Education

How To Get An MBA Degree

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 13 minute read

Is the MBA degree becoming too popular too fast? According to C. S.-W.’s article in The Economist, “[e]asier access to an MBA has transformed what the MBA represents to companies.” Having an MBA is no longer unusual and should not be seen as a guarantee of employment because of this.

According to Forbes, more than 191,000 Americans received MBAs from accredited institutions in the wake of the 2011–12 school year. Nearly three times as many doctorates were awarded to women as to men during 1970 and 1971. A master’s in education, the second most common graduate degree, was earned by less than 24 percent of students in 2011–12.

Despite reports that most MBA graduates are pleased with their careers, evidence of an MBA oversupply can be seen just about anywhere. There was a 74% increase in the number of business degrees awarded by American institutions in 2011-12 compared to 2000-01, reports Jordan Weissmann of The Atlantic. Tuition for MBA programs increased by 24% between 2009 and 2012, outpacing even the modest salary losses seen by recent graduates.

Top MBA schools may cost upwards of $70,000 per year for full-time students. You may expect to spend more than $100,000 per year on your education if you include in things like health insurance, housing, and course materials. Members of the HBS class of 2020 who live in campus housing will spend more than $109,000 per year in tuition and fees, excluding grants and loans.

While the job market for recent MBAs may seem grim, there is some good news. Whether the job market is tight or not, an MBA degree may help you build a strong professional network, gain reputation in your field, and increase your earning potential throughout the course of your career.

Perhaps one of the best (and most financially rewarding) choices you can make for your career is to earn a Master of Business Administration degree. As we move on, we’ll examine in further detail:

  • Pricing and Structure of MBA Programs
  • Benefits of an MBA Degree
  • Convincing Reasons to Reconsider an MBA Degree
  • How to Pick the Best MBA Program for You
  • Getting ready for and submitting your MBA application

What Is an MBA and How Much Does It Cost?

There are six different types of MBA programs, as identified by The Princeton Review.

  1. Masters of Business Administration Program. The typical time to complete a full-time MBA degree is two years. It’s standard practice to have students reside on or close to campus. The amount of time spent in class or on group projects each day can range from two to four hours, with many more hours spent on reading and assignments outside of class. MBA programs often discourage students from working full-time, however dedicated students may be able to find work in consulting or freelancing throughout their studies. Your MBA will set you back $360,000 if you don’t account for foregone wages on top of the $80,000 annual tuition and fees.
  2. Mini-Master of Business Administration. A typical MBA program takes at least three years to complete if taken on a part-time basis. Even though more and more people are taking classes online, they are geared for working students who live within commuting distance of campus. You can take as many or as few credits as you like each semester depending on your schedule and your ability to handle the task. Although the cost of an online MBA program is similar to that of a traditional, on-campus MBA program, the financial burden is lessened by the extended study period and the absence of housing and meal expenses. In addition, working professionals might continue to pursue an MBA degree part-time.
  3. Distance learning master’s of business administration. When compared to traditional part-time MBA programs, online MBAs provide even more flexibility. They can be made longer to fit along with work and family commitments, but typically last between two and three years if progress is made at a leisurely pace. There is no geographical or residential requirement, per se. Considering the quality of the school is crucial because many online MBAs are not highly rated by top-level executives. Yet, several top universities now provide online MBA programs that are on par with traditional programs in terms of prestige: Universities such as UNC-Chapel Hill and USC’s Marshall School of Business may be included among Princeton Review’s top 25 online MBA programs. Costs are comparable to those of part-time MBA programs and are dependent on the number of credits taken.
  4. MBA for those in their early professional years. Early-career MBA programs typically last between two and three years. They are crafted with first-time employees in mind, meaning that students may benefit from them as well. This is the best for those who want to get it over with quickly or who want to take only a year or two off after graduation. Although many standard MBA schools will take younger students, those geared at those just starting their professional careers are known as “true” early career MBA programs. You have the option of enrolling in either a mainstream program that is suitable for newcomers or waiting for an early career program. In either case, make sure the MBA program has what Princeton Review considers to be essential features for early-career professionals, such as minimal or nonexistent work experience requirements, strong career placement services, a practical curriculum, an active mentorship program, and a large and active alumni network.
  5. A Master of Business Administration for the C-Suite. Executive MBA programs are designed for working professionals who have already established themselves in their fields and have been employed for at least five years. The majority of programs last between one and two years and include classes during the weekday daytime hours and on weekends. Executive MBA programs are in great demand among high-potential job seekers because their present and future employers value formally recognized knowledge. Companies often help pay for its executives to get MBA degrees. A 2014 study by Poets & Quants revealed 40 executive MBA schools with total tuition of above $100,000; this number is likely greater now.
  6. International business master’s degree. Executives and top-level managers whose responsibilities straddle international borders will benefit most from a global MBA program. Many of the world’s top business schools have branch campuses in other countries where they offer global MBA programs, making it easy for professionals who are not tied down to one place to further their education. Numerous international business administration degree programs are available in the United States. The average duration of a program is between one and two years. Pricing is on par with that of executive MBAs.

MBA-Required Positions

MBAs, unlike certain other professions, are not part of a secret society. MBAs do not have a regulatory body like a medical board or bar association. The MBA does not “practice” like the MD, the attorney, or the CPA.

An MBA is not often required for entry-level positions. Many top-level executives, for example, do not have MBAs. It’s possible that executives who rise through the ranks of a single company will never have the chance or motivation to get such credentials, and their employers may not hold it against them.

However, a great number of businesses need or prefer candidates with MBAs for certain roles. This is more likely to be strictly enforced by larger, publicly listed companies. An MBA is typically required for vice president or higher positions in large corporations. Management consulting firms and investment banks pay a premium for MBAs because their goals are a good fit for the talents MBAs have honed.

Arguments in Favor of Obtaining an MBA

Does it make sense to earn an MBA degree? If you ask recent (and not-so-recent) MBA graduates, you will hear justifications like the ones listed below.

  1. Your Business Network Will Expand

Even MBA skeptics, and there are many, acknowledge that the networking opportunities available to students are invaluable.

According to the U.S. News & World Report contributor Stacy Blackman, “the contacts you build [in your MBA program] are, for many, the single most useful element of the MBA.” “By staying in touch with other graduates, you’ll have a lifelong connection to the university and a wealth of professional resources at your disposal.”

Moreover, you may gain from networking even if you don’t earn an MBA. According to Crunchbase, LearnVest co-founder Alexa von Tobel did not complete her Harvard MBA yet still managed to raise approximately $70 million.

  1. You’ll Learn Marketable Skills and Improve Your Resume

The Graduate Management Admissions Council found that 79% of businesses planned to hire MBAs this year. Sixty-plus percent anticipated that MBA base pay increases would exceed CPI growth.

And almost everyone thought that MBAs were useful to their companies. The upward trend seen in these numbers has persisted for several years. Having an MBA helps you stand out from the competition, but there are other factors that will determine how successful you are in the job market.

  1. It has the potential to increase your earning power and chances of advancement.

The cost of a good MBA program should be covered, and then some. StartClass used the following formula to get the average ROI for the 50 best business schools in the United States:

For each of the top 50 business schools, we took their anticipated 10-year graduation wage and deducted the projected 10-year pay of someone without a business degree. The schools are rated by the percentage increase in compensation over a decade compared to the average wage before an MBA. The ranking factored in a yearly pay rise of 3% for everyone.

The returns on investment at top business schools like Stanford Graduate School of Business and Harvard Business School were above 300%. The return on investment (ROI) at highly respected public universities like Arizona State University was over 250%, with a correspondingly lower out-of-pocket price tag.

You may get a better idea of how much money you could make after graduating from one of the best business schools in the United States if you look at the yearly salary rankings that the U.S. News compiles.

  1. It is a chance to specialize in a profitable or in-demand sector.

Various factors distinguish one MBA program from another. Some promote profitable or trendy niches that might benefit students’ careers, such as social entrepreneurship. If you want to improve your resume but aren’t quite ready to commit to a career that won’t guarantee you any real-world experience, going to an MBA school that provides specialized qualifications or opportunity to specialize is a terrific option.

It may be simpler to enter an MBA school than to land such a position, depending on your background and experience.

  1. It’s an opportunity to reflect and gain perspective.

An MBA program is a once-in-a-lifetime chance to put your career on hold for two years (or more if you go the part-time or online route). Gaining the opportunity to think about your past and future accomplishments is priceless. Getting “outside” of your usual field and making connections with great individuals you wouldn’t have access to otherwise is also quite appealing. Upon graduation from an MBA degree, you may find yourself in a whole new professional field.

Prepare for and Apply to MBA Programs

So, you’ve decided to pursue an MBA because you believe it will help your professional prospects. Everything you need to know to get into graduate business school is right here.

What to Do and When to Do It for Your MBA

It is challenging to generalize about MBA students or the pre-MBA path because business schools actively seek out applicants from diverse intellectual, cultural, and socioeconomic backgrounds. For instance, it is not the case (if it ever was) that candidates to business schools must have a background in economics or an undergraduate degree in business.

However, you should begin preparing for an MBA school at least a few years before you intend to enroll. Here is a high-level schedule of events:

  1. Play Your Way Through College and Beyond in Business. No matter how qualified you are, you can’t just decide to pursue an MBA and start classes the next day. It’s recommended that you begin planning at least a year in advance of when you plan to submit your applications. Think about where you are in your career and where you expect to be in five to ten years. Have a conversation with your superiors, peers, and role models in the workplace. And have a good long think about it. You’re weighing the potential benefits of an MBA degree for your job against your own motivation to seek one. Keep in mind that admissions officers in business schools have seen it all and can tell when an applicant is just playing the system.
  2. Renewal and reinforcement of your resume. Update your resume to include any new employment, school, or extracurricular experiences that are applicable. Do not forget to include any hard or soft talents that may be applicable. In order to succeed, you need to identify your areas of weakness. Do what you can to fortify them.
  3. You should seek programs that meet your preferences and criteria. Learn more about potential courses. It’s best to start the filtering process with wide selection criteria. For instance, if you’re a recent college grad, you may probably pass through applications that require more work experience. You can eliminate a large pool of candidates if you are unwilling to go outside of a specific location. Focus on those courses that will help you achieve your long-term professional and personal objectives.
  4. Prepare yourself for the Graduate Management Admissions Test or the Graduate Record Examination. Both tests are generally accepted by business schools. Both the GMATPrep program and the Magoosh GRE diagnostic assessments are available for free to help you determine where you stand. If both tests are accepted by your prospective schools of choice, go with the one on which you fared better. Three months and one hundred hours of study time are minimum requirements. If you don’t demonstrate significant improvement after taking at least two practice examinations, you might want to consider changing courses. Expert review classes are beneficial, but they can break the bank. To improve your chances of getting into the institutions of your choice, you should aim for a SAT or ACT score that is at least 20 points better than the typical incoming student.
  5. Join the GMAT or GRE. Schedule your exam date a few weeks before you need to submit your applications. If your application has unexpected delays, you want to have plenty of time to make up for the unexpectedly poor performance.
  6. In-Line Citations. It’s a good idea to ask people you’ve worked with and respected professionally and academically to write you a letter of recommendation. You should make sure to have your references lined up at least three months before your application is due to give them the time to prepare the letters and eliminate any reasons they may have for not writing them.
  7. Prepare Your Argument. Take time to carefully consider the argument you intend to make. Never forget that the admissions officers have no prior knowledge of you. Having a less-than-ideal GMAT score, academic background, or professional résumé won’t always disqualify you if you have a compelling personal narrative to convey. Don’t use the same interview answers or essays you submitted for your prior job or college application. Comparatively speaking, business school is a totally new animal.
  8. Find out the requirements and timeframes for each school. Find out what the application deadlines are and how to apply to each institution. More than one round of applications may be required for larger universities. In the first round, you may have a better chance of being admitted, especially if you choose the early choice path, which commits you to attending the school if you are accepted.
  9. Be patient while you wait. You should expect to get placed on a few waitlists. If you apply during the initial round of admissions, when the waitlist rate is greater, this is more likely to be the case. If you find yourself on a waitlist, U.S. News provides a helpful rundown of what to do and what not to do.

What Admissions Officers Look For Can Hurt Your Chances

Each institution’s office of admissions to the business school uses its own unique criteria to determine which applicants to admit. There is a fair amount of scrutiny applied to these selection criteria by most offices, although each one places different emphasis on different factors. Get a feel for what each potential institution is like by talking to current and former students and candidates.

  • Relevant prior work experience is required. Verify that your work history and desired MBA fall within the acceptable parameters. An MBA in its early stages of development requires few resources.
  • Leadership experience or potential is demonstrated. Experience in leadership roles appropriate to the requirements of the specific program you’re applying to is required. The standards for leadership in a global or executive MBA program are higher than in a traditional or beginning MBA program. Even while many entry-level and mid-career candidates have relevant extracurriculars, they lack formal workplace management experience.
  • Acceptable Performance on Measured Tests. Research what the average score on the Graduate Management Admissions Test (GMAT) or the Graduate Record Examination (RnR) is for each program of interest. You won’t be immediately disqualified if your test scores are below average, but they won’t help your application, either.
  • Credible Educational Track Record. The undergraduate academic achievement is given more weight by mainline and early career MBA schools. An applicant’s undergraduate GPA should not be too much of a factor while applying to executive MBA programs. But it’s still important to double-check the prerequisites for each software.
  • Effective verbal and listening skills. Communicating well in writing and orally is essential, as you will need to show in your personal statement, application essays, and interviews.
  • Clear objectives or passions in one’s professional life. Your job history and future aspirations should be discussed at length in your application documents and interviews. To get through an undergraduate interview, you could get away with saying something like, “I’m looking forward to exploring my passion,” but in a graduate school interview, you need more than that. You’ll also need to be able to clearly and concisely describe your background, experience, and how you’ve grown both professionally and personally.
  • Competent Professional References Available. Try to get references from people in positions of authority, such as the dean of your undergraduate institution, the president or CEO of the firm you’re now working for, or a prominent member of your local community. In the worst situation, your first-rate options will all turn you down, forcing you to reduce your standards.
  • Ability to interact with others successfully. Soft skills are as, if not more, important than formal education and experience. Candidate characteristics such as disposition, friendliness, organizational abilities, responsiveness to instructions, and the elusive “fit” are evaluated by admissions committees.

Bottom Line

In other words, no one should force you to obtain an MBA and no one should try to talk you out of it after you’ve made up your mind. If you ask someone, “Should I get an MBA?,” they will probably help you construct a decision tree on a whiteboard that will take ten years to complete. This is the advice of Casey Allen.

Take the opinions of your loved ones and coworkers on the value of an MBA with a grain of salt, he advises, if you decide to find out what they think about the subject. You are the only person who truly understands you.

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