Pursuing an online MBA is not a cheap endeavor.
Some of the largest and most prestigious programs can cost a student over six-figures–all just to learn online. At the same time, other universities offer relatively affordable online MBA programs, running sometimes less than $30,000.
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Despite the price point, one of the biggest considerations for any MBA student is the return on investment (ROI), specifically whether the degree will lead to a higher salary. The good news is that the clear answer is yes, an MBA historically leads to more money. In fact, according to the Graduate Management Admission Council (GMAC), the MBA is one of the only degrees that can more often than not lead to a salary increase after accounting for inflation.
Sameer Kamat, founder of MBA Crystal Ball, an MBA admissions consulting firm, says that despite the fact that recruitment volumes may have dropped, salaries for graduates of top MBA schools have not.
However, these trends have many variables, and just because an individual has an MBA, it doesn’t necessarily guarantee a higher salary. While traditionally, individuals obtain their MBA via an in-person experience, online MBAs continue to rise in popularity. But do the salary trends stay true for online programs? Fortune has what you need to know.
Will an online MBA result in a higher salary?
While no degree program absolutely translates into a higher salary, online MBAs generally do lead to higher salaries—especially from some of the more prestigious and well-known programs.
While salary changes may not be as dramatic as compared to traditional MBAs— in which students are not working—with online MBAs individuals can generally use their new degree as an excuse for a promotion or a shift to a new role or industry. In fact, students may be able to obtain salary increases before even graduating from the online program (case in point: one student from the University of Illinois was recently able to land a 43% salary increase before he even graduated from his online MBA program).
One example of the impact an online MBA can have on salary is from data from the University of Washington (Foster). Recent alumni experienced median salary increases of over $38,000.
Online MBA students obtain critical workforce skills when they “wholeheartedly invest” in the program’s networking opportunities in addition to the coursework, according to Lorna Patches, executive director of the professional resource center at the University of Kentucky’s Gatton College of Business and Economics.
“You’re investing not only tuition, but time, energy, and a commitment from your family for their support,” Patches says. “From working with candidates across all of our programs, the return on investment is head and shoulders above what’s invested in terms of tuition for the program.”
How do salary prospects stack up for different types of MBA programs?
An MBA candidate may spend considerable time debating the pros and cons of various types of MBA programs. While earning potential is generally similar for graduates of online MBA and traditional, in-person MBA programs, Kamat says it depends on what industry and role a student is aiming for.
“There are MBA roles in some industries where pedigree is a non-negotiable factor,” he explains. “Think elite management consulting, investment banking, (and) private equity. This is why these industries have their favorite hunting grounds to recruit fresh talent. In fact, in management consulting, what the students have done before their MBA does not carry as much weight as the reputation of their alma mater.”
Other fields, like tech, retail, and manufacturing, are areas where pre-MBA experience may carry more weight, he adds.
The value of the degree doesn’t change with an online program
At the University of Mississippi, online MBA graduates’ salaries range from $100,000 to $250,000, which is on par for mid-career business professionals, according to Walter Davis, faculty director of MBA programs and professor of management at the University of Mississippi School of Business Administration.
Created in 2006, the online MBA program at Ole Miss is well established compared with other online MBA programs, Davis says. Because graduates are learning from the same professors and gaining the same skills as traditional MBA students, he adds, students should be confident in an increased earning potential from their degree.
“You should weigh the reputation of the programs that you’re considering against the cost of tuition, the cost of the materials,” Davis says. “It’s a highly personal decision as to whether the value, cost, and reputation put together makes sense as an investment for your career.
Frequently asked questions
How much will an MBA increase my salary?
MBA salary increases depend on many factors, but the estimated median salary of MBA holders in 2023 was $125,000, according to GMAC.
What is the highest salary for an online MBA?
In high-paying industries like consulting and finance, it is not uncommon for MBA degree holders to have salaries around $200,000. However, there is no highest salary an individual can get after an online MBA, and the degree alone does not guarantee a salary increase.
Does it matter if you get your MBA online?
Generally, no, employers do not care about the format of your MBA. Program prestige, skills learned, and pre-MBA experience are factors that are most often at play.
Are expensive online MBAs worth it?
An expensive online MBA can be worth it if you value the school’s prestige, curriculum, and overall experience. However, an expensive school does not always lead to a high-paying job or promotion.
Check out all of Fortune’s rankings of degree programs, and learn more about specific career paths.
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