Top US B-school grads could take more than 10 years to recoup investment

A recent study by Bloomberg Businessweek magazine ranking full-time MBA programs on the basis of returns on investment has found that graduates of the Class of 2010 in the top five US schools (according to the magazine's earlier ranking of top 30 US schools) will need an average of 10 and a half years to achieve a return on their investment.  Overall, the average time required by full time MBA graduates of 2010 to recoup their MBA investment was calculated at 6.5 years which is considerably higher than what their peers from earlier years took.

The reason that the top schools have taken a greater hit has to do with the methodology by which the time required to achieve ROI has been arrived at. The MBA ROI figure has been calculated using a number of data points such as the total dollar amount the average student spends on a degree (tuition, fees and living expenses), the salary foregone during the tenure of the MBA, the median pre-MBA salary and the median post-MBA salary. Students in the top programs usually charge the highest tuition and also admit the cream among aspirants who typically have very high pre-MBA salaries. In fact, the recession has meant that the differential between pre-MBA and post-MBA salaries in many of these programs is very low. Coupled with high tuition, this has led to a longer period over which the total investment may be recovered.