9) Ranking MBA Programs By Credit Ratings (M7 Financial): In any sales pitch, you steer away from the costs, always hyping the thrill entailed in any venture. Well, here’s a dose of reality. You will lose out on two years of income. You probably won’t land a full ride. Come that first Christmas after graduation, those $700 monthly loan payments start coming due – regardless of whether you’ve landed that dream job.
Worried about your risk and exposure? Maybe you should look at your prospects like a credit agency would. Using such a framework, M7 Financial awards schools with a rating ranging from A+ (Modest loan obligation with strong career prospects) to C- (Heavy obligation with moderate prospects). The ratings are based on dividing average debt by average earnings to get a leverage ratio, with a debt service coverage ratio calculated by comparing estimated 10-year earnings with project principal and interest over 10 years.
Your safest bet? Sure enough, it is Brigham Young (Marriott), where average debt runs $27,942 and average pay comes out to $110,216. The biggest risk? That’d be Pepperdine, which earned a respectable B with an $89,245 debt benchmarked against an $80,592 starting paycheck.
Alas, this ranking doesn’t account for the lifetime value of a degree. But if you’re wondering how you’ll come out after graduation, you probably won’t find a better resource.
10) How A Dean Would Rank Business Schools: You had to know this was coming. Tired of his school being poked and prodded like cattle, a dean would step forward with a new way of ranking business schools. This spring, Columbia Dean Glenn Hubbard shouldered this thankless task.
What metrics does Hubbard value? Forget surveys from students, academics and recruiters. Instead, he suggests that you evaluate the number of applications and yield to gauge the attractiveness of the school. Then, factor in outputs like job offers and salary levels. Seems simple, right? We thought so – and calculated just that. And the results were quite surprising. If you skip all of the fancy statistical sampling and qualitative window dressing, you still end up with Stanford and Harvard on top! Berkeley and MIT move up a few spots as Wharton and Booth slide down. Ironically, Columbia still finishes in sixth place – the same as it did in the Poets&Quants and Bloomberg Businessweek rankings.
Perhaps everyone (even Poets&Quants) really is overthinking these rankings. Then again, maybe the real job of a more complex instrument is to ferret out the nuances to separate a tight pack where no school shows any signs of letting up. Regardless, we’re tipping our hat to Dean Hubbard, who mustered the courage to take his ideas public for analysis and debate. Right or wrong, his ideas started a conversation that continues to resonate.