Business School Salary Statistics: What MBAs Earn – NerdWallet

Business School Salary Statistics: What MBAs Earn - NerdWallet nevin manimala

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Business school salary statistics can help you decide if getting an MBA is worth the money, especially if you leave the workforce to study full-time or you need to take out MBA student loans for your education.

Business school salary statistics by degree

The median starting salary for new MBA hires is $105,000, according to a 2018 survey from the Graduate Management Admission Council. That’s $10,000 more than the median salary for any other business school master’s degree — and $40,000 more than having an undergraduate business degree alone:

» MORE: How to pay for an MBA

Average MBA signing bonus

Many MBAs stand to earn more than just a salary: GMAC found that 56% of U.S. companies offer MBA new hires a signing bonus, with the median amount being $10,500. The pay package may also include guaranteed year-end bonuses, as well as performance bonuses based on an MBA’s job, employer and, of course, accomplishments at work.

56% of U.S. companies offer MBA new hires a signing bonus, with the median amount being $10,500.

Previous work experience and MBA specialization can also play a role in an MBA’s overall compensation. For example, those who specialize in strategy typically fare the best. The average starting salary for consultants with MBAs is $150,000 with an average signing bonus of $25,000, according to data from Management Consulted, which trains business consultants.

MBA salary by school

The business school you attend may have the biggest effect on your post-graduate salary and signing bonus. U.S. News & World Report found that MBAs from schools atop its rankings made the most money, with an average compensation of $166,999.

Here are the highest combined MBA salaries and bonuses by business school:

Business schools at the bottom of the U.S. News rankings — or not ranked at all — had an average compensation of $53,464, or less than one-third of how much students at top-tier schools received.

MBA salaries and student loans

A good rule of thumb is to avoid borrowing more than roughly 10% of your projected after-tax monthly income. At that percentage, you should be able to keep MBA student loan repayment manageable based on business school salary statistics and signing bonus information.

For example, an MBA who makes $105,000 could take home roughly $6,100 each month, not including potential bonuses. That salary would mean taking on no more than $61,000 in student loans — which isn’t far from the $66,300 average MBA student debt, according to the National Center for Education Statistics.

Having a strong income could also qualify you for a low MBA student loan refinance rate.

If your compensation exceeds that amount, or you feel comfortable with your current payment, consider doing the following to save on loan costs:

  • Prepaying your loans. Paying more than the minimum on your loans could help you lower interest costs. Putting some or all of your bonus money directly toward your debt could speed up repayment even more.
  • Refinancing at a lower interest rate. Having a strong income could help you qualify for a low MBA student loan refinance rate. Use a student loan refinance calculator to estimate your potential savings.

» MORE: How she closed the book on MBA debt in 3 ½ years

If your salary doesn’t or won’t support your debt, see if you’ll qualify for MBA loan forgiveness; otherwise, enrolling in an income-driven repayment plan is the best option for affordable federal student loan payments. MBAs who opt for private loans should discuss repayment options with their lender if they’re struggling to afford payments.

Leave a Reply

Your email address will not be published. Required fields are marked *