Way back in the misty recesses of business school history, deans from seven of the most elite business schools in the United States met and agreed on an informal arrangement. They would meet twice a year and share information, and not only among the deans — everyone else, too, from vice deans down through admission directors, career management directors, and even marketing staff. According to legend, the schools would form a self-anointed echelon from which no school would be dropped, and none added. Thus was born the Magnificent — or Magic, depending on whom you asked — 7.
New year, old truth: The M7 schools continue to have an aura of exceptionalism that most other schools envy. Harvard Business School, Stanford Graduate School of Business, the Wharton School at the University of Pennsylvania, the University of Chicago’s Booth School of Business, Columbia Business School, MIT’s Sloan School of Management, and Northwestern University’s Kellogg School of Management may trade places in the full-time MBA program rankings, moving up or down a few places year to year, but they continue to be regarded as, generally, the best programs in the world.
Which is not to say that a select few other schools don’t have a legitimate claim to belonging among this elite of the elite — or that it shouldn’t be expanded to a Terrific 10, or even 12. Shining particularly brightly, lately, have been Dartmouth College’s Tuck School of Business (ranked No. 7 in the latest Poets&Quants ranking), UC-Berkeley’s Haas School of Business (No. 9), and Yale School of Management (No. 10). And that’s just in the U.S. — European schools like London Business School, INSEAD, and HEC Paris belong among the world’s best, too. But sorry folks — like it or not, the M7 doors were designed to stay closed, and closed they remain.
THE NUMBERS DON’T LIE: THE M7 IS CONSTANTLY IMPROVING
As good or as much-improved as other schools may be, there is no laurel-resting at the M7 schools. In metric after metric, year-over-year improvement is a constant. According to the latest profiles for the Classes of 2019, average GMAT scores and GPAs are up, acceptance rates are down, graduates’ compensation continues to rise, and the rankings are holding steady.
Three years ago, Wharton’s incoming class’s average score on the GMAT outdid Harvard’s class for the first time ever. A year later, Wharton repeated the feat, outdueling HBS 730-729. But Stanford — which is also the most exclusive of the seven schools, with a ridiculously low acceptance rate that actually went down from last year’s 6.0 to a miserly 5.1 for the Class of 2019 — bested them both with an average score of 737. Stanford’s 3.73 average GPA was best among the M7, too. For the Class of 2019, the numbers have held for both Stanford and Wharton, while Harvard inches upward in both measures (729 to 730 GMAT, 3.67 to 3.71 GPA).
The M7 has seen major progress in another arena, too: gender parity. Three years ago, only two of the seven schools had 40% or greater female enrollment. Now all seven do, led, for the second straight year, by Wharton’s 44%. In diversity, too, most of the M7 are seeing improvement, led by Columbia’s 34% under-represented minority population, and with only Booth and Kellogg backsliding (27% and 25%, respectively).
A LOT OF MONEY OUT, BUT EVEN MORE MONEY BACK IN
But as much as the M7 have improved in the quality of their admits, they don’t make it easy for anyone to attend their hallowed halls. Three years ago, only one school — Stanford — had an estimated total cost north of $200,000. Now all seven do, led by Stanford’s $225,594 (not counting scholarships or fellowships). The least costly is Kellogg, at a measly $200,434.
That’s a lot of money. And those projections are conservative when it comes to living expenses. Most importantly, they are projections for single students with no children; the total cost for someone who is married with two kids is always much higher. A student seeking an MBA at Harvard, for example, will pay about $213,000 if he or she is single; but if they have a spouse and two children, they will pay $296,000, according to the latest estimates.
But don’t lose sight of the salient fact: When it comes to the top seven MBA programs in the world, you’re looking at big-time compensation once you have your degree in hand. No school has less than $125,000 as the median salary for grads, with Stanford pacing the pack again at $140,000, and every school’s median bonus is north of $20,000 as well. Stanford, incredibly, adds a median “other compensation” of $50,000 to the mix. Three months after graduation, no school has fewer than 92% of grads employed or holding job offers.
How does this compare to other schools? According to 2017 Graduate Management Admission Council data, the median total compensation package for graduate business school alumni starts at $75,513. And according to data from a joint 2017 survey by the Association to Advance Collegiate Schools of Business and the MBA-CSEA, the average salary for grads from six of the M7 schools (Wharton failed to report enough data to be included) is $129,769, compared to an average of $112,246 for a set of 129 reporting schools (which included the other six M7 schools). GMAC also compiled a chart in 2016 showing that a graduate business degree pays out a median of $2.5 million over 20 years (see below); according to data from Payscale from the same year, M7 20-year projections were considerably higher, with Harvard ($3.23 million), Stanford ($3.01 million), and Wharton ($2.98 million) leading the way. See all the 20-year projections on page 4.
(See the next pages for much more data on the M7 schools.)