This time last week, Forbes released their biennial MBA rankings of the top US, and non-US MBA programmes. Forbes’ ranking is unique in that they try to measure the return on investment of an MBA using pre- and post-MBA salaries of graduates from five years ago. They also make adjustments for financial aid and cost of living expenses.
This year, the Cambridge MBA was ranked 5th among one-year non-US MBA programmes. Two years ago, we were 4th. Being a numbers person, I was keen to do some analysis to see which were the areas where we have improved and those where we need to do some work on. However, as of today, the analysis on the Forbes website for 1-year MBA programmes still only comprises a slideshow of pictures from the various schools, with no mention of the ROIs of each programme. And they have misplaced the order so that Oxford, which is ranked 6th, appears before Cambridge, which is ranked 5th.
John Byrne of Poets and Quants writes in greater detail about his reservations of the Forbes ranking but I am hopeful that Forbes will release more information about the rankings soon. And of course restore the correct order so that Cambridge actually appears 5th.
While I wait for more information about the Forbes rankings, I should say that at Cambridge, we take ROI for our students very seriously. On the returns side of the equation, I have personally spoken to some strong candidates to make sure that they realise that their particular career aspirations will mean that they might not see a monetary return on their MBA investment for several years to come.
We also make it a point to emphasise to candidates that an MBA is a large investment in money and opportunity cost, particularly for many of our students who have partners and families. Candidates have to start planning early to make sure that they have the finances in place for an MBA. This year, we have tried to help candidates in two ways :- firstly, we have held our fees for the class starting in September 2012 to the current level of £36,000. Secondly, we announced the fees in July, much earlier than before, to allow candidates to know how much they should set aside.
Obviously I cannot guarantee what the fees will be in subsequent years. But I think it is vital that prospective candidates think now about how they should finance their MBAs, in two or three years time. Ideally, they should finance it through their own savings, but if they have to take on debt, they will have to weigh the costs of that debt, especially if the debt has variable interest rates. Candidates should prepare for all scenarios, eg falling ill during the MBA, spending money on flights for study trips or overseas interviews, or even waiting longer than planned for a job.
Candidates should also not assume that they will be automatically eligible for school-bursaries. There is a limit to how much bursary we can disburse and we do look at the degree of financial commitment to the MBA that a candidate has made when prioritising bursary requests.
I’m happy to hear from others about how they intend to finance their MBA.