Is an MBA Worth It?

As a general rule, advanced degrees can result in increased earning potential throughout your career. And this is definitely true when it comes to Master of Business Administration, or MBA, degrees. The average MBA earns a six-figure salary in all 50 states, and many even receive signing bonuses and increased job security.

However, an MBA can be an expensive degree to get. In this article, we'll take a closer look at the costs and earning potential of MBA programs, and how to determine whether pursuing an MBA is a wise move for you.

How much does an MBA cost?

There's no set cost of an MBA -- it depends on where you choose to go to school. According to data from the Education Data Initiative, the average MBA degree costs about $61,800, but this can vary tremendously. A Harvard Business School MBA will cost nearly $113,000, while it's entirely possible to complete an MBA at an in-state school for less than $20,000 in some cases.

However, these figures just refer to tuition costs. Including tuition, fees, living expenses, healthcare, and other costs associated with attending school, the true cost is likely much higher.

According to a Business Because report in partnership with Emory University, the total cost of attending an MBA program in the United States in 2022 was $225,605 including all of the above expenses, and the typical program takes two years to complete. The total cost ranged from $84,500 to $246,506, depending on the school. This is money that could be invested or saved instead. So it's not entirely the on-paper cost that's the problem, as there can be a high opportunity cost associated with a higher-level degree.

However, it's worth noting that this could be deceptively high depending on your situation -- for example, if you are completing an MBA program while continuing to work (as opposed to being a full-time student), your healthcare and living expenses are roughly the same whether you are enrolled in the MBA program or not.

How much can you earn with an MBA?

According to ZipRecruiter, the national average salary for someone with an MBA is $137,407 per year. The salary range for the 25th through 75th percentiles is $97,000 to $193,000. Of course, there are other factors, such as the nature of your job, your experience, and more.

There's also a big difference between geographical locations. A worker with an MBA in Washington State earns an average salary of $162,890, but in Arkansas, you can expect to earn $103,276 on average.

It's also important to compare the income you might expect to get from an MBA to what you can earn without it. In other words, think of it in terms of the potential pay increase. Is it worth spending $100,000 for a degree that gets you a permanent $30,000 annual pay increase? Maybe. But is it worth spending $100,000 to add another degree to your resume but still earn roughly the same salary you do now? Probably not.

Is an MBA worth it to you?

The question isn't whether an MBA is worth it. The better question is whether an MBA is worth it for you. By taking the costs (and possible missed opportunities to contribute to your savings account) and expected future salary into account, you'll be in a strong position to make the best decision for your future.