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Wednesday, June 11, 2014 at 1am

Three Factors to Consider When Choosing an MBA Program

Three Factors to Consider when Choosing an MBA Program main image

A lot of applicants believe that once they have actually finished their applications much of the hard work is now over. But then the offers start coming in and they quickly realize that the necessity of choosing one program over others is as difficult as the application process itself. 

So, here’s my primer, with three factors that you may wish to consider when comparing MBA programs and offers which hopefully take some of the anxiety out of the process. Ultimately it boils down to a few issues: return on investment, location, and personality match.

1. Return on Investment

I’ll tackle money first, since this is probably at the forefront of most debates. The issue here is not how much money the school is giving you. The issue you need to consider is there return on investment – how much is the degree worth? Then, and only then, does the amount of the MBA scholarships you have been offered (if any) come into play.

By how much is the degree worth, I am referring to what the typical earnings in the several years after graduation for most graduates of your program, and specifically the specialization that you choose, that is the return on investment of your chosen MBA program. Most schools publish their employment statistics, but these are only for the first year after graduating. You will have to dig a bit deeper and find earnings reports for graduates three or even five years down the road to get a better picture of what people are earning and if there is a solid return on investment. There are many rankings out there that take this into account, for instance Forbes bases their rankings on overall monetary gain when factoring in tuition costs, lost income, and then income after graduating as compared to before.

Once you have found what graduates are earning down the road a few years, now you can compare MBA scholarships. Suddenly, School A offering you US$30,000 in MBA scholarships doesn’t look as good, when their graduates are earning US$25,000 less per year a few years after graduation than graduates of School B, in your desired specialization. This also ties in with a school’s reputation. If you want to focus on asset management, and the program is geared heavily towards pumping out entrepreneurial graduates then you may want to ‘deduct’ points when comparing it to other schools.

The take-home point here is drill down deep into the employment data, don’t look at just first job offers, look at down the road a bit. Don’t just look at general salaries; look at salaries in the industry/specialization you wish to choose. Do all this before considering the MBA scholarship amount.

2. Location and cost of living

You should also be paying attention to location, and a few of the factors that go along with it like cost of living, and networks. The most obvious question is: Do you want to move? If two programs are relatively evenly matched in your opinion, but you want to try living somewhere far away, then maybe a program across the country, or world, is more up your alley.

Money again comes into play here as well; consider the cost of living in each of the locations. Is one city going to leave you with significantly higher debt after two years (or however long your program is) of living there? Can you afford the cost of living with or without loans? These things matter, especially if you have loans and the cost of living begins to compound.

Another huge factor to consider is that of your destination after graduation. Look at the alumni networks for your MBA programs in that city, and research the general reputation of the program in the city. If you want to try living in City A look at which of your programs is better respected and more established there. That network that’s in place is going to go just as far in determining how successful your career is as the degree itself.

3. Personal Factors

Now let’s talk about personal factors. Ask yourself, how much do you have to offer the program? You’re going to get the most out of the program that you fit in best with, and that has a community that you are most enthusiastic about joining. By giving back to that community you gain in experience and by becoming a better-rounded individual. 

The flipside of this coin is to examine how welcome does the program make you feel? A school that is going the extra mile to make you feel welcome and help you integrate into the community is more likely to continue doing so after classes start. Do not discount this fact. Two of the top-three rated stressors in a person’s life is starting a new job, and moving. Starting an MBA program is basically beginning a new job, and you may also be moving to go along with this. A program that is more supportive is going to help ease the transition much more than one that makes you feel as though you’re more of an obligation.

Whether you use these factors here, or some other ones, my final piece of advice is to put these factors on a grid, and rate each school on the criteria. Sometimes seeing everything written out in front of you can help simplify the process immensely, and at the very least is one less thing you need to keep stored in your memory. 

About Matthew Sabourin

Matthew Sabourin is an IT professional from the Boston area. He is currently undertaking an MBA at the School of Management at Boston University, with a specific interest in the functioning of collective investment vehicles, particularly hedge funds. He will blogging regularly thoughout his MBA program. He has a GMAT Score of 730, as well as a 6 on the AWA section, and 8 on Integrated Reasoning. His other interests include fitness, birdwatching, and sports in general.

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