Current university students, and those thinking about studying at university, are no doubt be familiar with the mantra concerning return on education: ‘Tertiary education helps to increase earning potential’.
In the business world, high return on education is prevalent as employers from multi-million dollar companies search for the sharpest minds and offer them top dollar in return for their potential to help grow business operations and profits.
Return on education is one of the biggest selling points for studying a Master of Business Administration across the globe. And why not? An MBA is designed to provide an education that grants students technical, experiential and hands-on business knowledge several tiers above the norm. MBA-educated professionals are often seen as the elite in business culture – the people with the right training and knowledge to solve problems and get things done.
It stands to reason, then, that MBA programs around the world provide a pathway to salaries above the average. This was illustrated by research recently undergone by US wealth management company SoFi.
SoFi analysed more than 60,000 student loan refinancing applications submitted by American business school students who studied an MBA between 2014 and 2017, in order to determine the financial realities of MBA graduates.
Their findings revealed which US schools were producing the highest-paid MBA graduates.
Students from the University of Pennsylvania’s Wharton Business School were recorded to be the best paid graduates, with an average gross income of $224,034*.
Columbia University took second place at an average gross income for graduates of $189,295, and Stanford ranked third at $186, 534.
According to SoFi, the lowest ranked Ivy league school, Yale, was 12th on the scale of best paid business grads, with an average gross income of $158,170.
Salaries for MBAs continued to rise over the research period, with 2017 reporting average salary of $173,888 while in 2018 the highest reported average salary was over $220,000.
SoFi’s findings concluded that MBAs continue to be highly valued assets that can lead to lucrative careers in growing fields – even the lowest average salary on their list this year is still $139,776.
However, the finance company also pointed out that return on education for MBA graduates was also dependant on the student loans that they bring with them into the real world.
“Striving for the highest salary is great, but if you’re also saddled with a ton of student loan debt, your seemingly-grand paycheck can shrink in an instant. That’s why it is important to consider schools that consistently provide grads with a great salary-to-debt ratio.”
University of Wisconsin-Madison had the best result in 2018, with a 2.33 salary-to-debt ratio ratio. This dropped BYU to second place, with a 2.28 salary-to-debt ratio, and Harvard rounded out the top three with a 2.21 salary-to-debt ratio.
*Salaries are in US dollars