‘Business School Is A Waste…If You Want To Blow $100K, Go To Vegas’

by John A. Byrne on

A Stern MBA wishes he spent his tuition money in Vegas instead of on an MBA

A Stern MBA wishes he spent his tuition money in Vegas instead of on an MBA

“Business school is a waste of time and money. If you want to blow $100K, go to Vegas.”

That’s what one disgruntled Class of 2008 MBA alum from New York University’s Stern School of Business told Forbes when surveyed for the magazine’s latest return-on-investment ranking of the best business schools.

If the Stern alum wasn’t feeling the love, you can’t blame him. Like many of his classmates, he graduated just months before the Great Recession crashed into what was a booming economy. Many newly minted MBAs who headed for Wall Street found themselves out of jobs once Lehman Brothers imploded. Some even had to return their signing bonuses to the firms that put them out on the street.


Ultimately, the economic contagion that spread through the world economy impacted just about everyone–not merely Wall Street professionals or MBA holders. The enduring grip of the Great Recession took its toll on the historical payback of the degree. MBAs in the Class of 2008 found that it took more time than ever for the degree to earn out: three to five years for the 70 U.S. schools ranked by Forbes.

Besides the slower payback periods, the magazine noted that five-year gains attributed to the MBA also have fallen over the past decade. The average 5-year gain for grads at the top 25 schools was $118,000 a decade ago, but only $68,000 this year. “Five-year out salaries averaged $159,000 this year, but that represents an annual gain of only 1.8% since 2003, which was slower than the rate of inflation,” the magazine said.

And in a fair number of cases, median salaries actually went south. The biggest declines in reported median salary occurred at IMD. Five years after graduating with their MBAs, the Class of 2008 claimed annual salaries of $211,000, a $35,000 drop from the $247,000 pay reported by IMD’s Class of 2006 two years ago. MBA grads at Harvard Business School and Cornell University’s Johnson Graduate School of Management both saw their salaries fall by $25,000. At HBS, the Class of 2008 reported median pay of $205,000, down from $230,000 for the Class of 2006. At Johnson, the Class of 2008 reported median pay of $155,000, down from $180,000.


For whatever reason–perhaps because of industry choice, geography, or the sample of alumni responses gathered by Forbes–some schools reported increases in median salary for the Class of 2008 over the class that graduated two years earlier. The biggest gain–$17,000–was reported by London Business School’s class which posted median salary five years after graduation of $214,000, up from $197,000 for the Class of 2006. Stanford MBAs also fared well, seeing a $16,000 jump in median salaries to $221,000 from $205,000.

Out of the 34 business schools in the world where the Class of 2008 made the most money, roughly a third–11 schools–bucked the trend. They included Italy’s SDA Bocconi, Michigan’s Ross, Georgetown University’s McDonough School, and UT-Texas at Austin McCombs School of Business. And despite the setback for some, MBA alums at 59 of 70 ranked U.S. schools and 22 of 24 ranked international schools are all in six-figures.

And although it was a Stern MBA who wished he gambled his tuition in Vegas, Stern grads did okay. The members of the Class of 2008 actually reported median salaries of $165,000, up $5,000 from the $160,000 median reported by the Class of 2006. You can bet they’re glad they spent their money on a prestige MBA.

(See the following page for a comparison of median salaries between the Classes of 2008 and 2006)

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  • Stanford GSB

    You went to the wrong school dude. Even if I could never tell a future employer that I had an MBA, and I went back to my previous job afterwards, I would still spend the $110k on tuition and sacrifice the $260k of foregone earnings. The enjoyment of the experience, the self-enrichment, and above-all the friendships made were worth that price alone, and the lifetime value of those far exceeds the cost. Much better than any trip to Vegas (of which there were several during the MBA, obviously…)

  • Jonathan Olsen

    Ironic that the ratings were all based on the medians but the headline quote is from one outlier grad. Sensation sells. Next time, let’s highlight the outliers in the top 4% of each B-school instead and what they are achieving five years out – I bet the results would be more surprising.

    To the MBA cynic, please remember: If you’re deep into a career path such as finance pre-MBA (perhaps too deep), Bschool might not boost your income, but it may save you from making the next whale trade or equivalent headline. When you are in a leadership position, your mistakes are 10X more expensive than your education, and can cost people their jobs or life savings. But with the right moves, you can also employ thousands of people and delight millions of customers as an entrepreneur, marketer, or financial whiz.

    As a metric, income alone is a short-sighted assessment of the value of an MBA program. It depends on your industry and your goals. Business education is about empowering you to be a better leader, it’s about supporting colleagues, and it’s about gaining a broader business world perspective. B-school influences your thinking over the arc of your 25+ year career, and so does your network.

    Finally, let’s not forget that the schools that admitted you are not responsible for your success, you are. It’s what you do with what you’ve learned. Go be the next alumni success story, build a company that lasts, or change the world. You will be much more than your salary 5 years out of Bschool.

    (PS. I went to NYU Stern, and like so many others, I loved it.)

  • Katrine Muench

    14 years out from Stern I have not only had the opportunity to work on lots of amazing and challenging new financial software projects with innovators from all parts but I also have 2 kids heading into high school and a very busy life. I was the first at my company to ask for part time flexible and bought my own cellphone to make it work and prove the naysayers wrong. Within 5 years I had 2 kids and a flexible schedule where getting the job done mattered and not just the physical space I was assigned to sit in. I would not have had the courage to risk loosing my job at each key transition without the Stern MBA

  • Socrates

    I say: why not do both?

  • Alchemical Reaction

    Write complete sentences.

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