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Which North American MBA Programs Offer The Most Lucrative Return On Investment?

US, Canadian MBAs get $2.6m average returns after 20 years

Tue Dec 15 2015

As employers continue to value the full-time MBA program above any other graduate business qualification, MBAs can expect to quickly recoup money spent on their studies and make massive, six-figure returns.

According to the QS Return on Investment Report, MBA students at US and Canadian schools can expect to make an average return of $500,000 only 10 years after graduation and nearly $2.6 million after 20.

Based on data from 85 business schools across North America and a survey of more than 30,000 employers including Amazon and General Electric, the study calculates the value of the MBA by comparing its cost in tuition fees with the average graduate salary.

On average, MBA graduates in North America can expect to make back their MBA investment in 44 months.

MBA students in North America can expect an average salary increase of 75% on graduation, with wages going up from $52,723 pre-MBA to $91,417 thereafter.

Stanford GSB is the highest performing school in terms of return on investment — it’s the only school in North America to boast a 10 year return of over $1 million — followed by fellow business education behemoths, Harvard Business School and MIT Sloan, at just under $950,000 and $896,000, respectively.

After 20 years, a savvy Stanford MBA graduate can expect massive returns of more than $6 million; a happy Harvard grad can look forward to likely returns of over $5 million; and MBA alumni from MIT Sloan, Wharton, Chicago Booth and Columbia Business School can all expect longer-term returns above $4 million.

Business schools in the US are home to the world’s most expensive MBA programs, with QS recording average fees of more than $91,000.

With the persisting strength of the US dollar over an insecure euro, and the regional preference for one-year MBA degrees in Europe, European MBA programs offer a more affordable alternative.

Cheaper online MBA courses have also become increasingly credible and popular.

Yet for those who can afford it, the full-time MBA continues to represent value for money, with MBAs in demand and employers offering graduates highly lucrative wage packets.

“We constantly need MBAs to come in with strong domain and functional knowledge,” says Rajesh Ahuja, global talent acquisition leader for Indian IT services firm Infosys, which recruits large numbers of MBAs from schools across the globe.

On General Electric’s highly-regarded Experienced Commercial Leadership Program, which aims to transform ambitious professionals into the company’s future sales and marketing leaders, about 60% of the 88 graduates hired in 2014 were MBAs, according to the program’s director Heather Giese.

Since the early 1990s, the demand from employers for MBAs has increased at an annual rate of 15% and today, 85% of MBAs are employed within three months of graduation.

The school boasting the highest graduate employment record in the US and Canada is Chicago Booth, with an impressive 97.2%. Only nine of the 85 schools analyzed in the QS study recorded a rate of 70% or below.

As might be expected for such a career-focused degree, employment prospects for MBA graduates far surpass those of graduates from more specialized master’s degrees: MBA graduates are paid an average salary that is 63% higher.

MBA students at the Schulich School of Business in Toronto can expect the highest increase, with salaries going up by a whopping 138% on graduation.

Sixteen schools in the US and Canada reported post-MBA salaries which were double their previous level, including Ohio’s Weatherhead School of Management, Pennsylvania’s Katz Graduate School of Business, and Hult International Business School, which has campuses in cities including Boston and San Francisco.

In terms of the highest salaries on graduation, 30 schools in North America recorded an average greater than $100,000. Students from the usual suspects — Stanford, Harvard, Wharton, Berkeley Haas and MIT Sloan — can pick up their certificates, de-robe and skip away to sumptuous salaries of more than $120,000.

Just a few years after graduation, it is clear MBAs can start making some serious dollar.