This is the sixth biennial list compiled by Forbes based on a simple but important formula: the return on investment graduates have achieved after five years. The Forbes study—based on a survey of 4,080 responding alums from 103 schools–shows that alumni of the top five MBA programs typically earn more than $200,000 five years out of school.  Stanford topped the latest Forbes ranking because the median salary of an MBA from the class of 2004 was $225,000, highest among all U.S. rivals. Forbes figures that the typical Stanford student graduating in 2004 paid $235,000 for the MBA, a sum including two years of forgone salary (at Stanford the average MBA had a median salary of $82,000 before entering school).

Forbes ranks Stanford's Graduate School of Business number one in return-on-investment.

Pro: It’s simple and elegant and doesn’t pretend to measure the quality of the MBA experience or the actual education you receive. It’s all about dollars and cents, measuring the worth of a degree five years after graduation.

Con: Forbes ranking is U.S.-centric, though Forbes does separate lists of non-U.S. institutions that award MBAs in one year and in two-year programs. The biggest problem is that the ranking only measures compensation versus the cost of getting the MBA. Return on investment, while interesting and important, is hardly a measure of the quality of the education or the experience you’ll have. Forbes also gets this data from alums so there could also be sampling bias (alums who are not making much money would probably be less likely to return the survey than those who are doing well). And because alums know that their answers result in an immediate ranking, they may want to inflate their compensation to improve the rank of their school.

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Footnotes:

NR means not rated by the publication.

ST means “second tier,” the rating given to 15 schools by BusinessWeek after it ranks the top 30.

Source: Forbes, 2009 ranking