London Business School (LBS) remains at the top in the Forbes’ biennial ranking of the best business schools for international two-year programs for the seventh consecutive year with its alumni reporting a five-year gain of $93,100.
HEC Paris moved up two spots to rank second with a five-year gain of $79,761. IESE Business School was at rank 3 followed by CEIBS (4), ESADE (5), NUS Business School (6), Alliance Manchester (7), AGSM Australia (8), Schulich (9) and IPADE (10).
The Top 3 MBA Gains
LBS alumni reported a 5-year MBA gain of $93.1 K, 3.8 years to pay back, a pre-MBA salary of $65 K and a 2018 salary of $ 197. They had spent $97 in tuition fee and the average GMAT score was 710.
HEC Paris alumni saw a 5-year MBA gain of $ 79.8 K, 3.7 years to pay back, a pre-MBA salary of $53 K and 2018 salary of $ 145 K. They spent $145 K on tuition and had GMAT average score of 690.
IESE alumni reported a 5-year MBA gain of $71.6 K, 3.9 years to pay back, a pre-MBA salary of $ 59 K and 2018 salary of $ 160 K. The average GMAT score was 686.
Forbes noted that despite the disruption in the business school market following a marked rise in shorter, flexible and inexpensive options, the full-time campus-based MBA program continued to remain highly desirable for the aspirants across the world.
Forbes says it considered only one question, whether the full-time MBA is worth it when set against the costs involved for the rankings. The tuition, fees and forgone compensation (in terms of salary and other earnings for the program duration) could be as high as $350,000 at the top schools.
Since most people enroll for an MBA program for a career change and/or greater financial rewards, the ranking is based solely on the median returns on investment achieved by the graduates from the class of 2014.
However, returns for individuals could vary wildly and graduates from business schools outside the top tier may not see such a huge increase in earnings.
For this edition of the rankings, the survey covered more than 100 schools and 17,500 alumni regarding their pre- and post-MBA compensation, career choice and location. Graduates from the best international two-year business schools reported an average 5-year gain of $62,300. However, this is considerably lower than that of the one-year MBA graduates who reported a gain of $91,300.
This could be because those enrolling in one-year programs get the advantage of spending considerably lesser time away from work and having to sacrifice only one-year of salary thus reducing the overall costs.
Graduates of one-year international programs earned back their investment (tuition and two years of lost salary) in 3.1 years on average, while those from two-year international programs earned back theirs in 3.8 years.
Forbes said 25% of the graduates had sent in replies. Those schools from which less than 15% alumni responded were excluded from the rankings. Schools for which alumni had a negative ROI after five years were also not included.
A comparison was made between alumni earnings in their first five years out of business school and their opportunity cost (two years of forgone compensation, tuition and required fees). The total compensation, including salary, bonuses and exercised stock options were taken into consideration. It was assumed that the compensation would have risen half as fast as their post-MBA salary increases had they not attended business school.
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