Is an MBA worth it? This is the age-old question that every prospective business student asks. The issue of whether higher educational degrees are worth how much they cost has become a great debate, especially with more and more students staying in school longer in response to the poor economy. It’s easy to see how a student aspiring for career advancement and a higher salary might view an MBA as the “next logical step.” However, at over $50,000 a year in tuition, prospective MBA candidates would be wise to evaluate if the investment in their time and money will pay off.
Students weighing the pros and cons of an MBA require information that is readily accessible. NerdWallet recently developed a tool to help students compare MBA schools, collecting and standardizing data from the top business programs in the country. The tool focuses on self-reported employment and salary data that was sourced directly from the schools. Over the course of developing this resource, an overwhelming 400 categories were identified, due to each school reporting data in its own unique way. While many of the top schools provide detailed data online, the quality and amount of data quickly deteriorates beyond the top-tier schools. Prospective MBA students would greatly benefit from information that is transparent, standardized, and accessible across all MBA programs.
This issue is not limited to just business schools. Other advanced degree programs have come under intense scrutiny over their published employment facts, particularly law schools. Earlier this year, a group of young lawyers sued their schools for inflating employment data. Law school graduates have generally found it more difficult to find employment, particularly within the larger, more lucrative law firms. With nationwide law school applications dropping 16 percent in the past year alone, questions have spurred over the value of a law degree. In turn, the American Bar Association is enacting stricter reporting guidelines for law schools on employment and placement statistics.
Must the same happen in the MBA field before change in employment transparency takes place? The way employment reporting is now in the MBA arena, it’s easy to see how a student can feel overwhelmed in their decision process. Students could benefit from a standardized reporting guideline similar to that of law schools:
- An established set of standardized categories
- Overall employment data
- Average salaries and placement by standardized categories
- Guidelines for collecting and calculating statistics
With tuition continuing to increase and student debt at record levels, it is imperative to provide students with the best information. Increased transparency will empower students to more accurately determine whether an MBA is worthwhile and make the best monetary investment for their future.
Rachel Ny is a strategy analyst for the Education and Financial Literacy team for NerdWallet, a personal finance website dedicated to bringing unbiased advice on students finances, small business checking, and scholarship searches.