Cost vs. Value: How to Evaluate the ROI of Top MBA Programs

How do you evaluate MBA ROI? Calculate total costs (tuition, living expenses, and lost salary) against post-MBA salary increases and career advancement. When assessing MBA cost vs value, graduates typically recoup their investment within 3-5 years through higher earnings, but factors like scholarships also impact your return.

Why Cost Alone Misleads

MBA program tuition varies from under USD/EUR 20,000 at some lesser known or online schools to over USD/EUR 100,000 per year at prestigious and highly competitive universities. Besides competitiveness, the cost depends on many factors – program format, location as well as whether other expenses are included such as accommodation or books.

For example, candidates who choose a full-time MBA program would have to quit their job for the duration of their studies. A full-time MBA can be quite intense and takes up a lot of time, which makes it impossible to combine with a regular job. This means students are forgoing their salary for one or two years to pursue their business diploma – a significant opportunity cost that candidates have to be prepared for.

However, focusing solely on these upfront costs paints an incomplete picture. The true measure of an MBA’s worth lies in its MBA ROI (return on investment) – what you gain versus what you spend. A program’s higher or lower price tag does not always reflect its full value – it’s more important whether it accelerates your career and increases your earning potential.

Graduates from top-tier programs often recoup their investment within three to five years through higher salaries, leadership opportunities, and access to a diverse network. The key is understanding how to evaluate both the tangible and intangible returns.

Direct & Indirect Costs

To better understand what is included in MBA tuition and related costs, let’s break down the expenses listed for the INSEAD Full-time 10-month MBA in France.

Tuition fee for the August 2026 intake is EUR 109,860. The school states that the fees cover “all printed course materials, access to the INSEAD library, access to on-campus information technology services, student council fees, EUR 150 alumni association subscription fee, gym access, business cards, printing and health insurance.”

One extra expenditure that is not included in the price is an optional Business Foundations Program, which costs EUR 2,000 (for the August intake).

Estimated Living Expenses at INSEAD (Fontainebleau, France campus)

If you move abroad or even to another city, the living expenses also change dramatically compared to studying at home. Some business schools publish helpful information about the standard of living at their campus location to aid applicants and incoming students in planning their budget.

INSEAD has provided such information based on their student data to show that a single participant can expect the following basic expenses for the whole 10 months of their studies:

Value Drivers of an MBA

While the costs of an MBA are tangible and immediate, its value often continues to manifest itself throughout the years and the whole career of the MBA graduate.

The alumni network is perhaps the most underestimated asset for candidates as it opens doors that may not have been available without the environment of an MBA. Top MBA programs connect you with graduates from many different industries, nationalities, and backgrounds. Eventually, some of them might turn into collaborators, mentors, clients, and employers. These relationships could lead to job opportunities and business partnerships that would otherwise be impossible. So you shouldn’t be surprised that the strength of an alumni community directly impacts your post-graduation prospects.

A more recognizable benefit for MBA participants is the brand prestige of their university. The reputation of your institution may help you get your foot in the door when approaching potential employers or investors for the first time. However, be careful not to assign too much importance to prestige. While schools like Harvard Business School (HBS) or London Business School carry recognition and credibility, the brand cannot help much if your profile or CV is not the right fit for a particular job. Be sure to choose an MBA program that aligns with your aspirations and budget, even if it’s not the biggest name in the world of education.

Modern MBA programs offer specializations in fields like fintech, sustainability, healthcare management, or data analytics. These concentrations provide expertise that can help differentiate you from the other MBA participants and complement your business knowledge with industry-specific skills.

A Simple ROI Framework

Calculating your MBA return on investment doesn’t have to be difficult. While many schools provide a top MBA ROI calculator on their websites, you can also create your own simple calculation using these steps:

Step 1: Calculate Total Investment: Add tuition, living expenses, lost salary, and additional costs like travel or materials. For example, a two-year program at a top school might total EUR 250,000 including opportunity costs.

Step 2: Project Post-MBA Salary: Research average salaries for MBA graduates in your target industry and role. Career services offices and alumni surveys provide reliable data. Subtract your current or pre-MBA salary to find your annual salary increase.

Step 3: Calculate Payback Period: Divide total investment by your expected annual salary increase. If you invest EUR 250,000 and increase your salary by EUR 50,000 annually, your payback period is five years.

Step 4: Consider Long-Term Gains: Factor in career acceleration, promotion velocity, and cumulative earnings over 10-20 years. MBA graduates often reach executive positions faster than peers without the degree.

Sample ROI Scenarios

As Daniel Huizinga, a The University of Chicago: Booth School of Business MBA alumnus and management consultant, says for Fortuna Admissions:

“It’s not just about salary. You have to factor in all your expenses – travel, health insurance, whether your partner is contributing – and build a model that’s personal to your situation.”