Third Of A Million: True Cost of A Top MBA



2011 Average  

Forgone Pay

2011 Recommended 


Total Cost Of 

Getting An MBA

Harvard Business School$90,400*$168,000$348,800
Stanford GSB$88,750*$174,162$351,662
Pennsylvania (Wharton)$74,000*$178,400$326,400
Dartmouth (Tuck)$74,000*$168,100$316,200
MIT (Sloan)$74,000*$165,264$313,264
Northwestern (Kellogg)$73,960$162,458$310,378
Columbia Business School$73,425*$175,740$322,590
Chicago (Booth)$72,320*$170,976$315,608
USC (Marshall)$67,000$159,600$293,600
UC-Berkeley (Haas)$66,345$156,244$288,934
NYU (Stern)$65,972$165,340$297,284
Texas-Austin (McCombs)$65,033$134,280$264,346
Virginia (Darden)$64,325*$151,000$279,650
Duke (Fuqua)$64.087$143,718$271,892
UNC (Kenan-Flagler)$63,850*$145,656$273,356
Cornell (Johnson)$63,640*$147,320$274,600
Yale School of Management$63,126$157,790$277,790
Michigan (Ross)$62,000$147,448$271,448
UCLA (Anderson)$59,144$153,174$271,462
Carnegie Mellon (Tepper)$58,200$154,000$270,400
Georgetown (McDonough)$52,618$148,880$254,116
Vanderbilt (Owen)$48,338$175,608$272,284
Indiana (Kelley)$46,189$126,080$218,458

Source: Business schools reporting to Bloomberg BusinessWeek. An asterisk indicates an estimate based on previously reported data.

Notes: To calculate the total cost of getting an MBA, P&Q multiplied the annual forgone pay by two to account for the opportunity cost of being out of work for two years. We then added that total to the school’s recommended two-year budget which includes tuition, required fees, as well as room and board. In all cases, these are conservative estimates. They assume no increase in the recommended budget for the second year of business school, and most observers believe these recommended numbers are 10% to 20% below what a typical MBA will spend in a two-year program. We used recommended budgets for non-residents at public universities where tuition may be slightly lower for residents.



  • Umair

    Just a quick comment on the calculation. When we calculate the opportunity cost for MBA it has to be tuition (2yrs) + cost of living (2yrs) + Possible savings in those 2 years.

    You cannot add tax and money you might have spent on living to the opportunity cost.

    Once you do that MBA is still expensive but not as expensive as presented above

  • Regrets

    I went to one of these top schools. In addition to forfeiting the income, taking on the loan to get the MBA I ended up unemployed for two years after. I absolutely have no clue how I’m ever going to pay it all back because even though I have got a job not it doesn’t pay me close to the median of my class.
    Think hard before getting an MBA. Don’t let the marketing and hype fool you.

  • Chris

    Obviously this article focuses on MBA/Grad programs in the US, but does anyone have any experience with grad schools outside of the country? Clearly exchange rates come into play but just wanted to get any ideas on the thought of doing a MF/MBA abroad (HongKong, Europe, UK?)

  • Sandy

    @Gosh – Tuck is as ivy as it gets. Yes, the brand is not as well known in Asia (if that’s what you are referring to), but the school was ranked #1 by Economist (the no-nonsense UK publication) this year. Take every ranking with a pinch of salt, anyone applying to Wharton would not (or should not) apply to Tuck and vice vera. Very different schools and very different “school fit” case.

  • MBA Aspirant 2012

    @Gosh, some may differ from your opinion. Tuck is ranked on the lower side of top 5 US B schools, and its post MBA pay over long term is comparable to the H/S/W class (slightly lower though).

  • Gosh

    I am very surprised about the Tuck figures. Tuck is by no means a TierOne MBA…

  • However it should be pointed out that Kellogg has an accelerated 1 Year program (June – June) which costs much less, at $72,000 and offers the exact same full time degree. The program accepts around 85 students per year and the student’s have an average work experience of 5 years at the time of starting school.

  • Sandy


    Yes, it is not that big a deal in the grand scheme of things and a Top 5 (may be 10) MBA is still worth it, but the price tag of nearly $400K is still a reality.

    Birchtree – there are a lot of companies that have their own MBA and leadership development programs. For eg – Schlumberger has a special MBA program tailored for its future talents that is taught at INSEAD. So, if you are in any such companies that offer career track positions and responsibilities, an EMBA/PT MBA are very good options (if you still need them, that is). A lot of companies like the oil companies have their internal employees running the company. Likewise, a firm like P&G does not hire outsiders for senior/mid-tier management roles ( I have only heard, might be wrong).
    However, if you want to switch your career completely, then there is no better means to doing so than by pursuing a FT MBA from the 10 of the Top5 schools. John – your thoughts?

  • Birchtree

    Given the burden of losing 21 months of income when combined with the economic uncertainties of the day, will this result in materially more prospective applicants considering top-tier/strong part-time or EMBA programs in order to maintain income?

  • M.

    Nice job getting cross-posted on CNN! Glad to see P&Q getting some main-stream media attention.

  • Alois de Novo

    John and Sandy, tuition, room and board, and other cash expenses are paid for after tax. The opportunity cost, the two years of forgone income, is pre-tax. It’s not quite as big a deal as you guys say it is.

  • MBAClass2013,

    The numbers were provided by the business schools. I assume they represent only base salary and no bonuses.

  • MBAClass2013


    Great article. Are the forgone pay numbers you are using only base salary or do they include year-end bonuses as well.

  • Joan

    John, Great website. Can’t wait to see the article about internation applicants.. (especially the part relating european ones). I have always wondered what is the best for an european candidate, whether to stay in Europe or go to the US…

  • Linda,

    Possibly. But without a steady paycheck, those expenses loom very large in the equation. As you know there are all kinds of factors not in this particular analysis.

    On the positive side, we’re not including fellowship grants from schools, income during one’s summer internship, the fact that as one reader pointed out we’re subtracting two years worth of income instead of 21 months, and the cost of meals and a room which a person would have to pay, anyway. On the negative side, we’re not including interest payments on loans which could run into the tens of thousands of dollars, and we’re going with the actual school-recommended budgets which most people know are 10% to 20% below the actual costs due to overseas trips, entertainment, and overspending in general once you hang with the MBA crowd at a top school.

  • John,

    While I suspect the total will still be eye-popping, including living expenses, which one needs to pay whether in an MBA or not, weakens your point. Shouldn’t those numbers be left out?

  • I believe the overall point still holds but worth noting that the schools’ recommended 2-year budgets include room and board. Since you’d be paying these whether or not you attended school, shouldn’t it be left out of the analysis?

  • Sandy


    Your work is always very intriguing and simply dissects through many well established myths in this MBA business, so I am certainly looking forward to it.

    As far as this article is concerned, I can confirm that I know of folks whose cost of foregone salary is about $300K ( I am not kidding). That puts the cost of an MBA in the $450K bracket.

  • Jeff

    Good article. But you also need to subtract the expenses that will incur whether or not you enroll in an MBA program. For instance, you would need to pay for the rent/mortgage, utilities, food, etc. In addition, you will not pay income tax when you do not have an income… So the Opportunity Cost is not as high…

  • Sandy,

    I didn’t think of that but you’re right. Unfortunately, it’s hard enough getting this data. It would be nearly impossible to slice and dice it in a way to get at the international difference. By the way, I’m currently working on a story that you would probably find very compelling about international applicants to U.S. business schools. I expect to publish it over the weekend.


  • gmoney

    Good point. Fair enough. We both agree.

  • Sandy

    Another very insightful article John. I would believe that the average pre-MBA salary reported is much lower here due to the combining both international student (generally much lower remunerations) and local students into one pool.

    Is there a way we can separate international candidates’ data from the local appliant pool data?

  • gmoney,

    You’re making very good points here. But I would also say that the recommended budgets by the schools, as pointed out in the article, are generally 10% to 20% below what is needed to do a two-year MBA program. That additional dough pretty much offsets the internship pay. And if you add the interest payments on the debt you’re likely to incur by getting the MBA, the actual cost is far above the numbers cited. Even so, your comments are on the mark.

  • gmoney

    This analysis is partially flawed because you only are “out of a job” for 21 months and not 24. To add to that you typically get an internship for 3 months. These internships are around $6k-$8k on avg (consulting is higher). So thats $21k in income. So I would take those numbers and subtract the 3 months of internship pay and 3 months of pre-MBA job pay. Which adds up to about $40k.