An MBA degree is one of the most desired professional choices for many Indians. Many MBA graduates typically spend years paying off education loans. Some MBA aspirants are not aware of the financial implications of choosing an MBA program. As MBA aspirants think about spending tens or hundreds of thousands of dollars, we want to provide a framework around calculating the ROI of an MBA abroad.
A business degree abroad is obviously a great way to get diverse life experiences and build a global network of professionals. Since we can’t quantify some of the life experiences, we will strictly stick to the financial returns.
Some of the initial factors to consider before calculating ROI of an MBA abroad are:
- Country : The country of education is one of the most important choices during choosing an MBA. Some of the popular choices for Indians include USA, UK, Canada, Australia, and Germany. It is good to choose the country based on its current economic climate. A positive economic environment is better for industry and hence jobs.
- Tuition and living costs : Tuition and living costs are by far the highest while considering an MBA. Most schools give tuition cost and an estimate of living costs on their websites. It is advised to consider other costs such as MBA application fees and travel expenses.
- Post MBA career and salary : It is helpful to understand the salary prospects for MBA graduates entering your chosen field in the particular country. For example, investment bankers have a vastly different payscale compared to most marketers. Likewise, payscales of investment bankers in London are different from those in New York or Hong Kong.
- Visa Availability : Many of the popular Indian destinations for MBA have over the years had tougher laws around visa. For example, in the US, an MBA graduate has only one shot at applying for a H1-B visa (temporary work visa) . If he/she does not pass through the lottery, they may have to leave the country.
- Opportunity Cost : The other major cost of attending an MBA program is the salary foregone for the 2 years. For someone who already has an excellent job with a high salary, an MBA might not make too much financial sense.
- Funds for Education : Do you have savings for your MBA? Are you expecting a scholarship? Are your parents paying for your tuition? Will you need an Education Loan?
ROI on MBA
Based on the ROI, you should evaluate the schools on the following factors:
- Payback Period : How many years will you take to pay back your education loan? If it is more than 5 years, will it impact your career choices?
- Need for Loan : Are there any schools with a high ROI where you might not need to take an education loan?
- Risk of not getting a work visa : What happens if your visa is cut short and you have to return to your home country? If so, how will it impact your education loan? Can you still afford to make monthly payments with a job in your home country?
- Other schools/programs : Are there other business schools or programs that provide better ROI with some of the benefits you aspire for?
While there are no tailor made answers for whether the ROI of an MBA abroad is good, this framework should help you to evaluate the ROI of each program/school and identify the one that fits your requirements. Good luck!