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Does it make economic sense for me to get an MBA?

Getting an MBA is a lot of work. Performance standards in an AACSB accredited MBA program are rigorous and the amount of work required to meet those standards is considerable. While earning an MBA shouldn’t be just about the money (knowledge acquisition and skill development should be major motivators), asking if earning an MBA will result in increased income is common and natural given the sacrifice required to earn the degree.

To answer the question - there are no guarantees that earning an MBA will result in increased income. However, on average, an MBA from an accredited program pays off – big. Please read the linked article by Davies and Cline (2005) titled “The ROI on the MBA” for details. The bottom line is that most MBA graduates greatly increase their lifetime earnings.

There are some notable differences between the MBA programs studied by Davies and Cline and USI’s MBA program. On average, students at world renowned universities earn higher incomes before they start MBA studies and earn more after graduation than USI MBA students. Of course, those same world renowned programs are much more expensive than the USI MBA program. Many of those programs approach or exceed $80,000 dollars in direct costs alone (tuition and fees). More significantly, the indirect costs of a full-time MBA program usually far exceed the direct costs, mostly due to lost income while a student. Put it all together and the cost of an MBA can be very formidable.

According to the October 23, 2006 issue of Business Week for example, the average cost of a Harvard MBA is $345,401 while the average cost of an MBA from MIT is $324,305. Given post MBA salary premiums of $23,921 at Harvard and $21,500 at MIT (difference between salaries pre and post MBA), the average time to break-even on a Harvard MBA is 14.44 years while the average time to break-even on an MIT MBA is 15.08 years.

There are of course better values in full-time MBA programs. An MBA from Michigan State, for example, features an average cost of $161,905, an average salary premium of $40,805, and a relatively quick break-even at 3.97 years.

The USI MBA offers exceptional economic value.  With an average cost of approximately $9000 (assuming no prerequisites are needed), the USI MBA will break even very quickly for most program graduates and offer an attractive increase in lifetime earnings. How is this possible? By offering evening classes, USI provides working professionals in the Evansville area an opportunity to earn an AACSB accredited MBA without quitting their full-time employment, thereby virtually eliminating the often formidable indirect costs.