McCombs School of Business | Ms. Registered Nurse Entrepreneur
GMAT 630, GPA 3.59
Kellogg | Mr. Hopeful Engineer
GMAT 720, GPA 7.95/10 (College follows relative grading; Avg. estimate around 7-7.3)
Wharton | Mr. Rates Trader
GMAT 750, GPA 7.6/10
Stanford GSB | Mr. Former SEC Athlete
GMAT 620, GPA 3.8
Tuck | Mr. Army To MBB
GMAT 740, GPA 2.97
Columbia | Mr. Forbes 30 Under 30
GMAT 730, GPA 3.4
Stanford GSB | Mr. MBB Advanced Analytics
GMAT 750, GPA 3.1
Stanford GSB | Mr. Impactful Consultant
GMAT 730, GPA 3.7
Chicago Booth | Mr. Banker To CPG Leader
GMAT 760, GPA 7.36/10
Ross | Mr. Leading-Edge Family Business
GMAT 740, GPA 2.89
Darden | Mr. Logistics Guy
GRE Not taken Yet, GPA 3.1
Chicago Booth | Mr. Desi Boy
GMAT 740, GPA 3.0
Kellogg | Mr. Stylist & Actor
GMAT 760 , GPA 9.5
Columbia | Mr. Ambitious Chemical Salesman
GMAT 720, GPA 3.3
Tepper | Ms. Coding Tech Leader
GMAT 680, GPA 2.9
Harvard | Mr. Irish Biotech Entrepreneur
GMAT 730, GPA 3.2
Stanford GSB | Mr. Cricketer Turned Engineer
GMAT 770, GPA 7.15/10
Wharton | Mr. Planes And Laws
GRE 328, GPA 3.8
McCombs School of Business | Mr. Refrad
GMAT 700, GPA 3.94
Harvard | Mr. Supply Chain Photographer
GMAT 700, GPA 3.3
Chicago Booth | Mr. Space Launch
GMAT 710, GPA 3.0
Kellogg | Ms. Product Strategist
GMAT 700, GPA 7.3/10
Columbia | Mr. MBB Consultant
GRE 339, GPA 8.28
Berkeley Haas | Mr. Avocado Farmer
GMAT 750, GPA 3.08
Georgetown McDonough | Mr. International Development Consultant
GMAT N/A, GPA 2.9
Columbia | Mr. Wannabe Grad
GMAT 710, GPA 3.56
Kellogg | Ms. Indian Entrepreneur
GMAT 750, GPA 3.3

Which Business Schools Produce the Highest Returns?

 

San Francisco-based firm SV Angel invested in a dozen of our top 100 MBA-founded companies

San Francisco-based firm SV Angel invested in a dozen of our top 100 MBA-founded companies

Choosing a business school is much like picking an investment. You can spend big on a blue chip, looking to compound your money over the long-term. You can sift through discounts, hoping the value turns around over time. You can even plow your money into a low risk treasury bond, to ensure you land a safe return. No matter what: You need to spend money to make money.

Make no mistake: Business school is a long-term investment. For two years, you’ll leave your job and forego an income, costing you anywhere from $100K-$200K. On top of that, tuition and fees can run up to $150,000 – and that doesn’t even include living expenses like rent and groceries. Then again, you must balance these short-term costs against the long-term cost of not attending – roughly $60K-$100K a year according to Shawn O’Connor, Founder and CEO of Stratus Admissions Counseling. It’s a huge decision, especially when you consider that the right program can help you earn an extra $3 million dollars over the next 20 years.

Earlier this year, The Economist published its list of the MBA programs with the highest first year ROI. Not surprisingly, the most prestigious schools – Wharton, Harvard, Stanford, Columbia, and Kellogg – didn’t fare so well. Then again, it takes time for students to pay off their loans and gradually raise their salaries. When it comes to first year compensation, these are the schools where students are earning $135K-$141K in pay and bonuses to start.

And that brings up a question: Does the gap on return begin to narrow for more expensive schools after the first year out of business school?

The answer: not necessarily.

How The Financial Times Measures ROI

Financial Times

Those were the findings from The Financial Times’ most recent rankings of “Value for Money” (otherwise known as return on investment). According to The Financial Times, “Value is calculated using the salary earned by alumni today, course length, fees, and other costs, including the opportunity cost of not working [during the MBA].” Overall, Value for Money accounts for 3% of a school’s overall global ranking. Unlike most data points in The Financial Times’ 2014 rankings, which contain three years of data, Value for Money is derived from 2014 data collected from the schools.

Since The Financial Times doesn’t make data like tuition and opportunity cost available, Poets&Quants is also including two data points in its tables. The first is a “Weighted Salary,” which is the “average alumnus salary three years after graduation.” Weighted Salary is based off of an American dollar equivalent, “with adjustment for variation between sectors.” The weighted salary is based off two years worth of data, with each year encompassing 50% of the average. The highest and low salaries have also been removed from the average.

The second data point is a “Salary Increase,” which, in the words of The Financial Times, reflects the “average difference in alumnus salary before the MBA to now. Half of this figure is calculated according to the absolute salary increase and half according to the percentage increase relative to pre-MBA salary.” Combined, these data points comprise 40% of each school’s ranking.

American Schools Fare Poorly

Coppead

Coppead

For the second consecutive year, Brazil’s Coppead tops The Financial Times’ ranking for the highest return–if you can actually believe that result. At an average salary of $88,256, The Financial Times ranks Coppead #95 in overall compensation. However, this total also represents a whopping 138% increase in weighted salary (and that’s despite Coppead graduate salaries dropping by $8,365 from 2013 to 2014). Still, these numbers are nearly identical to the $86,410 salary and 132% increase reported by the University of Pittsburgh’s Katz Graduate School of Business. Like most European schools, Coppead students benefit, tuition-wise, from an 18-month program. In addition, over half of Coppead’s graduates flock to the consulting and banking industries according to The Financial Times.

The Lisbon MBA (Portugal), IMD (Switzerland), The University of Strathclyde (UK), and Lancaster University (UK) round out the top five. Seven United Kingdom institutions made the top 25 for schools with the highest return – and two German schools (ESMT and Mannheim Business School) ranked #6 and #7 respectively, reinforcing the growing popularity of the German MBA.

Among American schools, only Texas A&M and the always-underrated Brigham Young University made the top 25. In fact, American MBA programs comprised 44 of the bottom 50 programs for return, with MIT Sloan, Wharton, Stanford, and NYU Stern ranking #97 through #100 three years after graduation.

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