Go to a top-tier business college, and that MBA degree may be worthwhile. For the most part, however, getting an MBA makes little financial sense anymore.
What is taking place to MBAs?
There has been an enormous increase in the number of people with MBAs despite the truth that there has not been a rise in jobs. The Wall Street Journal reports that this increase started in the early 1990s when many part-time and executive MBA programs began to be offered online and at lower-ranked schools.
According to professor Dr. Brooks Holtom at Georgetown University McDonough School of Business, “An M.B.A. is a club that is now not exceptional. You should not assume that this less exclusive club is going to confer the same benefits.”
People with MBAs make less money
At PayScale.com, it found a 4.6 percent decrease between 2008 and 2012 in median pay for graduates with three or less years of experience. The average pay was $53,900 in 2010 for graduates. MBA students are losing money instead of gaining it by getting MBAs. There was a 62 percent drop in pay at 186 schools on PayScale during that time.
Why the tremendous drop? It’s not simply because of the weak, recessionary economy. It’s because business schools are dangling false hopes before students. Those with experience don’t need diplomas as much, and top-tier companies tend to recruit from only the most distinctive schools. The glut of MBAs in the U.S. doesn’t help matters, regardless of a company’s exclusivity, and neither does the sluggish economy that retards the amount of opportunities available.
Good news for universities
Business and law are cash cows for universities, but not necessarily for graduates. The prevailing advice that MBA students should heed is that unless they can gain admission to a top-10 business school, they should enter a different field. The amount of debt relative to the median salary is debatably not worth the trouble, otherwise. Learn to assess the career industry before you commit to bone-crushing debt.
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