Is an MBA Worth It? The ROI of an MBA

Grads report raises and other benefits of earning an MBA. But with the program's high cost, when does it pay off?
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Lyss Welding
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Editor & Writer

Lyss Welding is a higher education analyst and senior editor for BestColleges who specializes in translating massive data sets and finding statistics that matter to students. Lyss has worked in academic research, curriculum design, and program evalua...
Updated on June 12, 2023
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Reece Johnson
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Reece Johnson is the editorial director for news and data. He writes about the future of work and higher education, student political activism, and expanding educational opportunities. Reece holds a master's degree from Columbia University and a bach...
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Data Summary

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    Getting an MBA is generally linked to higher earnings, potentially boosting salaries by as much as 50%.[1]
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    Business school graduates are also in demand. In 2022, 86% were employed upon graduation.[2]
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    However, seeing the return on your investment in an MBA may take 6-9 years.
  • Check
    When choosing a program, it's important to consider your desired career path plus your prospective school's specialties, culture, and reputation.

Master of business administration (MBA) programs provide opportunities for students to learn key business leadership skills while growing their professional networks. But they don't come cheap.

The average MBA costs close to $55,000, and top schools can run students over $120,000 per year. If you're considering an MBA, you'll want to know if that investment will pay off.

This report explores the data on an MBA's return on investment (ROI). We'll also cover the pros and cons of the degree to help you decide the next steps in your education and, ultimately, your career.

Should I Get an MBA? Pros and Cons

Deciding whether an MBA is worth it for you depends on your circumstances and goals. But hard data can help inform your decision, regardless. Consider these risks and benefits.

Pro: Earning an MBA may increase your salary, often significantly.

Getting an MBA is generally linked to higher earnings.

In 2022, the National Association of Colleges and Employers (NACE) surveyed people who had graduated in the past six months. People fresh out of an MBA program made a median salary of roughly $84,700.

Those who had just graduated with a bachelor's in business administration (BBA) made starting salaries of about $56,400.Note Reference [1] That's a 50% pay bump or a difference of over $28,000.

That's great for career starters. But what if you completed your bachelor's years ago and started growing your career and income? You still stand to benefit from earning an MBA.

According to a 2022 survey of full-time MBA graduates produced by the Graduate Management Admission Council (GMAC), the median salary increase for recent MBA graduates worldwide was 29%. Graduates of North American programs experienced a 50% hike in compensation after earning the degree.Note Reference [2]

Pro: MBA grads are in demand.

Of course, to get paid, you need to get hired. Fortunately for prospective MBA students, GMAC's survey found that 86% of business school graduates were employed upon graduation in 2022.Note Reference [2]

GMAC also surveyed corporate recruiters and staffing firms about their demand for business school graduates. Worldwide, 63% of respondents anticipate that the hiring demand for business school graduates will increase in the next five years.[3]

In the U.S., 46% of recruiters expect the demand to rise, 51% believe it will remain stable, and just 3% think it will shrink.Note Reference [3]

Pro: MBA programs may help you develop the skills and network to fast-track your success.

Attending business school offers the opportunity to connect with hundreds of fellow students and take advantage of robust alumni networks. Harvard Business School, for example, has 89,000 alumni across 173 countries.[4]

The combination of income, demand, and network can be powerful in more ways than one. In another GMAC survey, alumni of graduate business programs reported the following outcomes:[5]

  • 87% said their degree increased their employability.
  • 77% said their degree increased their earning power.
  • 72% said it paid enough to support their desired lifestyle.
  • 66% said it provided them with greater job security.

The number one benefit from receiving my MBA was gaining effective leadership skills to compete worldwide, said Paula Fontana, MBA, interim president of the National Black MBA Association. Without my MBA, it would have taken many more years of experience to accomplish what the MBA provided in two.

Popular Online MBA Programs

Learn about start dates, transferring credits, availability of financial aid, and more by contacting the universities below.

Con: Not every business career requires an MBA.

While MBAs have their benefits, an advanced degree isn't always necessary to pursue a career in business. Consider:

  • Just 23% of business owners have a graduate degree, such as an MBA.
  • About half of North American CEOs in large companies (54%) have an MBA.[6]

Also, while many top consulting firms hire MBA grads, there are other ways to become a consultant. For example, you can become certified in project management, human resources, supply chain management, or another field.

Con: Earning an MBA has its costs — and not just tuition.

Tuition and related costs vary widely by program. Harvard's Business School will run you almost $113,000 per year — a whopping $226,000 in total.[7] Meanwhile, the average part-time online program costs about $15,000 per year and may take 3-4 years to complete.

Keep in mind, if you're taking time off from work to complete your program, there's an opportunity cost too. For up to two years, you're not learning on the job, climbing the organizational ladder, or making money.

Con: MBA costs can turn into student loan debt.

According to the National Center for Education Statistics, about 44% of MBA students took out student loans for their degrees in the 2015-2016 school year.[8]

The average student loan debt for an MBA was $50,100.8 For reference, in today's dollars, that's about $64,000.[9]

All this is to say that you should calculate your costs and likely debt — and think realistically about your return on investment —before committing to a program.

The ROI of an MBA: Deeper Dive

The idea of ROI is that you know you'll assume some costs — maybe even great costs. But those costs should pay for themselves down the road. So, when does having an MBA pay off? We crunched the numbers and found different results for different situations.

Early Career

Recall the NACE study that found that people who recently completed an MBA program earned about 50% more than people fresh out of a bachelor's program in business administration (BBA).Note Reference [1]

If you've just graduated from a BBA program and you continue school for another two years to earn your MBA, it would take you six years to recoup your initial investment — including program cost and lost salary.

What about opportunity cost? Now, let's say that whether you earned your MBA or not, your salary grew at a rate of 2% annually since you graduated. It would still take about five years and nine months to break even on your investment. Check it out in the chart below.

Mid-Career or Later

If you completed your bachelor's degree years ago, you may be making more money now than when you just graduated.

In May 2023, Payscale reported that the average salary for people with a BBA was $72,000. Payscale sources salary data from people at all stages of their careers, most of whom are in or past the middle of their careers.[10]

Payscale also reported that the average salary for MBA degree-holders was $95,000.[11] That's 32% more than all BBA degree-holders earned. While not as hefty as the pay bump for career starters, it's still significant.

What's all this mean? Earning an MBA now can still pay off, but it might take a little longer.

If you stopped earning an income to attend an MBA program full time for two years, it would take about eight years on average to see a return on your investment. (For consistency, we'll still assume 2% wage inflation each year.)

If you kept working while earning an MBA part time, it would take longer to earn your degree. But once you graduate, you would drastically cut your time to see an ROI — to around three years.

Behind the Numbers

Our calculations above:

  • Do not account for any interest that accumulates on student loan debt you may have borrowed for your undergraduate degree or MBA.
  • Do not include any bonuses you may receive at work.
  • Do account for salary inflation — we factored in a 2% annual raise whether or not you earned your MBA.

Finally, we based our time to ROI calculations on national averages. The ROI of your educational journey depends on many individual factors, like the sector you work in or the specific program you choose.

ROI of Top Online Programs

The ROI of an MBA partly depends on where you complete your degree. Different schools have different costs and different salary outcomes for graduates.

Georgetown University's Center for Education and the Workforce estimated an ROI value for master's programs in business administration, management, and operations, relying on data such as students' monthly earnings and average debt payments.[12]

Here's how our top online MBA programs stack up based on Georgetown's report:

ROI for BestColleges Top Online MBA Programs
School Annual Earnings Annual Earnings Net of Debt Payment
Rice University (Jones) $128,400 $122,400
University of Southern California (Marshall) $130,800 $120,000
Johns Hopkins University (Carey) $106,800 $100,800
Villanova University $109,200 $103,200
University of North Carolina, Chapel Hill (Kenan-Flagler) $128,400 $117,600
University of Illinois Urbana-Champaign $96,000 $88,800
University of Florida (Warrington) $88,800 $82,800
Embry-Riddle Aeronautical University, Daytona Beach $75,600 $70,800
Florida International University $67,200 $60,000
Source: Georgetown University Center for Education and the WorkforceNote Reference [12]

Top-Ranked Business Schools Have Highest ROI

According to Georgetown's data, schools with the highest ROI are Ivy League institutions and other prestigious, highly selective business schools.

These schools charge higher-than-average tuition. They also provide far higher than average returns.

Top-Ranked Business Programs Have the Highest ROI
School Annual Earnings Annual Earnings Net of Debt Payment
University of Pennsylvania (Wharton) $175,200 $169,200
Northwestern University (Kellogg) $189,600 $168,000
Dartmouth University (Tuck) $166,800 $162,000
Columbia University $170,400 $160,800
Stanford University $163,200 $156,000
University of Chicago (Booth) $159,600 $148,800
University of Virginia $154,800 $144,000
Yale University (School of Management) $147,600 $140,400
Duke University (Fuqua) $147,600 $135,600
University of Michigan-Ann Arbor $140,400 $133,200
Source: Georgetown University Center for Education and the WorkforceNote Reference [12]

Ask an Expert

Does School Prestige Really Matter?

I believe the main thing that school prestige provides is access to a stronger network, which ultimately leads to a higher starting salary, Fontana said.

However, prestige is far from the only consideration to keep in mind when deciding on an MBA program.

I would counsel those interested in pursuing an MBA to check for a culture match over prestige, Fontana said. You learn as much from your peers as you do your professors, so you want to ensure that you will enjoy your time at the institution. ... The power of the network, how alumni engage with students, should also be part of the culture you evaluate.

Popular Online Master's in Business Programs

Learn about start dates, transferring credits, availability of financial aid, and more by contacting the universities below.

Takeaway: Deciding on a Program Matters

Earning an MBA can positively impact your paycheck and many other aspects of your career, but choosing the right program matters.

Search for programs with active alumni networks that can demonstrate evidence of high value for graduates in terms of employment rates and starting salaries.

You can also find scholarships for MBA programs. Fontana received a scholarship from the University of Georgia for her MBA. So, she said, the ROI was immediate.

Finally, you may also lower your opportunity cost by earning your MBA part time or through an accelerated program, such as a mini MBA. After all, flexible, faster, and more affordable options are the future of the MBA. is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

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