Median Post-MBA Pay Jump Now 90%

Here’s a sales pitch for you. Say a stranger offers to nearly double your present salary. Who wouldn’t want that, right? But there’s a catch. You’d need to take time off work – a year or two to be exact. Oh, and you’ll be forking over, say, $150,000 to make it happen. Would you do it?

That’s one way to look at a graduate business program. If you attend full-time, you forfeit a steady paycheck. And you might need to take out a six-figure loan on top of that. But people don’t frame such degrees as an “investment” for nothing. According to a new study (June 24th) from the Graduate Management Admission Council (GMAC), the payoff is a 90% increase in median salary.

What does that mean in real dollars? If you enter business school making $70,000, you’re likely to leave with a $130,000 offer (and a far better job). Theoretically, you can pay off your tuition debt in three years. And here’s the kicker: graduate business degrees are becoming more valuable by the year. In 2014, the GMAC reported that salaries had increased by 80% for graduates. A year earlier, that number was 73%. At this rate, business grads will be doubling their previous salaries in no time!

MEN AND INDIAN STUDENTS MAKE THE BIGGEST SALARY GAINS

Mind you, GMAC doesn’t report median salary increases by school, let alone program type (i.e. full-time MBA, executive MBA, Master’s degree, etc.). Even more, these increases aren’t spread out evenly. For example, median starting salaries for men jumped to 89 percent among 2015 graduates, an 11 percent increase over 2014. At the same time, women made 91 percent more after earning their graduate degrees – two percent higher than men. But don’t celebrate the smashing of the glass ceiling just yet: This was the same percentage for women as the previous year, meaning men are just closing the gap.

International students were another big winner in this year’s GMAC Graduate Survey. Their median salaries jumped from 119 percent to 192 percent, though the starting salaries for MBAs in many countries generally trail behind the United States. At 200%, B-school grads from schools in India enjoyed the highest salary growth – a number that has risen 86% since 2014. They were followed by graduates from the Middle East and Africa (156 percent – up from 84%), Latin America (127% – up 2%), and China (104% – down from 162%). In the United States, salaries rose two points to 69%. At the same time, European graduates witnessed their increased first-year earnings plunge 21 percentage points to 57%.

Not surprisingly, students with less than three years of work experience gained the biggest salary jumps at 112%. However, the real growth can be found among those with 3-5 years of experience, with their starting compensation climbing from 83 percent to 100 percent over the past year. Role-wise, 2015 grads with a human resources background witnessed the highest salary growth at 104, up 59% from the previous year. Consultants also doubled their pre-MBA salaries, while finance and accounting graduates continued to garner attention from recruiters, with their post-degree earnings growing from 68% to 82% in one year.

Median Change In Post-Degree Salary

Source: GMAC