In the previous post about the clown’s wife who has a state school MBA, there was a discussion in the comments about the value of an MBA. This is a topic I don’t think I’ve written about before, even though it seems like something I should have written about before.
Unlike a law degree, which is looked upon with suspicion if you don’t actually use it to practice law (and the same probably applies to other weird degrees, such as a PhD in Philosophy), the MBA is always viewed as a plus factor in the business world. A plus factor means that no one will hire you because you have the credential, but it’s looked at favorably when you are compared to candidates who don’t have it, especially if you are looking to get promoted to management. But keep in mind that it’s a small plus factor and not a huge plus factor.
The exception is if you earn an MBA from a very prestigious business school such as Wharton, Harvard, Stanford, or Columbia. People will hire you because you have such an MBA, and you can get hired into a prestigious and high paying investment banking, hedge fund, or management consulting career track.
If you can get accepted into a top MBA program, such as the four schools mentioned above, you should definitely borrow all the money it takes to pay for the education. On the other hand, it’s not worth borrowing a huge amount of money and taking off two years from work in order to get an MBA from a run-of-the mill school.
You never see me complaining much about my MBA because I didn’t give up much in order to get it. It was an evening program at Arizona State University, so I didn’t have to give up my job in order to obtain it. The work was really easy, so I didn’t have to study too hard. The tuition was inexpensive state school tuition and not expensive private school tuition. (One should note that evening MBA programs are very common, while evening law school programs are pretty rare. This is because law school is way too difficult to do simultaneously with working full time, unless it's stretched out over a long time. NYU has an evening LL.M. in Taxation program that stretches out over three years. In comparison, my evening MBA program at ASU was only two years, the same length of time as the day program.)
As a plus factor in non-prestigious career tracks, no one cares very much if the MBA was an evening program or a day program. So my advice is that if you can’t get into a prestigious program, do the least expensive evening MBA program that you can find. The exception, perhaps, is if you live in New York City, and you have the option of doing the evening program at the Stern School of Business at NYU. Maybe this is prestigious enough to justify NYU’s very expensive tuition? I have to think about that. The day program at Stern will be more likely to get you hired into a prestigious career track, but Stern is a big step down in prestige from Columbia, so I also have to think about whether Stern is worth it if you get rejected from Columbia. (Of course, if your parents are willing to pay for your education, you should take whatever education they're willing to fund. Parents seldom give their twenty-something children the choice between an education and a $100,000 check, so between fully funded education and nothing, fully funded education is a great deal.)
Zillions of people in the business world have an MBA, and because anyone can get one, it doesn’t necessarily prove that the holder knows anything. I said before that it’s a plus factor, but if I were interviewing someone for a job, and they had an MBA on their resume, I’d ask them some basic questions that someone with an MBA ought to know, such as “explain net present value” or “explain depreciation.” A former manager of mine, who had an MBA, didn’t know what depreciation was. This is very pathetic in my opinion. She ought to have her degree taken away from her.