Last week we ran into an article on the Poets & Quants blog, regarding the ROI of an MBA degree: NPV vs. Payback: Shaping MBA Career Decisions.
It had some interested points on how monetary considerations affect MBA job searches, and how this reflects back on the perceived value of an MBA from both a monetary and non-monetary perspective.
So this got us thinking… In strict monetary terms, the equation for the value of an MBA (adjusted downward to account for the appropriate discount rate — yes, aspiring investment bankers, we’re know) runs something like this:
Earning Potential with MBA
Less: Earning Potential without MBA
Less: Tuition & Fees (net of financial assistance)
Less: Lost Income during MBA
Less: Interest on Student Loans
Equals: Net Benefit of an MBA
So on top of that you can calculate an ROI, and decide if monetarily, the MBA makes sense.
However, we couldn’t help but wonder, is this really the right way to be thinking about the value of an MBA?
Read on at BSchool Admissions Formula to see our thoughts on the matter: Business School is Expensive… Is it worth it?