Over the past five years, there has been an increasing push to devalue the MBA program due to its rising cost and the declining enrollment numbers.
It’s no secret that professional degrees are quickly becoming out of reach for many Americans, and outstanding student loans rise to astronomical numbers.
If you’re curious, the outstanding federal student loan debt is around $1.5 trillion. That’s a significant increase from the 2017 numbers of $1.34 trillion. With the average $150,000 bill attached to a two-year MBA program in a top US school, the MBA’s future seemed dismal.
Previous expert opinions
In recent history (as late as March of 2020), the resounding theme was secondary education was becoming far too expensive and not worth the cost.
In March of 2020, Paul Bodine, the founder and president of Admitify, told Poets & Quants the MBA remains “overpriced.” He further stated, “it’s not as compelling as it used to be, and there are arguably cheaper ways to get at least some of the same benefit.”
In March of 2020, Betsy Massar, the CEO and founder of Master Admissions, told Poets & Quants, “Admissions officers [for MBA programs] are probably going to over-admit in round 3 because they won’t be able to fill seats from the students they admitted in Round 1 & 2” referring to the projected decline in enrollment.
Experts are changing their stance on the MBA
Now, less than a year later, educators and experts are changing their tune.
Forbes recently reported about the shocking increase in applications for MBA programs in the top 25 business schools. The increase is so significant, top schools are seeing a 22.6% increase in applications, which is leading to larger class sizes surpassing record levels.
Danielle Richie, the senior associate director of MBA admissions at Kenan-Flagler, stated, “We increased the size of the class because we had so many strong, quality candidates that we really wanted to build a diverse class out of the increased pool.” She went on to say, “it’s definitely one for the books.”
When most experts felt the pandemic would significantly hurt expensive programs like the MBA, the opposite is true.
Experts weigh in
Siqi Mou, the successful CEO of HelloAva stated, “I would say the advantage of coming to one of these relatively prestigious business schools is that you have a lot of opportunities that are open to you. You can go back into finance or consulting types of jobs, or you can also start something yourself.”
Bruce Bachenheimer, a professor of management at the Lubin School of Business, told USNews, “project-based learning activities in MBA courses allow students to practice solving real business problems. Ultimately, this can help students become more creative thinkers, and this type of education tends to have a lasting impact.”
Bachenheimer continued, “An MBA can be much more than the knowledge and skills acquired through coursework; it can truly expand you and your world.” It’s apparent by the significant increase in MBA enrollment that students believe the MBA program is still alive and relevant.
MBA graduates are seeing a significant salary increase
Poets & Quants wrote an article about the average increase MBA graduates see in their annual salaries. During their case study, they found average salary increases of up to 63% in specific industries.
Specific schools reported their graduate salary increases, ranging from schools in London to those in the United States. Carnegie Mellon University reported an average salary increase of $54,728 for pre-MBA salaries to post-MBA salaries.
Imperial College Business School in London reported an average salary increase of $58,360 by comparing pre-MBA salaries to alumni post-MBA salaries.
It’s apparent the pandemic has pushed students and employees to make themselves more valuable by pursuing further education. It seems COVID has shown how fragile the economy and we as humans really are.
A new push for increasing skillsets and self-improvement has taken center stage – and the MBA program is one of the beneficiaries.