Cost vs Benefit of an MBA
Earning an MBA can be a very costly process, both in time and money.
Many people jump into their MBA education without fully weighing the pros and cons. While an MBA may be extremely beneficial to many, it may not be worth the time and money for some. Here we dive into a couple of steps on the path to an MBA.
There are many steps that need to happen in order for a person to obtain an MBA. MBA programs used to require four to six years of work experience, and while such experience is still looked at positively, it is not always necessary for acceptance. Some applicants may choose to enter an MBA program directly after graduating from their undergraduate studies; others may opt to gain work experience before applying—this decision is the first step in an MBA application.
Next is preparing for the GMAT (Graduate Management Admission Test). While it is possible for applicants to study on their own, most successful applicants opt for some kind of a preparatory class. These classes come at a variety of prices and speeds, but three to six months is usually considered necessary for adequate test prep. The GMAT is one of the core aspects of an applicant’s application. Therefore, applicants should be sure to aim for a score of about 20 points above the average GMAT scores at their top school choices. A strong GMAT score is key to obtaining entrance to a strong MBA program.
Another important step is deciding how many schools to apply to. MBA applications can get expensive, in some cases costing around $300 per school. In addition to GMAT prep, application fees are another “pre-school” expense applicants must consider. If an applicant is set on attending school in the round they apply, it would be wise to apply to a wider range of schools. This can end up costing more than $1500 just for application fees. For this reason, it is important that applicants to MBA programs are confident their application is a strong candidate at each school they are applying.
Once the program starts, there are more obvious costs like tuition and living expenses. However, these are not usually the biggest expense associated with earning an MBA—often MBAs lose more in opportunity costs. Attending a full-time MBA program means not working for a couple of years, and two years of lost income. This is why it is important for applicants to be sure an MBA will help advance their career in one way or another.
But, there are benefits …
Two of the strongest reasons for obtaining an MBA include making a complete career change, or because the specific job one is looking for absolutely requires the degree. For those seeking a career change, the summer internship between the first and second year provides crucial experience in the field the MBA student is looking to transition into. In addition, if performance at the internship is strong, there is a chance the internship could turn into a job opportunity with the company down the road.
Another benefit of an MBA degree is the ability to figure out which field is an appropriate fit. People may enter business school hoping to make a career change, yet not quite know which career field they want to pursue. Business school is a great place to learn from a variety of different people in different fields, who can provide a picture of what careers in various fields may look like. Career counselors, students, and professors can all help answer questions and help someone decide which career path may be best.
In addition, networking is a key part of attending an MBA program. As the common saying goes “your network is your net worth.” The people attending MBA programs are likely to hold top positions in strong companies down the road. These connections lead to job opportunities in the future. It is important to build a strong network while in business school, but it is also important to maintain that network after graduation.
All in all, earning an MBA is undoubtedly expansive. However, there are a variety of situations where the degree is well worth the cost. When deciding whether earning an MBA is worth the cost of time and money, it is important for potential applicants to lay out all costs associated with the degree and all ways the degree could be beneficial. An MBA degree is a serious investment and should be treated as such.
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