MBAs Don’t Shine Like They Used To: Why Students Are Skipping B-School
That’s just one of the many things they don’t teach you in B-school — as well as how many times it’s acceptable to bring up your MBA in conversation. The Master’s in Business Administration (MBA) was once a student’s golden ticket into a high-value gig in corporate America, but that’s changed in recent years.
Hold the crown: Today, layoffs and stagnant starting salaries have made the MBA less of a sure thing — and a weaker MBA job market has kept students on the sidelines during the fall period when they’d usually return to school.
Applications among 17 of the top 26 business schools have also declined over the last seven years. And for some, it’s become too expensive to bear. Among the top 25 MBA programs, the average tuition has jumped 9.5% over five years — with 19 of them costing over $200K. Is it worth it? That depends on which school you go to:
- The average of the ten MBA programs leading to the highest salaries had an average compensation of $193K — while the lowest ten ranked had a total comp of $53K.
- 86.4% of MBA students had employment within three months of graduation — compared to 92.4% at the top 25 B-schools as tracked by Poets&Quants.
It’s not just MBAs, either
In March, 56% of Americans polled said that a four-year degree wasn’t worth the cost — while in 2023, 1M fewer students enrolled in college than before the pandemic. With high tuition and borrowing costs, many have turned to alternatives like career training programs, certificates and coding bootcamps:
- Between 2012 and 2021, the number of annual new apprentices in apprenticeship programs, which trains students in one skill, jumped 64%.
- Virtually all trades saw increases in enrollment, with construction trade programs leading the way — rising 19.3% year-over-year between spring 2021 and 2022.
Expensive but still valuable: In 2021, those with at least a bachelor’s degree saw a 66% wage premium over those with only a high school diploma. One report suggests that they will also make 75% more in lifetime earnings and experience lower unemployment rates. In 2022, the unemployment rate for workers with only high school diplomas was nearly double that of degree holders, who experienced a mere 2% unemployment rate. And if you do decide to pursue an MBA, just remember, don’t leave your cheese pita on “oven” instead of timing it for the toaster thing.