How to tell if going to Harvard or Wharton (where grads bank well over $175k a year) is really worth it, and how you could end up buried in debt
You don’t need to be a finance major to judge the payoffs of getting an MBA.
Two hundred thousand Americans have graduated from MBA programs in the US each year since 2010 — and the costs for such programs can reach as much as $130,000 in tuition alone. Those coming from prestigious programs like the University of Pennsylvania, Columbia, Stanford, and Harvard, stand poised to rake in salaries of well over $175,000 three years after graduation, according to a new analysis from lending and wealth management advisory Social Finance (SoFi, for short).
SoFi examined 60,000 student loan refinancing applications to determine which MBA programs churn out the highest earners, and which produce grads who are mired in student debt. Such loan burdens can subsist for decades.
According to SoFi, these are the top 10 business schools, ranked by average salary three years after graduation:
1. University of Pennsylvania (Wharton School of Business): $224,034
2. Columbia University: $189,295
3. Stanford University: $186,534
4. Harvard University: $184,463
5. University of California, Berkeley: $171,270
6. Dartmouth College: $169,498
7. Northwestern University: $167,770
8. Cornell University: $167,544
9. University of Chicago: $166,215
10. Massachusetts Institute of Technology: $165,666
For context, the average salary for all MBA graduates nationwide is $109,992.
Joseph Vijay Ingam, the head admissions consultant at SOSAdmissions.com and an MBA holder from UCLA, explained that the salary differentials amount less to the schools’ reputations or teaching quality (they’re all excellent, he noted), and more to other factors.
“Certain schools with nonprofit management programs — [like Stanford] — have slightly lower salaries,” Vijay Ingam told Moneyish. “Schools like Wharton who have extremely strong finance [backgrounds] are going to have higher salaries.”
“That doesn’t necessarily mean that if I was a finance grad at Stanford or Harvard that I would make less money on average than a finance grad at Wharton,” he added. His interpretation suggests that the students who graduate from programs specializing in areas correlated with lower earning potentials could have lowered the averages in SoFi’s data, explaining the salay spread.
While many of their average salaries are impressive, some programs offer a better bang for your buck than others — that is, the programs with the highest earning threshold and lowest average debt could be the most appealing for those who want to shave down the many years it takes to pay off student loans.
These 10 programs have the best salary-to-debt ratio in the US:
1. University of Wisconsin-Madison: Avg. salary = $122,532; avg. debt = $52,568
2. Brigham Young University: Avg. salary = $114,559; avg. debt = $50,224
3. Harvard University: Avg. salary = $184,463; avg. debt = $83,337
4. Stanford University: Avg. salary = $186,534; avg. debt = $85,443
5. Villanova University: Avg. salary = $136,464; avg. debt = $63,014
6. University of Pittsburgh: Avg. salary = $149,157; avg. debt = $71,471
7. Loyola University, Maryland: Avg. salary = $122,915; avg. debt = $59,029
8. North Carolina State University: Avg. salary = $92,184; avg. debt = $46,140
9. University of Florida: Avg. salary = $110,942; avg. debt = $56,035
10. University of Houston: Avg. salary = $105,476; avg. debt = $54,308
For the record, the average debt held by MBA grads, according to SoFi, is $74,707, three years after graduation.
In spite of these financial considerations, Vijay Ingam said that prospective MBA students should pay attention to three factors: What they want to achieve professionally from business school; the networking opportunities offered by these programs; and the difficulty underscoring acceptance at these highly selective schools.
In Vijay Ingam’s view, if you’re gunning for a career on Wall Street, your best bets would be programs like Wharton at UPenn, the Booth School of Business at UChicago, and the University of Texas, Austin. If your interests are more technical, you might be better aligned with business programs at Stanford and UC Berkeley, the Northern California enclaves for “digital entrepreneurship,” as he put it. But, he cautioned, that’s not to say that graduates from any of the other programs aren’t positioned to do equally well.
“The truth is, a finance grad from any of these schools is going to have great opportunities; a nonprofit grad from any of these schools is going to have great opportunities,” he speculated.
Finally, Vijay Ingam concluded: “Don’t forget the importance of financial aid in the decision. Wharton may have the best finance program in the world, but if the University of Chicago makes your day and gives you a great financial package, you’ll oftentimes end up going to your third or fourth choice just because it’s worth your while.”
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