Investing in Yourself: What's the Best Way to Get an MBA?
July 21, 2010
I'm 31, have a good job with a good company, but I want to get an MBA. What's the better choice? Keep my job and go to school at night or take out loans and go to school full-time?
I've always thought that education is a great investment, whether you're seeking to improve your earning potential or simply to enrich your mind. So I applaud your desire to get an MBA.
I don't think there's an obvious answer to this question, but to my mind, the decision boils down to two issues: What do you want from your grad school experience? And what can you afford?
Full-time vs. part-time
The full-time option gives you the best opportunity to have a truly transformative learning experience. You'd be fully immersed in your class work, and you'd form friendships and connections with your classmates that could serve you well over your career. You would "live and breathe" B-school for two years, and that experience might be as valuable as what you learn in the classroom.
On the other hand, if you're primarily looking to add to your skills, knowledge, and expertise, then the part-time route might be just as effective—and probably considerably cheaper.
What will it cost?
Affordability is important. As I'm sure you know, business school is expensive. A full-time MBA student at University of California, Berkeley is looking at a total (including room and board) two-year budget of more than $128,000—and that's for state residents. A private university with a big reputation will be even higher. And don't forget the "opportunity costs" of quitting your current job; you'll essentially forgo two years of income (somewhat less if you work during the summer between your first and second year).
I'd definitely look at the numbers for the programs you're interested in and make a realistic assessment of how much you'd have to borrow. What would your monthly student loan payments be after you've finished your MBA? (I ran one example: If you borrowed $100,000 at 6.8%, the current rate for Federal Stafford Loans, and repaid it over 10 years, your monthly payment would be roughly $585.)
Next, try to approximate your post-MBA earnings potential. Depending on your career aspirations and the reputation of your program, you might be able to make some assumptions about the salary you'll be able to earn with your new degree. That will help you decide if the expensive, full-time MBA experience is worth the money.
Put another way, if you were going to move from a job that paid $50,000 to a job that paid $130,000 (the median total pay package for a graduate of Harvard Business School in 2008), then you could make a pretty good case for going for the high-powered MBA and taking on some debt to get there. But if you don't think the upside potential is so great, a more prudent approach might be to pursue a degree in your spare time.
Plus, if you enjoy your current job and make a good salary, why give it up? (And have you checked with your employer to see if they support educational pursuits? Many do.) Your life as a worker and a student may be painfully busy, but it sure sounds nice to maintain an income and avoid at least some of the debt an MBA program will likely require.
There's another factor that should go into your decision-making: Can you handle working and going to school at the same time? If the two together require more energy than you can muster, then don't even try.
Is an MBA the only way?
One final thought: I'm a staunch supporter of education, whether it's for career advancement or just personal enrichment. Still, you might ask yourself, "Do I need an MBA?" If your career objective is to be a CEO, say, or a management consultant, an MBA is probably essential. If not, then perhaps some focused coursework on subjects you need to know would be sufficient. A working knowledge of finance or accounting or marketing might be all you need to thrive in your current job (or move up to your next one).
I realize there's no easy answer here—or even a right answer. There are pros and cons to both sides, and the right answer is going to be based on a realistic assessment of your personal needs, strengths, and resources. But thinking through these kinds of issues is the only way to make a good decision. Good luck!
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