MBA is not the only way to a higher salary. Here are a few other avenues that individuals should consider before committing to an MBA.
Certifications Are Becoming More Common
Across industries, it is easier than ever to establish expertise without investing in an advanced degree. According to executive job site Glassdoor, the following certifications can increase earning potential:
- Human Resources
- Project Management
- Help Desk / Desktop Analyst
- Network Engineering or Admin
- Google Certifications
Entrepreneurship Is More Feasible Than Ever
Technology has made it possible for many professionals to hold down a full-time day job and then go home to a lucrative side hustle.
From resellers to freelancers and beyond, side hustles are popular. Tools like bots and user-friendly content management systems make it easy to source materials quickly and build a website, and professionals in every industry are taking advantage of it.
Some side hustlers eventually turn their side gigs into full-time income that rivals the salary of some MBA graduates.
Final Take To GO
The bottom line is there is no one-size-fits-all answer to the question, “Is an MBA worth it?” Unless the cost of getting an MBA is not an issue, interested parties should thoroughly research MBA programs, job growth projections and potential salary ranges before applying. The worst time to figure out that an MBA is not worth it is after graduation.
Andrea Norris contributed to the reporting for this article.
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