The MBA is arguably the only degree where every student completes a cost-benefit analysis before enrolling. FT research reveals that the average cost of completing an MBA at US schools is more than 30 per cent greater than at their European and Asian competitors.
Using information submitted by alumni of schools that participated in the 2012 MBA ranking, the FT calculated the average total direct expenditure incurred. This figure includes living expenditure as well as tuition fees. To enable analysis by region, costs were converted to US dollar purchasing power parity equivalent figures.
The average total cost is very similar across Europe and the Asia-Pacific region – approximately $70,000 in the latter, $67,000 in the UK, and $74,500 in the rest of Europe. However, in the US, where both fees and living costs are higher, the average total cost equates to roughly $99,000. This difference correlates to the variance in programme lengths. While most European programmes last 12 months, US-based MBAs have an average length of 20 months.
Partly offsetting the relative expense of studying in the US is the significantly greater financial assistance offered to students. The average value of reported grants and scholarships was $20,600 per student, in contrast to only $7,000 in the UK.
Such redress only partially offsets the relative expense of longer programmes. Moreover, the salary lost while studying for longer, compounds the true cost of US programmes.
For further updates, follow us on twitter @ftbuseducation #FTranking