Here's how to decide
whether pursuing an MBA the right move for you.
You're ambitious, smart, and ready to move up the
ladder. Trouble is, with a wavering economy and a lousy job market, the
next rung may be out of reach. Times like these are exactly when many
people in the business world head for B-school. Indeed, applications are
up 30% or more over the past two years. You have until April to apply
for programs starting in the fall. So if you want to apply, you have to
decide now: Is it the right time to get an MBA?
There's no easy, one-size-fits-all answer. You have
to honestly assess your reasons for wanting an MBA, weigh the changing
job market for B-school grads, and figure out if you can financially
manage two years in school and out of the workforce. In general, if
you've notched several years of solid experience in a field and could
use an extra edge to take you to the next level, you might be at the
point in your career when it makes sense to commit to an MBA program. If
your r�sum� is ho-hum or you can't afford not to work, you might be
better served by polishing your skills in the job market first.
NO RICHES IN SIGHT. First, keep in mind that
an MBA isn't the quick ticket to a six-figure salary that it used to be.
"An MBA will not jump-start an otherwise moribund career," says
Rosemaria Martinelli, admissions director at the University of
Pennsylvania's Wharton School. So if making oodles of money is the top
reason for attending B-school, you might be disappointed. Feeling
trapped in your current job is not a good reason to apply either, adds
Nor do dismal job prospects mean you should jump at
the MBA. "I don't want to go back to school just because it's a bad
economy," says Marcella Maurer, 28, a former marketing manager at a
startup. Maurer, laid off and looking for work for the past three
months, has found that many jobs she applies for require an MBA. Still,
she's holding off, at least until she has a clear idea of how-and
when-the degree will help her the most. That doesn't mean you should
skip B-school altogether. Rather, you should wait until you are certain
your reasons for attending are solid.
One way to help determine that: Ask yourself if you
have enough real-world seasoning to contribute to the fast-paced,
in-depth classroom discussions. If you don't, wait a year-or even
longer-to apply. At most B-schools, you'll need at least some
experience, usually a minimum of two years, to get accepted. But if
you've spent those two years in a low-level job, with little opportunity
to hone your business acumen, you might want to delay applying until
you've fattened your skills portfolio and can make an earnest
contribution in class.
WHEN TO GO FOR IT. Let's say you are ready for
B-school. Make sure the degree fits into your long-term career goals,
not just your five-year plan. If you've got enough job experience and
you aren't overloaded with debt, now might actually be the best time to
hunker down and apply. Maybe you've already taken the Graduate
Management Admission Test, a prerequisite for admittance. If not, you'll
need to take it within a few weeks of sending in your applications. If
you don't think you'll have time to do your applications justice or prep
for the GMAT, hold off until next year. Sloppy applications usually make
their way to the reject pile-quickly.
Perhaps you are a strong candidate, likely to be
admitted to a top-notch school but still undecided on whether to apply.
In that case, go for it. You're not leaving much behind-raises are small
and promotions scarce. "The opportunity cost is so much lower in this
type of economy," says Sharon Hoffman, MBA program director at Stanford
University's Graduate School of Business.
The cost of financing that degree is attractive, too.
Interest rates on education loans are at historic lows. Same goes for
home-equity lines, which a growing number of MBAs use to pay for school.
Both give an edge to attending now, and not later; you'll face a shorter
payoff time and smaller payments after graduation.
Even so, two years at a top B-school will run $60,000
or more in tuition alone, plus books and living expenses, not to mention
forgone wages. All told, the price tag could be $150,000. "The big
obstacle is going without a salary for two years," says Adam Cohen, an
investment banker who has put off B-school. Nor is he crazy about
amassing $100,000 in loans-about the maximum you can borrow-even though
he believes an MBA would further his career.
If you're planning to finance your degree with loans,
you'll first need to clean up your personal balance sheet. It's best to
pay down credit cards and consumer and auto loans before you take on
B-school debt. Waiting another year could help you rid yourself of debt
and save a little extra.
The MBA may not be the dollar magnet it used to be,
but it's still a valuable degree. "The education has become even more
relevant as we've been increasingly beset by troubles in the business
world," says Wharton's Martinelli. Indeed, when the economy improves,
corporations will likely pay up for premium people.