Good/Bad MBA

November 23, 2010 6:30 AM

My company will no longer pay for the majority of my MBA, does it still make sense to go?

Last year I decided to apply to grad school in order to get an MBA.

My company was going to pay about 75% of it and it made perfect sense as I am extremely interested in the subject matter and really enjoy the classes I have taken so far.

I started the first semester of classes at Baruch (a local MBA program) but after talking to my boss he encouraged me to apply to NYU's part time program which is ranked (by most polls) as the best one in the country. I got into the program and will start next semester, I am extremely excited about the possibilities of going to NYU and the doors it will open however the situation at my job now got complicated.

My company went through a re-organization period where some people were fired while others got shuffled around. I belong to the latter group and while many of my responsibilities remain the same I now report to a new manager who does not know me and so far does not seem to be as open minded about activities outside of work. Just last week he balked at re-approving a work-from-home authorization that I have had for the last three years. As it stands now I estimate that he'll approve 50% of my courses (the ones that correlate exactly to my job).

Each course at NYU costs about $5,000 dollars.....and I am not sure whether I can handle (or would want) coming out with so much debt. I could always go finish up my degree at Baruch, but after being there for a semester I am sure that I will not have the networking/advancement opportunities that NYU provides.

In addition to this, if I were to stay at Baruch it will take almost twice as long to finish up the degree, but I will be able to afford it without getting into no debt whatsoever.

Does it make sense to get into so much debt for a top-ranked but still part-time degree?

I should also mention that I graduated from NYU's undergraduate philosophy program and I can testify that the name brand has already helped immensely while going out for jobs and getting interviews.

posted by The1andonly to work & money (20 answers total)

50% of an NYU MBA is still a pretty good deal. Can you estimate the total amount of debt you'll come out with? It might not be an unreasonable amount.

Also, can you go over new boss' head for help with reimbursement for the MBA? Is old boss still around to help?
posted by ThePinkSuperhero at 6:37 AM on November 23, 2010

The old boss is still around and he is being extremely helpful, so it may be a good idea to leverage some of the influence he still has.

I estimate that if my company pays 50% of the amount I would come out with a $50 to $60,000 dollars debt.

Also during the second year NYU will probably provide me with some financial aid and that number could be cut in half.
posted by The1andonly at 6:46 AM on November 23, 2010

You don't tell us which industry you work in, nor your prospects, which would help. If getting an NYU MBA opens doors towards realistic six-figure opportunities you would not have had otherwise, then the debt would be worth it. On the other hand, if you're getting an MBA for ethereal handwavy advances in a company that's in reorganization mode, that's a different story.

However, the NYU MBA is one of the few that hasn't been grossly devalued in the last few years and, as you well know, the networking and connections opportunities it provides are real.

Are you still paying off your undergrad debt, by the way? If you're already six figures in (as many recent NYU grads are finding themselves), I'd say stay away from accruing more until you get some real promises.
posted by griphus at 6:47 AM on November 23, 2010

God no don't pay for it out of your own pocket. You already have a job. Do another semester at Baruch and if the company offers to pay for NYU (like at 75% or whatever percentage that covers the difference that you would have ended up paying at a state school cheaply), then do it.
posted by anniecat at 6:54 AM on November 23, 2010

I am currently a business analyst/project manager working in insurance, prior to working here I worked at the back office of an investment bank. I would like to use the MBA to become a project manager in the middle office of a hedge fund or an investment bank. Basically I would like to stop working in technology related projects and would like to move to the business side.

In the past year, several job opportunities in the three figure ranged have been at my doorstep but I have not been able to capitalize due to my lack of knowledge of the financial markets, derivatives and so on.

As for my undergrad debt? I owe about $15k.
posted by The1andonly at 6:54 AM on November 23, 2010

...I have not been able to capitalize due to my lack of knowledge of the financial markets, derivatives and so on.

If it's the knowledge that's the issue, go to Baruch and bust your ass to pick up more knowledge on your own. Finance caters rather well to autodidacts, from my observations.
posted by griphus at 6:58 AM on November 23, 2010

MBAs from top ten schools are usually worth the money if you have an intention of getting a job in a high-money position afterwards. $60,000 debt is not a big deal if you're coming out earning $120k or $150k or more to start.
posted by shivohum at 7:19 AM on November 23, 2010

Run the business analysis. Is 120K a reasonable expectation in your industry for salary? If you made 120k what would your monthly budget look like?
posted by DarlingBri at 7:46 AM on November 23, 2010

In most cases, no. People on Wall Street have, of late, tended to laugh at the ones who went for the MBA instead of just continuing to work and earn bonuses.

My opinion is that if you don't understand specific areas, just train up in those areas. There are much cheaper ways to do it.
posted by Citrus at 8:23 AM on November 23, 2010

Aren't educational benefits usually a corporate type of policy? I'd think corporate HR decides how much education they'll pay for, not a local manager. Picking and choosing which required classes they'll cover in an MBA program makes absolutely no sense. Picking and choosing which electives they'll cover might be defensible.

You might want to talk to somebody in HR.

FWIW, I also have an MBA from a top 10 part-time program. It took me 13 quarters to get it done. IIRC, the company paid 90% for an A and 80% for a B - but any class in the MBA program was covered.
posted by COD at 8:27 AM on November 23, 2010

In principle, an MBA from NYU can be very valuable. In practice, you have to determine whether the MBA will give you a clear and specific career opportunity, like a vice-president-level position. I think this is an issue you might want to discuss with the Stern School's career office.

If it's just the knowledge that's the issue, a couple classes at Baruch might cover it. Heck, even the 50% tuition reimbursement from your company might cover the classes you need at NYU, and then you can use that knowledge to get a better job. I'd be cautious about getting into that much debt without a specific set of opportunities waiting for you: talk to the career office at NYU and go to some NYU/Stern School career fairs and evaluate how much interest there is in you as an MBA holder and what kind of jobs you'd be recruited for.
posted by deanc at 8:56 AM on November 23, 2010

People on Wall Street have, of late, tended to laugh at the ones who went for the MBA instead of just continuing to work and earn bonuses.

Have things changed? Back in the 90s/early 00s, it was pretty much expected that you joined an IBank as an analyst, got promoted to associated, left to get an MBA, and then returned as a vice president. Did they just realize that the MBA was a waste of time?
posted by deanc at 8:58 AM on November 23, 2010

Going part time and capitalizing on the classes that the firm will cover should be a step up. Do it!
posted by stoneweaver at 9:36 AM on November 23, 2010

@deanc: Yeah, basically.

https://www.nytimes.com/2007/09/16/business/16mba.html

Like other young people on the fast track, Mr. Hammond has run the numbers and figures that an M.B.A. is a waste of money and time — time that could be spent making money. “There’s no way that I would consider it,” he says.

posted by Citrus at 10:17 AM on November 23, 2010

Sorry, in response to several other comments along the lines of my initial "run the numbers" post, I did want to add this:

I am extremely interested in the subject matter and really enjoy the classes I have taken so far.

Don't undervalue that in your analysis.
posted by DarlingBri at 10:22 AM on November 23, 2010

Citrus,

The link also says:

“Going to business school is a way for people to try to open the door, to try to get into a company or hedge fund. But if you’re already there, it doesn’t make sense to go.”

Mr. Hammond of Alerian noticed the same trend while he was an analyst at Goldman Sachs. His co-workers who went to business school either wanted to change careers, or they were not doing well in their current jobs, he says.

I belong to the two groups in question.
posted by The1andonly at 10:24 AM on November 23, 2010

OP, the problem with going to B-school then, is that it essentially tags you as having not done well enough in your last job, and created the presumption that you used B-school as an escape route. It's not exactly fair, but an MBA might actually *hinder* you from finding work in the investment field nowadays.
posted by Citrus at 10:30 AM on November 23, 2010

s/created/creates. Grammar fail. :-/
posted by Citrus at 10:31 AM on November 23, 2010

It sounds like doing well in your current job is simply not a path that can take you where you want to go. I also doubt that being self-taught in your field of interest or getting a no-name MBA will open many of the doors you're interested in.

Overall it sounds like what you have to weigh up is whether finding $30k towards funding an MBA that you will enjoy and which has at least some chance of getting you into the field you want is a wise decision.

It also sounds like you have a job where finding that $30k should be within your capability.

My reading of all this is that you know clearly what the options, the risks and the rewards are here, but what's stopping you is that you want a no-risk option.

That's not something we can help you with, but maybe it's worth observing that if your aim is a career on the business side of investment banking or hedge funds, being comfortable with making calls with risk attached is probably a pretty important personal attribute to have.
posted by philipy at 11:50 AM on November 23, 2010

First of all, I know a few friends pursuing MBAs, but all my personal experience with weighing the pros and cons of professional school relates solely to law school. So, big grain of salt there.

You mention that if you do Baruch it'll take you twice as long but leave you with no debt. I assume that means something like six years instead of three. The question is, so what? Consider the opportunity cost. How much of that debt that you accrue at NYU will you be able to pay down in those three extra years in the workforce with the degree that presumably will open new, more lucrative doors? In other words, how will your circumstances differ six years out? If you go Baruch, you'll have an MBA and no debt; if you go NYU, you'll have a better MBA, plus whatever debt you weren't able to pay down over the previous three years, plus whatever you believe the differential in earning power will be over the course of your career.

Of course, one of these figures you know for sure (the debt you'll be incurring) and one is speculative (how much more you'll make with an NYU degree). So ultimately it comes down to your personal risk aversion, which nobody but you can define.

I also question the assertion that the MBA will make it look like you're a loser or whatever. I'd say getting a part-time MBA from the best school where you could possibly get it, while maintaining your employment, says positive things about you both academically and as an employee, neither of which would be conveyed by a degree from Baruch or even by a full-time NYU MBA.

It sounds to me like you want a reason to do NYU. I think you should do it and consider the employer-funding for the tuition icing on the cake. Would you have been interested in business school if it wasn't so heavily subsidized for you?

FWIW, which may be very little, if this WAS about law school, my answer clearly would be take the debt at NYU, but I have a sense that things work very differently with MBAs.
posted by dixiecupdrinking at 12:54 PM on November 23, 2010