Wondering whether a part-time MBA degree offers the same—or better—return on investment than a full-time degree? Well, you're not alone. Applicants to part-time programs frequently raise this issue, as they did recently on the Bloomberg Businessweek Business Schools Forum. But they rarely get any answers. It can be months or even years before part-timers see a return on their investment in the form of a raise, a promotion, or a new job, and B-schools for the most part don't survey them postgraduation to check on their career progress.
In the past decade, as more part-time MBA students have been paying their own way, as opposed to getting sponsorship from their companies, return on investment has become even more important. Simply broadening one's mind and picking up new skills—without the ability to change careers or increase one's salary—was all well and good back when students were largely financed by others and knew exactly where they'd be working for at least a few years out of school, says Peter Giulioni, assistant dean and director of MBA Career Services at the University of Southern California's Marshall School of Business (Marshall Part-Time MBA Profile). Nowadays part-time MBA students need more career help, which the Marshall School and other business schools have recently begun providing.
In the 2010-11 academic year, a third of Marshall's 300 part-time MBA students interviewed with recruiters through the career services office, and about 40 of them eventually changed jobs as a result. The numbers will continue to rise, says Giulioni, who adds that the part-time MBA offers good return on investment even if it remains somewhat harder to quantify than that of full-time programs.
"At 30 years old, you have 35-plus years of work ahead of you," says Giulioni. "The part-time MBA can help you decide how you want to spend those 35 years."
That's just what many part-time MBA graduates have done: used their degrees to find the career path that's right for them. Of those contacted by Bloomberg Businessweek, some have more money than before, others not so much. None regret having made a sizable investment in business education, and all say their degrees have resulted in significant advantages—giving all three the tools they needed to advance in their careers, and ultimately the confidence to strike out on their own.
Brad Kuhn was a reporter for the Orlando Sentinel, covering the savings and loan crisis, when he decided to get an MBA. "I had to learn the rules of the game, so I'd be intelligent enough to ask the right questions," he says. "At first I went for an MBA to do my job better."
From 1992 to 1994 he attended the part-time MBA program at the Rollins College Crummer Graduate School of Business (Crummer Part-Time MBA Profile) in Winter Park, Fla. He paid $28,000 in tuition and his employer paid $2,000, says Kuhn. Because the sum was the same as the employer would pay for any ad hoc course a reporter would take to improve his writing, Kuhn was not bound to stay at the company. Still, the business school would not allow him to use career services because the employer was sharing the burden of his tuition, a common practice at the time.
No matter. Kuhn stayed at the newspaper. Eventually he applied for the job of long-range planning manager; although he did not get hired, he was placed on the team to create a future vision for the paper. Then he was promoted to retail distribution manager.
"I went from being a reporter to being in charge of a $14 million budget, 10 direct reports, 156 contract workers, a warehouse, and 6,000 outlets," says Kuhn, who also went from making $40,000 per year as a reporter to nearly $60,000 with a 20 percent performance bonus and the eligibility for stock options.
After seven years, the decline of newspapers wore out Kuhn, who resigned and moved into the communications field as a senior strategist. Then he took a job at a real estate investment trust, which had him writing speeches for executives, among other things. When he was laid off from that job in 2009, he again turned to his MBA, he says. "I keep falling back on my MBA," says Kuhn. "This MBA that I got to be better at the job I had was rescuing me for the third time." He recently launched his own communications business in Orlando and says he is making more money than he's ever made.
Supplementing One's Skills
Much like Kuhn, Keri Waters was satisfied with her job in software development when she signed onto the part-time MBA program at UC-Berkeley's Haas School of Business (Haas Part-Time MBA Profile). A May 2009 graduate, Waters, who was between the births of her first and second child at the time, wanted to supplement her engineering degree with a business degree because she had been bitten by the product management bug at work.
"As I was becoming more senior, I needed more finance skills," Waters says.
The company she was with at the time paid a portion of her tuition, and during the two years she spent earning her MBA she received a 50 percent salary boost. After taking some time off when her second child was born and receiving word that the company she worked for was closing, Waters began working on a software startup with two partners. Chopwood Inc., in Santa Cruz, Calif., plans to launch its first product this summer, says Waters. Although starting a company is not fruitful in the early days, Waters says she is happy to have her MBA degree.
"The biggest returns have been intangible—confidence building, access to a network, and the opening of doors, even for getting credit at the bank," she says.
Building a Network
Leveraging a bigger network appealed to Chris Garosi, who graduated from the part-time MBA program at the University of Maryland's Smith School of Business (Smith Part-Time MBA Profile) in 2009. In fact, his advice to all MBA students is to keep in touch with everyone. Although a network was important to him, the biggest motivator for returning to school was beefing up his résumé, says Garosi.
"I studied information systems as an undergrad, and I was working in the finance department but did not have an education for the finance profession," he says.
Not long after deciding on business school, Garosi's company was sold and he was out of a job. With severance paying the bills, he began applying to B-school, opting for part-time programs that would allow him to continue gaining work experience and spend time with his wife.
"School is fun and school will teach you theoretical applications of what you want to do," says Garosi. "But I felt like I'd be missing something without work experience. How would I explain to an employer why I had two years missing from my résumé?"
Garosi and his wife paid his entire tuition themselves. During the two and a half years he was in school, Garosi found another job as an analyst for a software development company and was subsequently promoted to senior finance manager on its corporate development team, resulting in a 10 percent raise. In December 2010, with no room left to grow in the company, he moved on.
With the career services office located on the main campus, about an hour away from where most part-time classes take place, Garosi admits he and his classmates rarely, if ever, took advantage of job resources. And he says part-time students have a longer wait for their ROI than full-time students.
"The payback for a part-time MBA is not 18 months," says Garosi. "We pay the same as full-time students, and we have far fewer resources."
Like many of today's part-time MBA students, Garosi started his own consulting business, Upper 90 Strategies, which was always a goal of his. Now he works three days a week, so he can serve as Mr. Mom to his 1-year-old daughter the other two days and his wife can work four days per week for the government.
"For me," he says, "a lot of the ROI was the freedom and confidence to do what I want."