- 53% feel their job is insulated from COVID as a result of having an MBA.
- 67% said their MBA improved their career/salary prospects in the way they expected.
- 66% of respondents saw results within one year.
- 53% said student debt was “worth it.”
Going to graduate school can be the first step toward fulfilling your dreams, but the decision may spur some uncertainty as well. Not all graduate degrees lead to greater professional opportunities, after all. An MBA, however, is one that often provides a much-needed career boost. For more than 100 years, management professionals have pursued this degree to sharpen their business skills and advance their careers.
Like any graduate degree, an MBA requires a significant investment of time and money. Is an MBA worth it? Education is valuable, but many students worry about whether an MBA would yield a good return on investment (ROI).
Generally speaking, if your first year’s salary after graduation equals your undergraduate debt plus your graduate debt, your degree offers a strong financial ROI. In a July 2020 survey of MBA graduates conducted by OnlineMBA, 80% of respondents agreed their degree was into a “good investment.”
The benefits of an MBA extend beyond financial improvement, however. Of those surveyed, 38% said earning the degree increased their sense of personal satisfaction or self-fulfillment. The guide below uses data and analysis to help prospective students determine whether an MBA would benefit them.
Why Do People Get MBAs?
Many people hope to earn higher degrees, but why seek an MBA over other master’s degrees? An MBA can offer a wealth of rewards, including valuable business networks and opportunities to join thriving companies. This degree equips students with leadership and management competencies, which organizations expect from top performers.
In modern business schools, students can also take advantage of executive or online programs, which allow learners to work while earning their degrees. Often, students specialize their curricula to fit their individual career plans, focusing on areas such as healthcare management, international business, or consulting.
Professionals choose an MBA for many reasons, including:
- Improved Salary Potential
- The National Association of Colleges and Employers projected that 2020’s MBA grads would earn an average starting salary of $79,043 — more than $20,000 higher than bachelor’s graduates. Of those surveyed by OnlineMBA, 52% said they earned their MBA because they wanted to improve their earnings.
- Greater Leadership Responsibilities
- An MBA can help graduates secure business leadership positions as marketing managers, database administrators, or healthcare services managers. Our survey found that 61% of respondents pursued an MBA because they wanted to climb higher in their current careers.
- Personal Goals and Interests
- Prospective students should look at their educational options from several angles. In our survey, 42% of respondents said they earned an MBA for personal interest, and 37% said they picked the MBA over other master’s degrees because it would help them achieve their goals.
- Employer Perception of the MBA
- More than a century ago, Harvard launched the first MBA program. Today, the degree has become the gold standard in business education. Of those surveyed, 47% said they chose an MBA over other master’s degrees because of how employers perceive the MBA.
- Career-Switching Opportunities
- Not all new jobs require new degrees, but professionals without a business background may find that an MBA smoothes the way into a business leadership position. In our survey, 25% of respondents said they wanted to begin new careers.
Job-Hunting in the Time of COVID-19
Recently, COVID-19 generated a rapid and shocking economic upheaval. Supply chains broke, manufacturing outputs dropped, and travel jerked to a standstill, affecting jobs across industries. Business education can help professionals weather employment uncertainties during crises such as the ongoing pandemic. An MBA may provide stability in an uncertain job landscape.
In our survey, 53% of respondents said they believe having an MBA helps insulate their job from COVID-19. Additionally, 54% said having an MBA provides an advantage when applying for jobs during the pandemic.
During recessions, companies attempt to preserve cash over hiring new employees. An MBA can help people find and keep positions during tough economic times. This year, at least one major employer of MBA-holders — Bain & Co. — says it does not plan to scale back on its intent to hire 600 MBA-level professionals. Plus, many schools pour significant resources into career-placement opportunities for recent MBA graduates, even amid economic troubles.
The ROI of an MBA
Like any good business professional, a prospective graduate student needs to calculate their ROI before investing in an MBA.
Is getting an MBA worth it? It’s easy to look at factors such as a post-graduation salary bump and a school’s tuition policy when determining ROI, but students need to account for other considerations as well. Tuition rates — which have grown by 1,200% over the past 30 years — make up just part of students’ expenses. Schools often levy additional costs, including books and miscellaneous fees. Moreover, student loans — especially private loans — can mean more debt and fewer investment opportunities down the road.
Prospective students shouldn’t let sticker shock deter them, though, as financial aid options can significantly subsidize education costs. Additionally, business school graduates can expect much higher salaries and a rapid growth trajectory, along with many intangible personal benefits.
How Much Does an MBA Cost?
Some students pay nothing for their degrees, while others sink tens of thousands of dollars into MBA programs. It’s important for each prospective learner to determine whether the degree would pay off for them.
Many factors, including program length, prestige, and delivery format, affect the total cost of a degree. Tuition prices can dip as low as $10,000 for in-state residents at some public schools, while surging past $100,000 at prestigious, private institutions. On top of tuition, students pay for books, school fees, and everyday expenses. For many learners, online programs cost less than those at brick-and-mortar institutions.
How Can You Pay for an MBA?
Fortunately, very few students have to pick up all of these expenses themselves. Many learners take advantage of grants or scholarships, forms of financial aid that do not require repayment.
Graduate students often rely on loans to help bridge the gap between the cost of education and what they can pay out of pocket. Students must pay back their loans by the deadline to avoid penalties.
Some MBA students, including 38% of our survey respondents, receive tuition assistance from their employers.
How Long Does It Take To Pay Back Student Loans?
Many MBA students finance their education with student loans. According to the National Center for Education Statistics, MBA graduates carry an average of $66,300 in student loan debt.
Students who take out federal student loans do so on a 10- to 30-year plan, where learners with up to $7,500 in student loans can pay them back within 10 years and those with $60,000 or more can take 30 years to repay. About 53% of the respondents in our survey said their student debt was “worth it,” potentially because above-average MBA salaries allow graduates to pay back their student loans more quickly than other degree-holders.
Is an MBA Worth It Financially?
In our survey, 61% of respondents said they chose an MBA to climb higher in their career. MBA-holders can advance through the ranks in their current companies, transition to leadership roles with new companies, or switch their careers entirely. This degree positions graduates to work in lucrative positions as advertising managers, financial managers, market research analysts, or chief executives. Of those surveyed, 67% said the degree improved their career or salary prospects as they expected.
How An MBA Can Help You Climb the Corporate Ladder — Internally
Not everyone considering an MBA plans to make a major career change. Some people are content staying with their current companies, whether in their present roles or in different positions.
For graduates who choose to stay with their current companies, the MBA may help increase salary potential or improve chances for promotion. Sixty-six percent of our survey’s respondents said skills from their MBA help them regularly in their current jobs. An MBA can help professionals climb the internal corporate ladder by:
Justifying a Raise
Some companies offer automatic raises to employees who obtain advanced degrees. In other settings, students may use their MBA as leverage when discussing long-term career plans with their managers.
Training for Leadership and Management Roles
Some students plan to move into more advanced roles with increased responsibilities, and an MBA can help smooth that transition.
Demonstrating Dedication and Commitment to Professional Growth
Employers know that graduate education requires grit and perseverance, two characteristics often rewarded in the professional workplace.
How An MBA Can Help You Climb the Corporate Ladder — Externally
An MBA can be the key to getting a new job with a different company. When a prospective employer sees an MBA listed on an applicant’s resume, they recognize the value it can bring to their company. MBA graduates might also consider working with recruiters while seeking jobs in the COVID-19 economy.
An MBA can help transform business professionals’ careers in the following ways:
Demonstrating Increased Knowledge
In a standard MBA curriculum, students learn a cross-section of information and skills critical in the business world. For instance, MBA graduates should understand the basics of accounting, management, and business ethics.
Boosting a Resume
To many hiring managers, an MBA indicates that a candidate possesses vital knowledge, up-to-date skills, and professional commitment.
Creating a Valuable Network
Business schools often offer robust alumni networks, which recent graduates can use to find entry points into their companies of choice.
How An MBA Can Open New Career Paths
Holding an MBA can also benefit professionals who want to branch out into new careers with higher salaries. In fact, 25% of our survey’s respondents said they pursued their MBA to begin new careers. While an MBA cannot compensate for lack of experience or required credentials, it can make many career switches possible.
Students who plan to enter new career paths should make sure to align their curricula with their professional interests. Benefits of earning an MBA for career-switchers include:
Gaining Industry Knowledge
Understanding the ins and outs of an industry can prove critical during a job search. That’s why students should choose their concentrations wisely. For example, those who plan to go into finance should load up on finance courses.
Meeting Fundamental Job Requirements
Some companies expect candidates for certain positions to hold MBA degrees. In these instances, earning the degree simply checks a required box.
Learning a Brand-New Field
MBA programs allow students to learn the functions and forms of different areas of business.
The Value of an MBA Beyond the Paycheck
While a graduate degree in business can mean more money and job security, life is not all about salary jumps and career boosts. Students gain other benefits from MBA programs, as well — benefits without specific dollar amounts attached.
For example, some learners consider enrolling in MBA programs when they feel their careers have gone stale. Others do it to meet new people in the same industry. Still others consider the MBA a stepping stone on their way to doctoral degrees in business administration.
Other benefits of earning an MBA may include:
- Growing Your Network
- Sixty-four percent of our survey respondents said they work in mid-, senior-, or executive-level positions. Imagine surrounding yourself with top executives as you work on case studies, real-world projects, and group activities. Classmates can launch companies together or hire or refer each other for jobs.
- Brushing Up on Your Business Skills
- An MBA can develop skills in leadership, teamwork, and strategic thinking. Our survey asked each participant to state the single most valuable part of their MBA program. One-quarter named soft skills as their greatest takeaway, while 19% named hard skills.
- Increasing Your Knowledge of the Modern Business World
- The world conducts business at warp speed. Even pre-COVID, business professionals often struggled to stay on the cutting edge. Now, remote offices, weak supply chains, and growing e-commerce options have become the new normal. Today’s business leaders must work and study harder than ever to stay abreast of a rapidly evolving situation.
- Changing Your Career
- An MBA can serve as the golden ticket for career-switchers. In our survey, 60% of respondents said they could advance or switch their careers as anticipated. Moreover, of those who completed internships as part of their MBA programs, 87% agreed that the experience was valuable.
- Gaining Confidence and a Sense of Accomplishment
- During their MBA programs, students boost confidence by taking risks, leading team projects, and getting valuable feedback in safe environments. Perhaps most importantly, students can enjoy the benefits of undertaking and completing challenging tasks.
Reflecting on My MBA Experience
Ashlee Campbell received her MBA online in 2016 from Saint Leo University. Ashlee is a marketing professional with experience in brand management, digital, social media, and content marketing. She has proven success in team resource management, project management, and strategic planning of marketing strategies and campaigns.
After spending several years working with national brands in digital marketing and brand management, Ashlee decided to follow her passion and support business owners like herself in their pursuit of excellence in marketing and business operations. Today she partners with small and medium-sized businesses in an effort to grow their brands as effectively as possible.
Ashlee is the owner of Summit Collaborations, a full-service branding, marketing, and web design agency based in Tampa, Florida.
Why did you decide to pursue an MBA?
Honestly, I decided to pursue my MBA because of the show “Shark Tank.” I actually got my undergrad and master’s in criminal justice, but the more I watched the show, the more enthralled I became in the inner workings of business. I wanted to know what made a business sustainable, what drove profitability, company culture, and consumer purchasing behavior. I thought that an MBA would give me all of that, and I was right.
What MBA program did you attend, and why did you choose it?
I attended Saint Leo University for my MBA. I chose this program for two reasons. The first reason I chose Saint Leo was because they offered a one-year accelerated MBA program. The second and most important reason I chose this program was because it is an accredited program offered fully online. As a military spouse, an online graduate program was necessary for my lifestyle.
What drew you to an online MBA program? How do you think it compared to an in-person program?
It was imperative to me that I didn’t let my own professional goals take a sideline to my spouse’s career. Being a military spouse means moving a lot, and I couldn’t take the chance of that being in the middle of an on-campus MBA program, so I knew an online program was right for me.
In the old days — i.e., 12 months ago, before the world knew the power and effectiveness of video conferencing — I think that an online MBA program could be challenging for many individuals who prefer or even need in-person learning. However, virtual learning has changed significantly in 2020, and I believe the stigma and traditional concerns of online programs have diminished.
Put two people in a room, one who received their MBA in person and the other who received theirs online, and I can almost guarantee you that you wouldn’t be able to tell who studied where. In my opinion, accredited online degree programs can be just as effective as traditional classroom learning.
How did you manage school and work? Did your employer support your MBA journey?
Since I received my MBA online, I was able to complete my coursework during the evenings and weekends, so it did not interfere with my job during that time. However, if I would have had to go on campus for classes during work hours, I don’t believe my employer would have supported that.
Did you graduate with student loans? And if so, do you think it was worth the debt?
I did graduate with student loans, but I believe they were worth it. I have a master’s in criminal justice and forensic psychology, and I can say I feel much better about the debt from my MBA than I do from my first graduate degree.
Do you think your MBA was a good investment? Why?
I fully believe that my MBA was a good investment. An MBA sets you apart from others, oftentimes even those with more experience. The program is diverse, and it allows you to learn much more in the business world than you were probably initially interested in. It’s like a luxury watch — having it can get you in doors you didn’t even know were there.
What was the most significant result of earning your MBA?
Two years after obtaining my MBA, I started my own marketing agency. Less than two years after inception, our team consists of three full-time, W2 employees and 10 contractors, and we have 34 clients on retainer, and growing! My MBA laid the foundation for what I needed to own a successful business.
Sure, I knew the marketing side of things from my past professional experience, but when it came to creating a solid business plan, running day-to-day operations, managing team members outside of marketing, and understanding the financial side of things, what I learned in my MBA program helped make that possible.
What financial benefits did you see from attaining an MBA?
Having my MBA allowed me to ask for more money. I brought more to the table than what was considered my speciality (marketing). My employer knew that I had cross-departmental understanding, and that was something of value.
What was the job search like with an MBA under your belt?
I believe my MBA advanced my career significantly. Just six months after obtaining my MBA, I began managing a team of 13 marketing professionals (having no prior management experience) in a multimillion-dollar company that consisted of a family of national brands.
What nonmonetary benefits does your MBA provide to you or your career?
People want to work with those they trust, but they also want to work with people who are competent. An MBA without experience to back it, and vice versa, is not as powerful, but the two combined helps you establish authority in your field.
How long did it take you to see results from earning your MBA?
I saw the fruits of my labor within six months.
What advice would you give to students considering pursuing an MBA?
If you’re considering pursuing an MBA, do it. Bachelor’s degrees are the new norm.
Investing in the Right MBA Program for You
Beyond financial considerations, prospective students should think about the following factors when choosing an MBA program:
- Each prospective school should hold accreditation with the appropriate regional accrediting body, and the best programs typically hold accreditation with business-oriented programmatic accreditors, such as the Association to Advance Collegiate Schools of Business (AACSB).
- School Size
- Small schools often emphasize one-on-one attention, while larger institutions provide more networking opportunities.
- Cost/Financial Aid
- Prospective students should consider both the sticker price of a school and the financial aid options it offers. Expensive schools often provide more scholarships and grants than lower-cost institutions.
- Does your prospective school offer the right online MBA concentration for your career?
- Program Length
- Students often complete executive programs in just over half the time it takes to finish a traditional MBA.
- Earning Potential
- Schools track how much their recent graduates earn and how many have entered their desired fields within six months of graduation. Prospective students should ask admissions officers for this information.
What About Online MBA Programs?
In the past, some employers preferred traditional, in-person education over online degrees. However, this attitude has shifted over time. Most of our survey respondents who earned their MBA online did not feel they had to “sell” their degree to employers.
Most education has shifted to online learning environments since the COVID-19 pandemic began. However, virtual learning began flourishing even pre-COVID, with online MBA programs increasing by 54% between 2012 and 2016.
In our survey of 600 recent MBA graduates, 206 — about 35% — attended MBA programs at least partially online. Many online graduate students work or raise families while completing their degree programs. Of those who received an online MBA, 78% said they chose it for flexibility, 66% preferred it for convenience, and 21% chose it for financial reasons. Additionally, 67% said they felt that their online MBA programs provided the same opportunities as traditional on-campus programs.
Whether online or on-campus, each program offers distinct benefits and drawbacks. Prospective students must think carefully before investing their time, talent, and money into any degree. Personal values differ between students, but online rankings can make a great starting point for effective research before calling admissions officers or visiting campuses.
Explore Our Rankings of Top MBA Programs
So, Is a Master of Business Administration Worth It?
Only you can determine if an MBA is worth the investment. Many factors go into calculating the ROI of a graduate degree, including cost, time, career advancement, salary growth, and intangible personal benefits. An MBA may prove more valuable to some students than others.
An MBA doesn’t guarantee any particular career path, but it can set graduates apart from other professionals when it’s time for promotions and raises. In our survey, 76% of respondents agreed that “I would still pursue the MBA program/school that I chose, now that I’ve completed the program.”
Frequently Asked Questions
Is an MBA worth the money?
Each student must determine the value of an MBA degree for their career. In general, however, MBA graduates considerably outearn their peers in business professions. By keeping costs low, graduates can quickly recoup their degree investments.
Is an MBA online worth it?
Earning an MBA online can mean lower costs, more time at home, and a chance to work while earning a graduate degree. However, on-campus programs offer valuable benefits, such as face-to-face networking.
How much does an MBA raise your salary?
The National Association of Colleges and Employers projected MBA graduates’ average starting salary would exceed that of bachelor’s graduates by more than $20,000. Sixty-seven percent of our survey respondents said earning an MBA improved their salary prospects as they anticipated.
What can I do with my MBA?
An MBA can serve as the point of entry for many lucrative careers, including jobs in accounting, financial management, technology management, and international business. The degree can also crack open sought-after executive roles.
Is an MBA better than other master's degrees?
Many employers recognize an MBA’s value over that of other master’s degrees. In our survey, 47% of respondents said they chose an MBA over other master’s degrees because of employer perceptions.
We fielded survey respondents using Lucid, LLC. All figures, unless otherwise stated, come from Lucid, LLC. The total sample size was 600 adults with MBA degrees. We undertook fieldwork from June 30-July 20, 2020. The survey was carried out online and met rigorous quality standards.
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