2013 Forbes’ MBA Ranking

Graduate School of Business Knight Management Center - Stanford University

Stanford GSB Knight Management Center

For only the second time in 14 years, Stanford University’s Graduate School of Business nudged out Harvard Business School and other rivals to become Forbes’ highest ranked business school. The biennial Forbes MBA ranking, published this morning (Oct. 9), shows the University of Chicago’s Booth School of Business in second place, with Harvard dropping to third from first in 2011.

Wharton, in fourth place this year, again trails Chicago Booth, which is ahead of Wharton in the Forbes ranking for the third consecutive time. The last Forbes survey in which Wharton topped Chicago was 2007 when Wharton was fifth and Booth was seventh. Rounding out this year’s top five is No. 5 Northwestern University’s Kellogg School of Management, up two spots from 2011. Kellogg’s Top Five placement is its best showing ever in Forbes’ ranking which for many years placed the school ninth or tenth.

Forbes said the median salary today for a Stanford MBA in the Class of 2008–a group of students who graduated just months before the Great Recession hit–is a chart topping $221,000 a year. Those graduates entered the MBA program at Stanford in 2006 with pre-MBA salaries of $80,000. Median salary for both Harvard Business School and Wharton MBAs is just a bit lower at $205,000, while pre-MBA pay was also $80,000. And at No. 2 Chicago Booth, the median salary is $200,000, though pre-MBA pay for Boothies was $76,000.

In the eight different versions of Forbes’ business school rankings since 2000, Harvard Business School has topped the return-on-investment list four times (1999, 2001, 2003, 2011), Dartmouth College’s Tuck School of Business did it twice (2005 and 2007), and Stanford captured the ROI crown twice, in 2009 and this year.

Forbes, which ranks international schools separately by one-year and two-year MBA programs, reported that IMD again edged out INSEAD in the one-year category. Those two schools were followed by No. 3 SDA Bocconi in Italy, No. 4 IE Business School in Spain, and No. 5 Oxford in Britain. London Business School was another repeat winner, taking first place again in the two-year international category, with the National University of Singapore second (see IMD Named Top International Business School).


Of the five most influential MBA rankings in the world, Forbes is the only one to base its entire methodology on one simple measure: return on investment. The magazine surveys alumni five years out of school and asks them what they’re currently making on the job.  Forbes then compares alumni income at each school to MBAs’ opportunity costs–two years of foregone compensation, tuition and required fees. It calculates a payback period for the degree to earn out.

But the actual ranking is based on the net cumulative amount alums of a school have earned after five years by getting their MBA degrees versus staying in their pre-MBA careers. The magazine adjusts the median five-year MBA gain for cost of living expenses and discounts gains using a rate tied to money market yields. It also reduces tuition to account for students who pay in-state rates and for the non-repayable financial aid that schools dole out. This year Forbes said it surveyed roughly 17,00 alumni from 100 schools. About 27% of the alums responded.

Once all those numbers are crunched by Forbes, it’s clear that a top MBA is well worth the investment. “Students at a our top 10 U.S. schools entered their programs in the fall of 2006 with an average salary of $72,000,” said Forbes. “Five years after getting their degrees, they were banking $185,000 on average. Fewer investment banking jobs result in slower paybacks on the b-school investment, but the degree stills pay off at the best schools.”

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