When Can I Expect A Return On My Business Master's?

A business master's could be the key to a higher salary and brighter career prospects, but how soon can you expect to see a return on your investment?

The benefits of graduate management education are longstanding and far-reaching. Your master's degree can take you to the cutting edge of the business world and to greater heights in your career. But completing a business master’s is no small commitment, and you may be wondering when you can expect to see a return on your investment (ROI).

In this article, we're going to take a look at:

• The factors that influence the ROI of a business master's degree
• How long it could take to see a return on your investment
• The non-financial benefits of a business degree
• Whether it's worth it and next steps
• A calculator to work out your potential ROI

Let's take a closer look.

What factors influence the ROI of a business master’s?

Before you can calculate the return on your investment, you firstly need to think about the different factors to take into consideration when you start a business master's degree.

Tuition fees

The first and most obvious costs to factor in are your tuition fees. This part is fairly self-explanatory, so the only thing we'll add is that some business schools will list annual tuition fees, while others will list fees for the entire program (which could run to two years or more). It's something to bear in mind when calculating the cost of a master's.

Living costs

This one is a little more difficult to calculate, because it depends on so many factors. Are you moving away from home--and if so, where is your chosen business master's school located? Will you be living in the city centre or on the outskirts? Will you be sharing or living on your own?

Many schools provide their own estimates for how much your living costs will be on a monthly or yearly basis. There are also external resources such as NerdWallet or Numbeo that can help you calculate the living costs of different regions.

Remember that if you study a part-time master's online, you may be able to offset some of the cost by working while you study. You also won't need to pay the same travel and living expenses as you would for an in-person, full-time master's degree.

Lost wages (opportunity cost)

You'll also need to work out the so-called opportunity cost of your business master's. If you're studying full-time then chances are you're not working at the same time--so you need to work out how much you're losing in wages over that time.

Of course, you may still be able to work alongside part-time or online programs.

Graduate salary and signing bonuses

While graduate salary shouldn't be the most important factor in your search for a master's, it's probably the most important when it comes to calculating your ROI.

Business schools and universities tend to publish average post-graduate salaries for your program in an employment report, while the Graduate Management Admission Council (GMAC) publishes annual research on the average salaries of business master's graduates.

Some master's degrees tend to command higher average salaries than others. You can find out the highest paying master's degrees here.

How long does it take to see an ROI on your business master’s degree?

This calculation will be different for everyone, and so there is no easy answer. However, exploring alumni salary data and business school rankings compared with the cost of studying will help you to gauge an approximate length of time it will take you to see a return on your investment.

For example, according to the BusinessBecause Cost of MBA Report 2023, the most expensive MBA program in the world is at Columbia Business School. The total cost of the program including tuition fees, living expenses, healthcare costs, and so on totals almost $250,000.

The Financial Times MBA ranking 2024 reveals that within three years, Columbia Business School grads will earn an average salary of around $233,000. As the total costs of the Columbia MBA are just a bit higher than the weighted salary, it will likely take graduates a little over three years to see a return on their investment.

Business school alumni have reported that it takes on average fewer than four years to recoup the cost of their graduate management education. It takes full-time, two-year MBA alumni about 3.5 years to recoup their investment, followed by 2.5 years for one-year accelerated, part-time, online, and executive MBA graduates. Specialized business master’s programs reported a faster ROI compared with MBA programs.

Paige Smith is an MBA graduate from the University of North Carolina’s Kenan-Flagler Business School. She explains how an MBA has changed the trajectory of her career. “The first few months post-graduation were tough as I rebuild my savings," she says. "That said, not only did I triple my salary immediately, but my earning potential is completely reimagined.”

The rate of your return can also be affected by external circumstances, such as the time period when you graduate and current economic conditions. Consider these alongside your projected growth as you weigh the ROI for different business schools and programs.

Beyond increased earning potential, what is the value of business master’s degrees?

What’s not present in the numbers, however, are the non-monetary gains achieved by business master’s students.

Personal growth

You can expect to realize an incredible amount of personal growth when undertaking a graduate business degree. In fact, 79% of prospective students say that their main reason for going to business school is to enrich their life and develop their potential.

Soft skills

A business degree doesn't just provide you with so-called 'hard' business skills such as accounting, marketing, or finance. You'll also learn how to communicate with people from across countries and cultures, develop your interpersonal skills, and learn how to present yourself.

Expanded network

Many business school graduates also cite the network as a huge aspect of a good ROI. According to Foster School of Business MBA grad Courtney Wenneborg, forging strong connections during your degree can have untold benefits throughout your career.

“Return on investment for me is knowing I can continuously open doors for myself and never get bored. The connections I made and the program itself meant there has been a huge diversity of experiences available to me,” she explains.

What does a business master’s degree get you?

Is a business master’s worth it? For many people, the answer is a definite yes. In the Graduate Management Admission Council’s latest Alumni Perspectives Survey, almost nine in 10 business school alumni reported a positive return on investment from business master's degrees.

If a strong ROI is at the top of your agenda, the best place to start is by assessing the affordability of your chosen business master's degree and how to cut down your student debt.

Think about your scholarship and finance options and come up with some ways to save money and plan a budget while you're studying.

During your degree, you should also work to maximize your return on investment by taking advantage of everything business school has to offer. Attend recruitment events to get your foot in the door in your target industries, join business school clubs to upskill and network with classmates with the same goals, and be proactive in group projects to get noticed by industry professionals.

ROI calculator

Once you've got all of this data together, you can start getting a rough idea of the ROI of your desired program. To help you out, we've created a handy ROI calculator that works out the ROI of a business master's degree.