For argument's sake, lets say:

• $100k / year salary
• 8% 401k matching
• $7500 / year tuition assistance by employer
• 5.5 years full time experience at top defense contractor
• 720 GMAT
• Computer Engineering undergrad with 3.14 GPA

If you were this person (which in this case is me, obviously), do you think it's worth pursuing an MBA from a full time program and taking the debt that comes with it, or doing a part time degree? Potentially an online one from say UNC, Carnegie-Melon or Indiana. Yes, I know online MBAs are looked down upon, but those are good schools and the degree, at least on paper, is the same. Plus there'd be substantially less debt involved. But I also understand the limitations of an online degree, regardless of the school, and the upside of that full time programs can offer.

I decided to go ahead and get my MBA over Thanksgiving, so I took the GMAT today. Now, after getting my score, I'm wondering if I'm selling myself short, but also struggling with the lost wages and taking on more debt (my wife is in PA school right now and graduates in May). I already make a decent enough salary that should continue to rise.

Thoughts? Basically (at least) $230k in lost wages + 401k + tuition assistance + minimal debt versus the cost/benefit of a full time program.

Do a professional night/weekend program from a reputable top/mid-tier school. Best of both options. There is no guaranteed return on the back side that would make the math add up.

Some key info that you're missing from the calculation are:

• What do you hope to accomplish with the MBA (whether it be FT or PT)? Career change? Consulting?
• What does your current career path look like? If you walk away from your current path for 2yrs and start over, what are you potentially giving up? (i.e. opportunity cost is more than the lost salary, incentive, 401k, and benefits for the period you are in school if you go FT).

My $0.02: unless it's a Top 10 school, FT is hard to justify on the math alone. For PT, you only mentioned online options, are you not in a metro with Professional MBA options? (e.g. Cox and McCombs in Dallas, Jones and McCombs in Houston, etc)

I'm in almost the exact same scenario, except 3 years experience and I haven't taken the GMAT.

IMO, do the online or night/weekend program. You continue to earn $$$, and you graduate with an MBA. It's a win-win.

Also, don't get caught up in the "Top 10" BS.

Football&Finance said:

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Some key info that you're missing from the calculation are:

• What do you hope to accomplish with the MBA (whether it be FT or PT)? Career change? Consulting?
• What does your current career path look like? If you walk away from your current path for 2yrs and start over, what are you potentially giving up? (i.e. opportunity cost is more than the lost salary, incentive, 401k, and benefits for the period you are in school if you go FT).

My $0.02: unless it's a Top 10 school, FT is hard to justify on the math alone. For PT, you only mentioned online options, are you not in a metro with Professional MBA options? (e.g. Cox and McCombs in Dallas, Jones and McCombs in Houston, etc)

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With the amount of travel I'm expecting in the next 2 years, I think a PT on campus option would be very difficult, if not downright impossible.

As for the rest, my current role/path is a technical in production operations and I'm ready to move into a more to the business side. I don't know if that qualifies as a full career change. My current position is akin to that of an internal consultant of sorts, so I don't mind that the consulting space but not sure I'd do it as a career. My father is an entrepreneur and that's where I've always seen my career going, whether that means returning to his company or starting my own. I just didn't want to do that right out of school, I guess because I wanted to "prove" myself first.

I'm not sure how to quantify what I'd be giving up, to be honest. If I had to guess, my company would likely leave me in the same role that I'm in now for the next couple of years, except be responsible for more facilities. Reason being is that we have a lot of big projects going on that I'm involved with and they've approached me with potentially putting me in a retention program. So I've already had some concerns that I'm becoming too locked into this role and have been considering looking to transfer to a different business unit. Question is when. But I'm also able to consistently grade out as a top performer. Overall, I'd summarize it by saying that I have a good role that suits me well, and I love my work group, but it will have to come to an end eventually.

IceCream14 said:

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I'm in almost the exact same scenario, except 3 years experience and I haven't taken the GMAT.

IMO, do the online or night/weekend program. You continue to earn $$$, and you graduate with an MBA. It's a win-win.

Also, don't get caught up in the "Top 10" BS.

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I don't know that I care that much about the "top 10," but I have contemplated taking a swing at some of the M7.

I get a lot of people do ROI's on MBA's but a couple of things that get left out...

1) it's a hell of a lot of fun for 2 years. (Reliving undergrad with money)
2) it gives you flexibility to switch careers well into the future. Since b-school, i have done finance, consulting, corp strategy, operations and marketing. That doesn't happen with my undergrad finance degree alone. I would be stuck in a finance track (but maybe making similar money)

Most attempts at ROI only capture 5-10 years income after school. At least for the top 5, it's not about income. It's about ownership and equity. Went to b-school with several people who have tens of millions of net worth (made on their own). Could they have done it without b-school? Almost no way to know.

If you are going solely for the ROI, night/weekend probably makes sense. However there are many non-financial benefits to be had with a FT program.

One of the magazines/rankings does 20 years cumulative earnings including all forms of comp. look at that for ROI

FT is really good for career switching. I am applying for full time right now and most of us switch to entirely different fields. Even at top programs most people are making on avg 80k before and ~140k after. As for full time if you have good credentials Rice gives out hefty scholarships. With your salary the payback will be much longer though but it will allow you to switch to finance, pure consulting, tech, or consumer products. PT is probably more geared towards moving up in the same role or a switch at the same job. It just depends what you want to do but if you're getting into a top 25 full time mba program you should be okay financially in the long run but you will have to make the huge investment and give up ~300k now.

I was in a similar position back in 2005.

• 2 years out of undergrad with a degree in Computer Engineering
• Worked for a large aerospace company with similar benefits to yours. Only major difference was that they paid for 100% of part time degrees
• I knew I didn't want to be an engineer for the rest of my life but didn't quite know what I really wanted to do.
• 3.5 GPA from A&M with a 740 GMAT

I'd like to think I could have made it into most of the top programs in the country but I never bothered applying. Instead, I went to school at night for 3 years at USC (lived in LA at the time) and had my company pay for the entire thing. Promptly left once I graduated, moved back to Texas, and went into management consulting. I've since left and now work in corporate america.

A few thoughts looking back on it now taking your comments into perspective:

• Regardless of the part time vs. full time equation, my post MBA career path would have more than justified the ROI of taking out the debt. It was nice to never have to worry about the that!
• Out of my classmates that were in a similar situation (company sponsored), we typically fell into two categories. Some of us left our sponsors and went the typical MBA path (consulting, banking, entrepreneurship, etc). Those that stayed haven't done much. They may have a promotion or two but their success likely wouldn't have funded paying for school out of pocket.
• Finding a job out of a part time program is way harder than out of full time programs. While it can be done (I'm proof), companies focus on full time programs for their hiring. It's purely a numbers game to them as they are fishing in the stocked ponds.
• School reputation matters! It matters to me as a hiring manager and it has mattered to a lot of the execs I've worked with. While many want to downplay rank, a top 10 MBA will pay for itself unless you a complete slob. MBAs in the next 50 or so spots can fit the bill too if put in the time and effort. Beyond that, I personally wonder if the degree is really worth the time.

Quote:

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Potentially an online one from say UNC, Carnegie-Melon or Indiana. Yes, I know online MBAs are looked down upon, but those are good schools and the degree, at least on paper, is the same.

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I just re-read your OP. As fair warning, I would really think twice about doing an MBA if you plan to use this as a rationalization.

The generalization that MBA degrees are worthless is true. The education isn't particularly novel and the schools are only in it for the money (it's a profit center).

People who hire MBAs do so for a few reasons:
- They want a pool of prequalified candidates. This is provided by the top 10 schools. Not so much by the others.
- They went to that school and want to hire alums.
- They were introduced through the school's network.

If a MBA is hired for any other reason, I would argue that the job offer had nothing to do with the degree.

I'm glad this thread was started, as I will be studying for the GMAT next year and plan to take it sometime during 2017.

By mid-next year, I will have 3 years of full time work under my belt. At my current O&G company, they pay for 100% of tuition for online or even rotating weekend part time classes (McCombs in Houston).

However, and I'm not sure if this is the case everywhere, my colleagues with MBA's say I would have to commit 3 more years with my company if they paid for the whole thing. That's my issue.

Say if I graduated but got a different job offer at a different company in consulting (I'm currently in finance), couldn't I just use my commitment as leverage? I'm not sure of the penalties of breaking the 3 year commitment, but I was wondering if anybody has been in this situation and if their company went after them when they took another job.

Thanks for the replies. Lots to reply to, but since I can't sleep:

- I would not say that one quote summarizes my views at all. My point is that on a resume the degree is the same whether it's online or not, and yes there is substantial value to having a name MBA on your resume. Companies are more and more global, so online isn't as big of a deal anymore either. The majority of my meetings are via Skype nowadays.

- I also understand the value to the networking for an MBA. I'll give an anecdotal example: my friend who worked for the same employer went to SMU part time program. After getting out, he had a substantial offer (annual comp at least $150k if not quite a bit more) from a different company that he took. He was able to gain that through on campus recruiters. When that wasn't working out, it wasn't his SMU network that got him his next job, it was his connection with me. But again it was a substantially paying job that he wouldn't have gotten had he not had an MBA on his resume, and SMU's name/brand was a part of that even though they aren't a top 10 school.

So to get the most out of an MBA, I agree that school name/brand matters and that leaving the current employer is going to be a better route. I disagree that only the "top 10" have brand value. UNC is a very well known school nationally but just outside the top 10. Plus there are many schools like SMU and Rice that have regional brand value.

As another an anecdotal example, a different friend from the same employer did the University of Florida's online program and I believe has not been satisfied with the value. I'll have to ask why. Perhaps because he stayed with the same company. But he was in a rural area where online was really the only option for PT. Regardless, that's an example that gives me some pause with an online program. While not as prestigious as say UNC, UF is a name most people recognize and I'm pretty sure their program requires face to face interaction too, so not purely online (the others aren't either). Yet he hasn't been able to get what he was hoping out of his degree from what I understand. Again, I'll have to ask why though.

In any case, I appreciate your feedback even if I disagree with some of your points. But I do agree that name matters, either regionally or nationally, and the most value career wise would not be to try to use an MBA only to move up in my current company, which is where an online degree will struggle (networking). Not that it hurts to move up, but probably better bang for your buck, so to speak, to switch companies at least initially. I've heard quite a few stories about people leaving my current company only to come back at a substantially higher role a few years later, higher than they would have been able to had they stayed the full time. And that's not even including and MBA into the mix.

Everything aero has said is spot on.

If you want to check a box and stay at your same company, the school doesn't matter as much. But it still matters.

Maybe one day in the future getting an online will be the same as getting a class based mba but thst time isn't now. You won't be as recruited, you won't have as stong of a network and people will feel cheated/lied to when they find out that you didn't go to a school but went to the online program.

Even at McCombs there was a recruiting hierarchy. Full time, TEMBA (on campus evening 3 year), DFW/Houston programs. In that order. The executive was kind of its own thing since vast majority didn't go through on campus recruiting. When I was applying, Rice wouldn't even let the part time people take part in the OCR process.

You will get flooded by countless peole saying "I got my mba from UT Arlington and I am now the CEO of my company. So it doesn't matter where you go, but those are the exception to the rule. It always blows me away when people will make sure their kids go to the right preschool, go to the right elementary school, move so they can go to the right high school, send them to the right undergrad school and then just say "schools don't matter" when it goes to their MBA.

Lastly, ROI is probably the worst metric to use on a decision like this. NPV is where it is at.

Thanks. I think you and Aero are kinda hitting at my dilemma. I don't mind spending the money on a FT program if it's worth it, and I don't necessarily mean ROI. It's still a pretty big pill to swallow though.

Unfortunately I'm probably well behind where I should be from a planning perspective. I've been so busy that I hadn't thought about career path enough until I had some time off over Thanksgiving. Now I'm a little stressed because I should have given FT more thought until now. So another option is that I could actually prepare for the GMAT and try to improve my score (Quant probably should have been quite a bit higher), although I think it's still pretty solid as is.

In any case, appreciate everyone's feedback, even if it means saying that I'm wrong .

I wouldn't worry about retaking you GMAT. Any school thst won't take you with a 720 isn't going to take you with a 760.

I'd would focus on finding the right schools for your goals, getting your story straight (why an mba, why now and why here) and getting the best letters of rec you can (what they say and how they know you is more important than who they are)

I say this all the time but your recruiting process started the second you decided that you were serious about getting an MBA.

Get on linked in, post a thread on a couple of boards (outdoors, politics, this one) look around your church, exgirlfriends parents, anywhere you can find someone that has the career path you want that you have even the flimsiest connection to, and reach out to them and ask if they would be willing to meet for coffee, breakfast, happy hour, etc.

"My name is Ryan and I am exploring mba opportunities. I'd love to get the insight of another Aggie into the application process and your experience in grad school and how it impacted your career. .....something something somethings"

You will be shocked at who will respond and agree to meet with you. As I mentioned on another thread, I had meetings with fortune 500 CEOs, internationally recognized legal minds, partners at consulting firms, and several sharp people from this site

What does your average person with an MBA from a Top 10 school make in annual salary?

free_mhayden said:

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What does your average person with an MBA from a Top 10 school make in annual salary?

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At what point in their career (graduation/mid career/etc.)?

Average salary at graduation on right side of table:
http://gmatclub.com/forum/all-2015-mba-rankings-99812.html

One other thing to keep in mind is that there are basically three tiers if MBA.

1. damn! You went there!?!?! These are the M7 schools and some international. You get in here, your life will change. You go. There is no question, you sy good bye to everyone and you get on a plane and go.

2. Oh. You went there. (Top 20) your life could change but it is up to you. Consider the costs and disruption to your life and family but it will probably work out well for you.

3. You went where? (Every where else)- don't expect a monetary return. But feel free to go if you think it will be fun, interesting or in some intern way,rewarding.

Duncan Idaho said:

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One other thing to keep in mind is that there are basically three tiers if MBA.

1. damn! You went there!?!?! These are the M7 schools and some international. You get in here, your life will change. You go. There is no question, you sy good bye to everyone and you get on a plane and go.

2. Oh. You went there. (Top 20) your life could change but it is up to you. Consider the costs and disruption to your life and family but it will probably work out well for you.

3. You went where? (Every where else)- don't expect a monetary return. But feel free to go if you think it will be fun, interesting or in some intern way,rewarding.

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You mention this a lot and I thank you. I think there is a pretty big gap between 1 and 2. Assuming most of us would get accepted to a 2 or 3 school I think you really have to evaluate you current career trajectory to determine if MBA is right for you.

Because of this I think I have determined that an MBA isn't really the right move for me.

However, assume i want to get some continuing education. Learn more about finance and business in general. What would you recommend?

Where are you located Ryan?

I know Rice has the weekend program where you go every other week. They also offer and extended program where you can drag it out to three or four years to better fit your schedule (and boost the amount your company can pay back).

For Getting the basic of finance it is hard to beat Khan academy.

There is a reason Porter is taught at every school.

The two biggest changed in thinking that I saw (which I will use as a proxy for the most valuable classes) were understanding that accounting is a different kind of math and not just a different vernacular

Marketing is not advertising. It is ckoser to strategy than not. The light bulb case for all of the engineers was value billing.

Not in Houston.

Duncan Idaho said:

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One other thing to keep in mind is that there are basically three tiers if MBA.

1. damn! You went there!?!?! These are the M7 schools and some international. You get in here, your life will change. You go. There is no question, you sy good bye to everyone and you get on a plane and go.

2. Oh. You went there. (Top 20) your life could change but it is up to you. Consider the costs and disruption to your life and family but it will probably work out well for you.

3. You went where? (Every where else)- don't expect a monetary return. But feel free to go if you think it will be fun, interesting or in some intern way,rewarding.

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Is the cutoff for #1 really just the M7? There are some really good schools like Dartmouth, Duke and Berkeley that aren't in that list.

Also, based on the above, I'm guessing that you would recommend at least taking a shot on the M7?

There are more. I was using the M7 as more of a short hand than a definitive list.

Yes. You should apply for at least a couple of reach schools. A lot of thier admissions is based on filling out a class demographic/professional background profile thst they want. You might be the guy with the back ground they are missing.

Ridge14 said:

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free_mhayden said:

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What does your average person with an MBA from a Top 10 school make in annual salary?

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At what point in their career (graduation/mid career/etc.)?

Average salary at graduation on right side of table:
http://gmatclub.com/forum/all-2015-mba-rankings-99812.html

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Don't think that is showing total compensation.

http://poetsandquants.com/2016/11/17/time-record-pay-stanford-mbas/

Ryan34 said:

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Ridge14 said:

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free_mhayden said:

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What does your average person with an MBA from a Top 10 school make in annual salary?

---

At what point in their career (graduation/mid career/etc.)?

Average salary at graduation on right side of table:
http://gmatclub.com/forum/all-2015-mba-rankings-99812.html

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Don't think that is showing total compensation.

http://poetsandquants.com/2016/11/17/time-record-pay-stanford-mbas/

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Good link

Reminding me to visit P&Q showed how well some schools outside of the M7, such as Ross, are doing in terms of total compensation.
http://poetsandquants.com/2016/12/10/ross-right-behind-big-three-mba-pay/

Unfortunately, I didn't get a call from Ross today - likely dinged.

Quote:

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Unfortunately, I didn't get a call from Ross today - likely dinged.

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Sorry to hear that. Ross is a great school. I've worked with quite a few Ross grads and they were all top notch. 100% agree on the schools outside the M7. I personally think there are 15 to 20 top full time MBAs that would justify their investment.

An additional element that hasn't mention mentioned are the regional strongholds. For instance, I wouldn't consider SMU, UT or Rice in the top tier of MBA programs (some will argue but they are on the border of the top 15-20 list at best). On the other hand, they will get you in nearly any door in Texas. Same goes for my alma mater USC or UCLA. They are not particularly strong here in Texas but would open any door in Southern California.

Where do you live?

As a hiring manager, MBAs outside of the top 10 are a dime a dozen. I see them everywhere, but that is not as defining as the right attitude of a candidate to me.

If it's s with a top school FT, I think that is legit (especially for those with non business undergrads like engineers), as it will most likely propel them in the ranks and have the roi.

All others , I would say read a book and consider being entrepreneurial, or learn to trade stocks, flip real estate, etc. If you're going for increasing income, be creative outside of a middle tier MBA.

Just now seeing this thread. I've been looking into the FT or PT MBA and am in a similar position as Ryan just in completely different work fields. I'm not near a metro area where I could attend a UT, SMU or Rice I would either have to travel or completely move which I would rather not do for those particular programs. As Duncan has pointed out, I'm leaning more towards taking my shots at a couple of M7's and if they accept, I move! Those would be a guaranteed life changer. Maybe i'm thinking about this wrong, but I think my background is so rare for an MBA candidate that it just may be something one of the M7's feels would be interesting addition to their class. I have bachelors and masters in architecture and have passed all (7) of my state licensing exams and have 5 years work experience. They may not care at all about my background and maybe that's my way of justifying my odds of possibly being accepted to their program. Any other advice or thoughts is appreciated!

I made this same decision last year, although it was a little easier because I was in O&G and my company went under. I'm full time at an Ivy League program now and I absolutely love it. Just got a summer offer for O&G investment banking so ROI is definitely there.

It's really about where you can get in and what you want to do when you're done. If you are looking for a boost up the ladder on your current career track then PT is probably the way to go. If you want to totally change gears and/or get a highly competitive position then you should go full time if you can get into one of the elite programs. The resources they provide you and the name value on your resume do wonders.

If you want to talk a little more about it or have any questions about apps and interviews and all that pm me.

Ag2012 said:

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I made this same decision last year, although it was a little easier because I was in O&G and my company went under. I'm full time at an Ivy League program now and I absolutely love it. Just got a summer offer for O&G investment banking so ROI is definitely there.

It's really about where you can get in and what you want to do when you're done. If you are looking for a boost up the ladder on your current career track then PT is probably the way to go. If you want to totally change gears and/or get a highly competitive position then you should go full time if you can get into one of the elite programs. The resources they provide you and the name value on your resume do wonders.

If you want to talk a little more about it or have any questions about apps and interviews and all that pm me.

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Houston or NY?

Any thoughts on the culture of the firms you interviewed at/expected number of hours of work per week?

Houston

Culture is such a vague thing you really have to feel it out for yourself. Most of the Houston groups are more laid back and collegial than their NYC counterparts.

Evercore has a rep for being a sweatshop but they have solid deal flow and high quality people, Citi gets a lot of capital markets activity but junior bankers leave in droves and apparently they have an absurd pitchbook quota, Goldman prides itself on working even harder than their NYC office, the European banks have historically been really strong but are starting to lose talent because their salaries are capped by regulations, a lot of the American bulge bracket banks are instituting protected days off and other little work/life considerations but you probably end up making up for it with longer hours every other day.

All in all, investment banking hours are pretty brutal (80-100+ hrs/week) at any bank with decent deal flow.

In my opinion MBA is only worth it for a few things:
1) career change - my mentor at work was an EE from gatech that worked for TI. Hated it and went to HBS. Completely shifted into management consulting at BCG and he's now a strategy consulting partner at my firm.
2) make more monies by working a ton more and network - imho, these can only be obtained by going to TOP tier schools and seeking out employment where they recruit. By that, don't think a Rice MBA will get you in with the NYC Jewish bankers. It sure as hell will in Houston or the south. Tulane? Mazel baby.

SMU is $$$$ if you want to stay in dallas. The network alone there will allow you to stumble into unicorn piss puddles and next thing you know... your rich BSchool buddy is best friends with Tom Hicks kids or one of the Hunt family heirs and you're rolling in it.

MBAs these days, for the most part, are the echelon of high class inbreeding. Only the wealthy, well-connected, plenty of expendable income and well prepared can end up there. There are plenty of exceptions but if I had a nickel for every HBS, Kellogg, or Wharton MBA who's father father was this or that, I could spend a lifetime at nickelmania.

Duncan Idaho said:

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One other thing to keep in mind is that there are basically three tiers if MBA.

1. damn! You went there!?!?! These are the M7 schools and some international. You get in here, your life will change. You go. There is no question, you sy good bye to everyone and you get on a plane and go.

2. Oh. You went there. (Top 20) your life could change but it is up to you. Consider the costs and disruption to your life and family but it will probably work out well for you.

3. You went where? (Every where else)- don't expect a monetary return. But feel free to go if you think it will be fun, interesting or in some intern way,rewarding.

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I got my MBA 12 years ago so I might be a little dated but I completely agree with this. I see a ton of these tier 3 profit center MBAs as I'm sure many of you do. I really don't even count them at this point unless all else is equal and then I might factor it. I do not think they are worth it unless they become so numerous that it becomes the new defacto bachelor's degree. And you could argue in some cases this has almost become true so at some point degree inflation may cause me to rethink this.

For me, my hiring priorities (after leading people for 10+ years) are the following (1) Attitude (2) Experience (3) Team fit and then (3) Education level.