jessica83 wrote:
For simplicity's sake, let's assume that you don't want to be an IB "king of the universe", in which case going to an elite school would be the only option.
If you look at the elite schools, their average starting salary hovers around $100,000. From near elite down to near elite frontier the average starting salary is around $85-90,000. Let's say $88,000 just to split the difference. Placement rates at the lower ranked schools can be just as high as the elite schools. For example Rice has something like a 97% placement rate. Minnesota's placement rate is around the same. Assuming you are "average" and will make the average starting salary, in my opinion it makes perfect sense to go to the lower ranked school with a full ride.
If you go to an elite school with no scholarship, you will have to shoulder around $100,000 in debt after graduating. Taking 10 years to repay the loan at 8.25% interest, you will be paying out around $15,000 a year in loans, putting your salary right at the level of the near elite or lower graduate. In 10 years, after the loan is repaid, the name of the school on your resume will carry considerably less weight. In those 10 years, a lot can happen. Maybe the graduate from the lower ranked school can bust their hump and work their way into a high level position with other elite school graduates. Maybe the elite graduate will get fired. Who knows? Since the MBA's brand name depreciates severely after a few years out of school, why not take the bird in hand (scholarship) now? Taking the loan payments into account and assuming everyone is "average", the salaries of the elite school graduate with no scholarship and the lower ranked school graduate with a full scholarship are the same for the first few years after graduation. After that, it is up to the individual to make their own way by performing at a high level at their job.
I agree with gmatclb and RR that you can't just take the numbers like that; but if you are going to point to numbers you should try to get them right. According to US News average salaries at elites are above $110k (Berkeley, NYU, Michigan, Darden, and Cornell are all above this mark); not the 100k that you point out. Difference in starting salary is probably about $20-30k on average over near elites; and given the greater opportunity stronger alumni networks at the better schools, the difference should persist if not increase over time. The other consideration is that at the elite and ultra-elite schools, you have the option of going for one of the higher paying jobs if you change your mind.
Look, as I stated above I think that the near elite schools are definitely worth the time and money you invest in them - especially if you get a steep discount (scholarship). I have no doubt that most people at these schools get good jobs. The difference at an elite school is that you'll have a lot more say into what job you actually take, in terms of job function, location, role, etc. At a lower ranked school you'll have fewer options and will more likely take what is available. Say I'm interested in a job in strategy in Boston (I'm not, but just pretend); I'm not sure if I'd be super happy if I had to take a job in supply chain management job in Cleveland, even at the same pay.