Return on Investment: Public Business Schools Rock

Undergraduate business programs at public schools, with their low tuition costs, top BusinessWeek's exclusive analysis of ROI

By Lindsey Gerdes

• View Slide Show

Few measures of a b-school's performance hit home quite like return on investment, or ROI. In an era when salary freezes and layoffs are the order of the day, a school that can deliver the goods—decent-paying jobs for the vast majority of graduates—is golden. If it can do so without charging an arm and a leg, well, so much the better.

That's why BusinessWeek undertook an extensive analysis of ROI for the 50 top schools in its 2009 Best Undergraduate Business Schools ranking. The results were enlightening: While the top-ranked private schools such as No. 2 Notre Dame and No. 3 Wharton get all the attention, it's the big state schools (and their lower tuition costs) that fare the best on this measure.

To determine ROI, BusinessWeek gathered information from all 50 schools about their annual tuition and required fees as well as the median starting salaries for 2008 graduates, then divided the salary figure by the annual costs to calculate "salary per tuition dollar"—or bang for the buck. Overall, public universities did far better than elite private schools, averaging $5.98 in pay for every tuition dollar spent, compared to $1.87 for the privates.

TOP PRIVATE SCHOOLS

The best of the best was Brigham Young University's Marriott School of Management, a private school where business grads earned more than $12 for every annual tuition dollar spent—in no small part thanks to the cut-rate $4,110 annual tuition paid by students who are members of the Church of Jesus Christ of Latter-day Saints, which make up about 95% of BYU's undergraduate business enrollment. The remaining 5% who are not Mormons pay double the tuition.

Brent Wilson, director of the undergraduate business management programs at BYU, says Marriott students, in part because of their Mormon background, have an extra level of maturity at graduation that recruiters are willing to pay for. He added that BYU's ROI—like that of any school that places a large number of grads in the financial services industry—may take a hit this year, if students have a tough time finding high-paying jobs as a result of the industry's implosion. "The majority of our students would [typically] go someplace in finance or corporate finance or financial services," Wilson says. "I don't know whether that's going to be the case this year."

Cornell University came in a very distant second among the privates, with business grads earning $2.70 for every annual tuition dollar spent. Cornell is an anomaly in that the university is private but the business program is in a state-assisted portion of the school, which brings down the tuition to $20,364, which is somewhat more manageable when compared to annual costs well north of $35,000 for many private programs.

PUBLIC SCHOOL STANDOUTS

Among the public schools, none did more for students salary-wise than the University of North Carolina's Kenan-Flagler Business School, where students earned nearly $10 per tuition dollar. That was followed by SUNY Binghamton ($8.52) and James Madison University ($7.18). Kenan-Flagler, where starting salaries were a middle-of-the-pack $53,500, topped the list of publics in large part because of its low cost—$5,397 a year. Lawrence Murray, director of UNC's undergraduate business program, says recruiters are willing to visit the school, and to pay top-dollar for grads, because of the school's excellent academics. "I think our students are competitive with anyone," Murray says. "We do our best to tie academics and career services together."