The article is crammed with sad anecdotes. But when you dig into it, I'm not sure how much of this is news. Almost all the discussion is of third-tier regional schools. It was a commonplace when I was applying to business school, way back in 1999, that there wasn't much point in getting an MBA unless you could get into a top-tier school; the degree simply wouldn't repay the investment of time and money. That clearly hasn't changed, but I'm not sure there's much evidence that it's gotten worse, either--except in the sense that more people are getting degrees of questionable value.I have a bit of a prejudice against MBAs since I move in a career niche where many of my peers have them, and so, reactionary that I am (and certainly past any point of being able to go back and get an MBA) I tend to deprecate MBAs in favor of experience. (That, and there's nothing quite as annoying as a straight-out-of-B-School new hire who is convinced that "how we learned it in business school" is invariably more important to know than how things work in one's individual company.)
For graduates with minimal experience—three years or less—median pay was $53,900 in 2012, down 4.6% from 2007-08, according to an analysis conducted for The Wall Street Journal by PayScale.com. Pay fell at 62% of the 186 schools examined.It's not unusual for starting pay to fall during a weak economy. What this really highlights is what business schools rarely tell you when they're selling you on their school: students with weak experience and lower-tier degrees aren't getting the six figure salaries that people associate with an MBA. Students with more experience do better--but need the credential less. The high-paying employers that people hope to wow with their degrees don't recruit very far down the prestige ladder....
The last two decades have witnessed an aggressive expansion of graduate programs, particularly in areas like business and law. Schools love them because they're cash cows: low cost, high price. But they don't provide good value to their graduates. When young people ask me whether they should get an MBA, I give them the same advice that I got in the late 1990s: unless you can get into a top 10* (or have a very specific job that you know you can get by attending a regional program), then don't. You're too likely to end up with massive debt and no very good prospects for paying it.
Hell, I did go to a top school, and nonetheless, through a series of unfortunate events, faced a long spell of unemployment that ended when I accepted a job that left me personally rewarded, but financially somewhat desperate. And there are many, many more people in that situation whose degrees come from third-tier schools with little in the way of name recognition or alumni networks. That's why I always urge people to think very, very hard before they decide to go to professional school. It was no fun at all paying high five-figure debt on a low five-figure salary. I don't recommend the experience to anyone else.
However, prejudice aside, this point about only going to business school if one can get into one of the very top ones definitely aligns with my experience. Perhaps the only exception would be if your company is willing to pay for you to get an MBA at a local second or third tier school. If all you're having to lay out for the degree is some time and effort, getting the credential at the company's expense may be worth it to you.
3 comments:
Here at my esteemed institution, they push the "executive" MBA hard with the employees. Are we a top-tier school? I don't know, maybe.
It is a vigorous 13 month program where you basically eat, live, and breathe work and school and projects. I've seen people in the program in my department and they honestly look like walking zombies. The university does pay for part of the tuition, but it is still 10K out of pocket.
Now maybe 10K for an MBA at a perhaps top-tier school is not a bad deal, however I have not seen it pay off. The people who killed themselves for a year do not get raises, promotions or any of the other benefits you might expect at any different a rate than they would have otherwise. So they spent the money and lost a year for what exactly?
It may benefit them if they ever change jobs or institutions, but here is the paradox. The ones most likely to succumb to the pressure of the higher ups to sign up for the "prestigious" degree are also the ones least likely to ever leave.
So I say, "No thanks!"
And to completely spam your combox...
My brother did get an MBA from a definite third-tier institution. His motivation was less about a big money career and more about becoming employable. His bachelor's degree is in sports journalism. After he graduated he was stunned to find out that jobs in sports journalism are very hard to come by and usually come with a "salary" of nine dollars an hour.
He worked in the newspaper business for a couple of years but decided that if he ever wanted to get married and support children, he had to find a different career.
He decided to get an MBA at a local, regional college and the degree was a joke. The classes were easy and barely worthy of being considered college level, much less as part of an MBA program. I don't know how much money he spent on this scam of a program, but he graduated with an MBA with a focus on Human Resources.
He now has a job as a payroll specialist and makes about 35K a year. Definitely a step up from the newspaper and has room for advancement, but it isn't the big-time power and money job you might expect after getting an MBA.
I can't remember what tuition was back in 1995 (I didn't pay it), but I'm pretty sure my starting salary post-MBA was double what it would have been post-BA in liberal arts, and I probably would have recouped tuition costs, but not necessarily opportunity costs, in the first year post-grad.
BUT, this is only the case because my MBA was an accounting degree -- I started taking undergrad accounting courses my senior year, and filled out all my electives and spare hours with graduate accounting classes, and went to work as an industry accountant afterwards. Were I a marketing person or some such, there would not have been the payoff.
And while several of my non-accounting/finance business courses were in fact quite helpful, the bulk of the meat was to be had in accounting.
Based on my experience, my recommendation is to get the degree only if you actually need to learn the subjects taught, and can get a decent value for your tuition $. I recommend top-tier school if you want to work in major finance / industry, local state school (or the regional equivalent) if you want to work somewhere in your local good ol' boys network.
I agree 100% that MBA's are designed to turn you into an arrogant, incompetent, pain in the rear, and that there is definitely a hump in the post-degree period while your maturity and humanity re-develop :-).
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