OptimisticApplicant wrote:
CobraKai wrote:
mappleby wrote:
I just don't understand how a 25-30 ranked school charges about 90% of the cost of attending Harvard and people still sign up left and right.
Since this thread got jacked a long time ago, I don't feel so guilty adding to this discussion.
If you're not going to be in the Top 15, you better hope you live in the state of a public B-school in the 16-30 range. Schools like Kelley, McCombs, Kenan-Flagler, etc have in-state tuition in the $25K-$30K range. That's reasonable and helps the ROI seeing how the typical private school has the tuition at about $55K. It's interesting to note that private schools in the 25-40 range are the ones guilty of charging 90% for diminished employment opportunities.
Schools like Ross, Darden, Anderson, and Haas said "Eff it, we'll charge private school prices."
I have to say, I completely disagree with this. The financial ROI of business school varies greatly from person to person, because it's all about the change your salary/opportunity. Think of it this way:
John got a 3.8 from Princeton, scored 760 on the GMAT, and worked for GS for 5 years. He made $120K pre-MBA. When he goes to HBS, the degree costs him ~$380K all-in (including opportunity cost). When he graduates he lands a consulting gig, but is making $130K (just $10K more than he did pre-MBA) -- that's a brutal financial ROI.
Now consider Bill, who got a 3.1 from his local state school, a 630 on the GMAT, and worked in HR for 2 years. He made $35K pre-MBA. When he goes to Babson, the degree costs him $225K (including opportunity cost). When he graduates he lands an analyst role that pays $85K ($50K more than he made pre-MBA).
In the end, John and Bill paid the same amount in tuition and living expenses, but Bill had a significantly better ROI.
Fair enough, BUT... you'd also have to take potential future earnings into account. The person coming out of HBS has a greater chance of accelerating their earnings quickly due to the companies they tend to land in.
5 years down the line, on average an HBS grad makes 230K (according to P&Q for number collected in 2010, should be higher now), how about Babson?
When lifetime earnings come into play, it's tough to argue that a Babson MBA has a better ROI then a HBS MBA regardless of pre-mba salary.
Now sure, you can argue that the caliber of talent coming into HBS would have had a higher earning potential to begin with...
This article -
https://poetsandquants.com/2011/06/14/mbas-that-return-more-than-3-million/States that in 20 years, on average, an HBS grad will earn over 3million, Babson is not listed, but would at least be under 2.4 million.
There will always be outliers of course. The Babson grad who uses that new entrepreneurial outlook on life, and hits the ground running. He launches an internet startup and sells it to facebook for 5m in 3 years. The HBS grad who works in non-profit, and brings in sub 100K each year for the foreseeable future.
Fanatical Times publishes ROI of a degree, they do not take opportunity cost into consideration, but just basic %increase of salary post MBA. HBS = 121%, Babson = 98%. I'd be pretty happy with either.
Of course it is a case by case basis, but on average, the numbers are pretty clear.
If person A get into Babson and HBS, they will get a better ROI from Harvard, but be paying close to the same price. Babson may be worth the money for Bill, but Harvard would be worth much more.
Edit: Essentially... what machichi said... Without all of the data that I wasted time collecting...