Every business owner knows the importance of tracking return on investment (ROI). What is the benefit of an investment relative to its cost? Tracking ROI — in terms of performance, success and other measures of returns generated — is essential for determining if a business investment or initiative is worth the allocated effort and resources. This evaluation allows business leaders to make informed decisions, leading to improved planning, strategy, growth and future returns.
The same kind of thinking applies to the financial aspects of choosing a graduate-level business program such as the online Master of Business Administration (MBA) General program from Northwest Missouri State University. Will the financial benefits of an MBA outweigh the cost? The Graduate Management Admission Council (GMAC) provides an illustrative MBA Return on Investment (ROI) Calculator that offers a number of snapshots, including total MBA investment, initial pay boost and time to recover one’s investment.
What Is the Cost of an MBA?
One way to evaluate the cost of an MBA is to look at tuition. According to GMAC, tuition for MBA programs can exceed $200,000. Even the cost of online MBAs can reach well over $140,000. Yet, tuition and fees vary from one MBA program to another.
It also is important to consider other factors as well when calculating the cost of an MBA. This includes any application and registration fees. Other potential expenses include:
- Commuting costs (for students enrolled in campus-based MBAs, not living on campus)
- Relocation expenses (for students attending campus-based programs not within commuting distance)
- Books and supplies
- Club and activity fees
- Library and technology fees
- Opportunity costs, such as lost wages (for students who put careers on hold to earn an MBA)
- Interest on student loans
While tuition is typically the most significant expense, these other costs can add up. This is why it makes sense to consider all costs from the start when exploring options for MBA programs.
Online programs can be appealing for many reasons, including potential cost savings. Notably, online students can continue working while earning their degrees, thus avoiding lost wages and other opportunity costs that are critical factors in determining whether a program is worth the investment.
While certain online MBA programs are still prohibitively expensive, affordable programs do exist. For instance, tuition for Northwest’s online MBA General degree is a small fraction of the cost of the most expensive online MBAs. In fact, Northwest’s respected and fully accredited program costs far less than the average MBA, and tuition is the same for in-state and out-of-state students.
How Much Can MBA Graduates Earn?
Anyone considering an MBA probably knows that salaries for graduates can be high — one of the notable rewards of earning the degree. What can MBA graduates expect to earn? How do salaries for MBAs compare to those for workers with only a bachelor’s?
A variety of factors affect salary, such as geographic location and industry. Credentials may also contribute to different wages for workers within similar occupations. Holding an MBA correlates with a higher salary potential, according to GMAC.
The findings of GMAC’s 2024 Corporate Recruiters Survey back up this correlation: A recent MBA graduate in the U.S. has a projected median starting base salary of $120,000 per year. At $69,320, median salaries for recent hires with only a bachelor’s are nearly $50,000 less the MBA median figure.
Is it Worth the Wait?
Judging by the MBA wage premium, earning the degree can certainly pay off over time. Yet investing hundreds of thousands of dollars on tuition and associated costs while losing out on years of income could mean a long wait before seeing a return on investment from an on-campus, two-year program. On the other hand, the affordable tuition, accelerated pace and flexible design of Northwest’s online MBA can facilitate a rapid and substantial return on investment.
Is an MBA worth the cost in the long term? Considering cost and benefit factors like tuition and fees, opportunity costs, program reputation, flexibility of design and projected earnings can help prospective students make an informed decision, putting the ROI of an MBA in a new light.
Learn more about Northwest’s online MBA General program.
