Forbes MBA Rankings: ROI Rules

Forbes published yesterday its biennial MBA rankings, based entirely on ROI five years after graduation. The top full-time programs on this basis:

The Top Ten

1. Dartmouth
2. Pennsylvania
3. Chicago
4. Columbia
5. Yale
6. Stanford
7. Harvard
8. Virginia
9. Cornell
10. Northwestern

(If you are going to use this data at all, please also read Forbes' ranking methodology.)

Forbes' data show that part-time programs and non-US programs clearly have a ROI edge on American full-time programs because they reduce the students' opportunity cost. The part-timers have no opportunity cost and most overseas MBA programs are only one year, which halves overseas students' opportunity cost.

B-schools have struggled over the last three years with sharply lower application volume. Jennifer Merritt in her April article "MBA Applicants are MIA" notes:

"Perhaps the toughest issue is soaring tuition. At top-tier schools, tuition is up nearly 55% over the past six years, to an average of $33,774 for each of the two school years. And students bear far more than the cost of the degree. With an average of five years' work experience, the typical 27-year-old student gives up an average pre-MBA salary of about $67,000."

She also reports  the increased popularity of part-time programs and growing competitiveness of European programs. 

Declining application volume could be a simple case of "follow the money."