B-School Graduates Will Have To Wait Longer To Pay Back Degree

January 12th, 2011 - By TheEditor

By Brittany Hutson

The lingering effects of the recession just keep on coming; recently, Bloomberg Businessweek reported that compared to 2008 graduates of MBA programs, 2010 graduates will have to wait an additional year to see a return on their investment due to higher tuition costs and lower starting salaries post-graduation.

Though this may not come as a complete shock, it is still discouraging to hear that those who seek additional education will have to wait longer than what may have originally been intended to pay back their debt. Bloomberg Businessweek calculated two years ago that it would take members of the MBA Class of 2008 an average of 5.6 years to recoup their MBA investment. For the Class of 2010, the average jumped to 6.5 years. The increase is a result of salaries post-MBA being down 6 percent from the 2008 average, while pre-MBA salaries were higher. Then of course, there is the increase in the overall cost to attend B-school.

Not surprisingly, graduates will take longer to recoup the costs associated with their degree at schools considered to be “top U.S. programs,” which include Harvard Business School and the University of Chicago’s Booth School of Business. State schools such as Texas A&M’s Mays Business School and Michigan State Broad College of Business are the best option, according to Businessweek. For example, Texas A&M’s ROI is just under three and a half years—the benefit here is that their program is relatively shorter at just a year and a half so costs are lower.

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