Ten years ago, I used to tell candidates that an MBA was a great investment, regardless of which program they went into, as long as they had a general idea of where they wanted to take their career. Today, I cannot state that belief anymore. In fact, I tell candidates that if they want an MBA, then go to one of the top five schools: Wharton, Harvard, Stanford, MIT, and Kellogg. If they cannot get into one of these schools, then don’t even go to another school and just saw your own head off ASAP. The return on investment is just not there.
I’ve heard the same thing. If going to the University of Texas (for me, a Texan) will cost 40k, and going to Harvard costs 100k (for two years) then my Harvard degree will have to pay me 2.5x as much.
Actually, once you factor in nondeductible student loan interest, Harvard’s ROI would be even lower still. (60,000 for 30 years at 6.5 percent is probably a 400/month payment, or about 5k per year.)
ROI is maybe not the best calculation. For instance, if you spend $200k for uppity MBA and make $4 million in your career, ROI is 20x. However, you gained $3.8 million. If you spend $100k for cheapo school but make $2.5 million, you make 25x but that’s only $2.4 million. I’d rather have the first one.
Of course, there are also other considerations, like maybe if you are top-5 material, you can make a lot of money even without business school, etc.