3 Aspects To Consider When Paying For Business School
Business school is an expensive investment. For many students, it generally means two years without much income. Therefore, it’s important for prospective students to consider the worth into socking so much time and money into a graduate business degree.
U.S. News & World Report recently reported on three aspects that students should consider when determining whether a grad degree is worth the investment.
When Borrowing Money, Look at How Much You’ll Be Earning
Mark Schneider is the vice president and an institute fellow at American Institutes for Research. He’s also the co-author of the American Enterprise Institute’s January paper “The Master’s as the New Bachelor’s Degree: In Search of the Labor Market Payoff.”
“There’s a standard rule of thumb that you should not be borrowing more than what your expected first-year wages are,” he tells US News.
For business students, there is good news. In his paper, Schneider analyzed postgraduate earnings from three states and found that master’s degrees in business, engineering, and real estate yielded the highest-paying outcomes.
“If you’re going to make $100,000 a year, then borrowing $80,000 is fine,” Schneider tells US News. “But if you borrow $80,000 with expected earnings of $30,000, then that is not fine – you’re going to be in trouble unless you have some other income.”
Take Note of Labor Market Payoff
Experts suggest prospective students to look at job outlook data published by the Bureau of Labor Statistics when considering grad school. Industries, like healthcare and business, tend to yield high payoff and stable job outlook.
For example, according to BLS data, pharmacists tend to earn around on average $120,000. Demand for the profession is expected to grow by 6% from 2016 to 2026.
In the business world, consultancy ranks the highest in average income after graduation. The average salary for 2016 consultancy graduates of full-time programs was $126,919, according to US News.
Is Prestige an Important Factor in Your Field?
In business, prestige carries more weight than other fields. In this case, prospective business students should consider prestige when looking at business schools.
Scott Rostan is the founder of Training the Street, a New York-based company that prepares college and b-school grads for finance jobs. Rostan tells US News that top financial companies only recruit from top business schools. And at top business schools, tuiton tends to cost more than $60,000 a year. At Stanford Graduate School of Business, single on-campus business students can expect to pay $112,797 for one year of education, according to Stanford’s website.
Rostan adds that prestige schools will pay off for business students in providing quality networks and opportunities.
“Many times the schools are prestigious because they’re known quantities,” Rostan tells US News. “You’re not going to get in trouble for hiring someone from a top business school.”