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What is the Return on Investment for an MBA Program Abroad?

Wednesday, January 31, 2018

The question that is uppermost for every student aspiring to pursue an MBA in a top college would be: What is the return on the investment for an MBA program? Is an MBA worth the money you spend? Will you get a high paying job that makes up for the tuition cost of a prestigious MBA degree abroad?

By Vibha Kagzi, Founder, Reachivy.com

Before we get number crunching, let’s understand the meaning of the word “Return on Investment.” It is myopic to view simply the financial returns of a study abroad plan. While I agree that there has to be a monetary benefit of education overseas, we cannot miss out on the value add that an MBA program brings to a student. And these qualities are intangible and hence it is difficult to put a price tag on it. So what are these benefits?

Non-Monetary Benefits:
A Globalized Outlook to Problem Solving
There have been numerous evidences of managers who developed a holistic understanding of business problems just because they did a short course or a two-year management program abroad. You learn how to solve problems with an international perspective, by utilizing the learning of a diverse classroom.

Enhanced Communication Skills and Personality Development
The dynamic interaction you would be exposed to in an international school pushes you to upgrade your communication skills. You develop the confidence and leadership skills by engaging with people around the world. MBAs who have studied abroad have an excellent command over their communication skills which teaches them to speak and listen to a diverse population.

Networking With Peer Group From Across the World
By the time you have graduated, your classmates would move to distant parts of the world. As alumni of the same school, you will find many opportunities to network, explore business opportunity, and grow your market in new geographies. Not just that, you get access to mentors who are themselves distinguished, celebrated personalities with a tremendously successful track record. You get to learn and leverage yourself with the help of these people.

Monetary Benefits
What’s the Cost of an MBA in a Top School Abroad?

MBA program in a top 20 business school abroad could cost you around $45,000 to $80,000 a year, but most of the programs cost between $55,000 and $68,000 a year. In the US, although the cost of an MBA degree can vary, the average tuition for a two-year MBA program exceeds $60,000. If you attend one of the top business schools in the US, you can expect to pay as much as $100,000 or more in tuition and fees.

Of course, these costs don’t take into consideration your opportunity to earn scholarship, grants, or financial aid. While the actual numbers look grim, most students manage to ‘earn while learning’ through campus jobs, internships, and other working opportunities too.

But monetary analysis is incomplete without evaluating the salaries that MBA’s from top schools abroad draw. According to the latest survey done by US News, 90% of job-seeking MBAs from top schools found jobs within three months after graduation. Graduates who were employed within three months of receiving a degree earned an average of more than $100,000. MBA graduates from top schools such as Stanford, Harvard, and Wharton earned an average salary and bonus of $164,000. According to the annual survey by Graduate Management Admissions Council (GMAC), the median starting salary for business school graduates in the U.S. hit $110,000 for the first time in 2017, which is a jump of $10,000 over 2015’s starting salary.

However, there are many caveats to these figures. The salary will depend on several factors such as:

Where you seek the job, i.e., geographic location, since the cost of living varies depending on the city and state of employment.
What is the field or industry you choose to pursue an MBA? Salary offers vary widely between the government or non-profit sector and private sector industries.
What’s your job function: whether you choose accounting, human resources, or sales can affect your earnings, with those involved in management commanding top dollar.

What is the RoI Over a Long Period of Time?
Most B-school alumni do extremely well financially throughout their careers. They end up in top positions globally in multinationals, heading important divisions of conglomerates, and even becoming successful entrepreneurs.

An MBA program abroad may seem expensive, but it is a worthwhile investment if you seek to pursue a lucrative career in a high-demand role.

The writer is a study abroad and career advisory. Vibha holds an MBA from Harvard Business School and a Bachelors from Carnegie Mellon University.

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