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What Is the ROI of an MBA?

300% ROI: after 3 years of post-grad work for online MBA grads

Graduates of online MBA programs often see a quick return on their investment. They recoup the cost of the degree, and more, within a few years of earning it, as companies offer higher salaries to MBA graduates, according to several surveys. These surveys also show a strong and growing job market for MBA graduates.

Students can achieve an ROI on an MBA relatively quickly because they can continue to work while pursuing the degree, which means they do not have to consider making up lost wages when calculating ROI. Being able to continue a career while pursuing the degree also makes it possible for some students to pay their tuition without relying on burdensome student loans.

Something else that can help keep tuition low, making the return on investment even better, is a program that offers in-state tuition rates. Texas A&M-Corpus Christi, for example, offers reduced in-state tuition to MBA students from Texas — even for students in its online program.

The Path to ROI on an MBA

Graduates of professional MBA programs, including online MBA programs, report, on average, that they recoup their investment in two and a half years, according to the Graduate Management Admission Council’s 2016 Alumni Perspectives Survey Report. The Council is the organization that administers the Graduate Management Admission Test (GMAT).

The GMAC study also found a median return on investment of nearly 300 percent for graduates of online MBA programs after three years of post-degree work, with a median three-year boost in base salary of about $30,000.

Longer term, the survey reports ongoing financial advantages and satisfaction for MBA graduates. As of the completion of the survey, 92 percent of respondents were employed — 31 percent in senior positions and nearly 20 percent at the executive level. The GMAC survey also found that MBA graduates earn a median of $2.5 million, cumulatively, in base salary alone, over the 20 years following their graduation.

Another study by compensation software firm PayScale on the lifetime earnings potential for people with various college degrees reports that some graduates with MBAs earn $90,000 or more per year within five years of graduating. This survey also found that the very lowest salary MBA alumni can expect to earn in any industry within the first five years following graduation is $49,000.

The job market is also strong for MBA graduates. A global survey of corporate recruiters in mid-2015 revealed that demand was extremely high for MBAs; 92 percent of companies in the United States reported planning to hire MBA graduates within the year, a 12 percent increase from the previous year. This survey, conducted by MBA Career Services & Employer Alliance and the European Foundation for Management Development, also found rising starting salaries for MBA graduates — and a median starting base salary for MBAs in the U.S. of $100,000, up $5,000 from the previous year.

Other Advantages

Online MBA program graduates also report other benefits, such as improved job satisfaction and being better prepared for higher-level work. More than 90 percent of alumni who participated in the GMAC survey, for example, said that not only was their graduate management education financially rewarding, it was personally rewarding as well. 89 percent said their advanced degrees are professionally rewarding beyond what they earn, including higher overall job satisfaction. Nearly 75 percent of those who responded to the GMAC survey also estimated they were seeing faster rates of promotion than they would have if they had not earned an MBA.

The ROI of an MBA, particularly from an online program, often exceeds the cost of the program, and earning an MBA online can also lead to higher job satisfaction and faster career advancement.

Learn more about the TAMUCC online MBA program.


Sources:

GMAC 2016 Alumni Perspectives Survey Report

Payscale.com: Lifetime Earnings of College Degrees

Poets & Quants: MBA Job Market Reaches All-Time High


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