MBA worth the cost, say graduates
Nearly 70 per cent of alumni who took out loans to fund their MBAs are still in debt more than three years after graduating, an FT survey has found.
The poll of alumni around the world who graduated in 2007 revealed that the total bill for an MBA then averaged $132,600, including living costs, interest on loans and loss of earnings while studying. Taking into account inflation and fee increases, the cost faced by students starting an MBA in 2011 will be higher still.
Of the 1,370 graduates who completed the poll this month, 63 per cent borrowed money to fund their studies. On average, they ended up indebted to an average of 54 per cent of the total cost of completing the degree.
More than three years after graduation, 69 per cent of alumni who took on debt had yet to finish paying it off, and more than a quarter still owed 60 per cent or more of the original loan.
But in spite of the high cost and subsequent debt, most alumni felt the MBA had been good value. When asked to rate the worth of their degree from one to five, where five meant extremely valuable, the average score was 4.4. There was little variation among alumni, regardless of the cost of the programme or debt levels, and 56 per cent gave their degree a rating of five.
Ticket to learn
Every idea has its day. More than a decade after the concept of lifelong learning became common parlance in business schools, deans are beginning to put their money where their mouths are, offering MBA students the opportunity to return to school long after they graduate. What’s more, it’s free.
The University of Pennsylvania’s Wharton School was the first to offer free executive education courses to alumni once every seven years after graduation. The Haas School of Business at the University of California Berkeley, San Francisco, is following suit, offering MBA students the opportunity to return to the school to study for two days within five years of graduation. Any subsequent course or additional days are discounted by 15 per cent.
“We really wanted to instil the behaviour of lifelong learning,” says Whitney Hischier, assistant dean of executive learning at Haas. “The MBA is just the beginning.”
Berkeley will offer the deal to all its alumni – full-time, part-time and executive MBA – and for any of the school’s open-enrolment programmes. Hischier says a fair number of courses are just two or two and a half days in length.
One of the first deans to moot the idea of free executive courses for MBA alumni was Glen Urban at MIT Sloan School of Management, about 15 years ago. He proposed a voucher system to enable graduates to “buy” executive courses.
Such schemes consolidate loyalty among alumni, and, as Hischier points out, MBAs are good students to have in executive programmes. “They’re graduates of our brand,” she says.
A digital leap
It is not just the Beatles that have taken to Apple’s iTunes digital entertainment store. Insead is the latest top business school to join iTunes U, the technology company’s education content provider.
Video lectures, interviews and research will be available free of charge on the iPhone, iPod and iPad.
Insead is not the first to see the appeal: Duke University in the US was an early adopter of the technology, and in Europe, HEC Paris and Saïd Business School in Oxford are enthusiasts. The appeal of free education is obvious to students, but for schools the investment is as likely to be allocated to the marketing budget as to that for research.
Insead’s material is well suited to iTunes because the school – with campuses in France, Singapore and Abu Dhabi – is accustomed to using technology to enable distance learning, says Ilian Mihov, management professor. Its content will be available in English, Chinese and Arabic.
Explore new frontiers
MBA electives used to be all about finance or accounting. Now, diversity is the name of the game, with ethics, the environment and entrepreneurship prominent among the latest elective courses.
HEC Paris has launched a course on “combating corruption” that focuses on ethical decision making. Meanwhile, at Dartmouth College’s Tuck School of Business in New Hampshire, you can study “congressional hearings and testimony” lest you should be called to Capitol Hill.
The University of Chicago Booth School of Business’s “clean-tech lab” elective lets students undertake a project involving green technology. On MIT Sloan’s “business of water” elective, you can visit Singapore and China to study the challenges surrounding water supply.
NYU Stern’s “luxury marketing 2.0” explores the impact of new technologies on luxury goods and how they are marketed, and at Chicago Booth, students can opt for the “building internet start-ups” elective taught by entrepreneurs.
Jake Cohen, dean of the MBA programme at Insead, advises students to consider a range of electives. The experience could open their minds to areas of work they have never thought about, he says.