MONEY ISSUES MOST IMPORTANT FOR PROSPECTIVE MBAS
For people considering an MBA, financial issues remain the most important consideration when deciding whether to pursue the degree, according to the Graduate Management Admission Council’s 2015 Prospective Student Survey. But the prevalence of these financial concerns appears to be decreasing: GMAC’s survey found that 44% of prospective MBA candidates had reservations about taking on a large debt, down from 49% in 2010.
SoFi’s data provides some reason for additional softening of debt-related worries about getting an MBA. It turns out that no matter what undergraduate degree a person has, an MBA degree boosts lifetime income considerably – from a 34% increase among those with undergraduate medical or nursing degrees, to 89% for those with undergrad business degrees.
“The message here in general is it looks like an MBA is worth it,” says SoFi co-founder Dan Macklin. “Irrespective of where you did your undergrad these are big numbers.”
In most cases, the greatest relative impact from an MBA comes from combining it with an undergraduate degree that’s not so lucrative, and a lower impact comes when an MBA follows a degree preparing a student for a well-paid field. Thus, an MBA boosts lifetime earnings by 90% for a humanities major – who might otherwise be earning peanuts managing folk art exhibits in a small town museum – while increasing earnings by 49% for an engineering/computer science major – who might otherwise get hired at Google and start off with a six-figure salary straight out of college.
MBA BRINGS LARGE EARNINGS INCREASE FOR COLLEGE BIZ MAJORS
The data show that someone with an undergraduate business degree can expect a smaller boost from an MBA than would a social sciences major, suggesting that undergrad business majors do fairly well without an MBA. But still, the financial benefit of adding the MBA to a business degree is significant, with a lifetime earnings increase approaching 50%. “If you have an interest in business I don’t think that you should assume that just because you’ve been to undergrad and studied business, that that’s the same thing (as getting an MBA),” Macklin says.
Macklin found the results on the JD versus the MBA somewhat surprising – for a lifetime earnings increase, the law degree edges out the MBA for nearly every college major. But Macklin suspects that a figure for JD holders’ average pay may mask wide variations in earnings among lawyers. So students weighing graduate degrees and considering law would do well to ponder more fundamental questions, such as whether they could expect to end up in a big law firm where earnings are particularly high, Macklin says.