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America's Best Business Schools 2015

This article is more than 8 years old.

Disappointing. Horrible. Terrible. The worst. A raw deal. This is a sampling of comments from more than 4,000 survey responses from the MBA class of 2010 describing their job prospects upon graduation. The Great Recession decimated many of the typical employment tracks for business school grads, with banks in particular cutting back after the collapse of Lehman Brothers and Bear Stearns. At some schools, less than 50% of graduates accepted jobs within three months of matriculation. It was a far cry from the late 1990s, when a degree at a top 50 b-school almost guaranteed a solid job with a healthy paycheck.

Despite the slow start to their post-MBA careers, the class of 2010 has rebounded well. Total compensation is up 9.3% annually on average for the 2010 graduates of the top 25 U.S. business schools. These are heady gains considering U.S. per capita income is up only 1.4% annually over the same period, according to Moody’s Analytics.

Graduates earned back their investment (tuition and two years of lost salary) in four years on average at the top 25 schools. The payback has slowed from 3.7 years for the class of 2008—also snake-bitten by the recession—and 2.7 a decade prior.

An MBA is a massive investment and can top $300,000 in tuition and foregone salary at an elite school like Harvard or Stanford. With that in mind, Forbes has ranked the top MBA programs based on their return on investment biennially since 1999. Stanford Graduate School of Business ranks first for a second straight time with a five-year gain of $89,100 for graduates. That’s down 11% compared to Stanford’s class of 2008, but still enough to hold off Harvard, which ranks second.

Our ninth ranking of business schools is based on the return on investment achieved by the class of 2010. We reached out 17,400 alumni at 95 schools around the globe. We compared graduates’ earnings in their first five years out of business school to their opportunity cost (two years of forgone compensation, tuition and required fees) to arrive at a five-year MBA gain, which determines the final rank. Schools whose alumni had response rates below 15% or a negative return on investment after five years were eliminated (click here for a detailed methodology).

Gaining entry into Stanford GSB is daunting, with the lowest acceptance rate in the world at 7% for the class of 2016. Applications are down since 2008 at many elite business schools, but they are up 12% at Stanford. Students enter Stanford’s MBA program with the highest incoming salaries ($86,000 for the class of 2010), but the prestigious degree pays off big-time if you can get admitted. The class of 2010 tripled their pre-MBA total compensation to $255,000 five years out of school. The median comp is up from $221,000 two years for the five-year out grads. Stanford grads made 5½ times the average U.S. per capita income last year of $46,129.

Salaries for Stanford grads skyrocket because they often have the pick of the litter when it comes to jobs. Top hiring firms last year included Bain & Co ., Boston Consulting Group , Google and McKinsey & Company . These companies all rank in the top six of Universum’s annual study of the leading places MBA students say they want to work.

Stanford grads also benefit from the school’s location in the heart of Silicon Valley, which has hummed along while the rest of the U.S. economy has been choppy. There are more than 7,500 Stanford GSB grads in the Bay Area including heavyweights like the CEOs of Bechtel , eBay , OpenTable and  Seagate Technology . Compensation, particularly at fledgling tech companies, often includes a piece of the company. Thirty-seven percent of Stanford 2010 grads that responded to our survey reported receiving stock options with a median value of $250,000. Total compensation, excluding options, increased 16% annually on average since graduation for Stanford’s class of 2010. It was the top growth rate for U.S. schools.

Harvard Business School moved up one spot this year with a five-year MBA gain of $83,500. HBS is the only school that challenges Stanford regarding total compensation five years out of school. Harvard’s class of 2010 banked $239,000 on average last year thanks to the richly compensated career paths of consulting and finance, on which 65% of the class of 2010 embarked. Grads moved up the ladder with annual pay raises of 13%, second behind only Stanford among the top 50 schools.

Harvard grads also benefit from having by far the biggest endowment of any business school at $3.2 billion. The fund supplements need-based fellowships, which 51% of the class of 2010 received. The average award of $49,246 ranks among the highest of the top schools and severely reduced the opportunity cost of going to school for these students. The school awarded $59,358 on average to 48% of the class of 2016. (Our ranking adjusts for scholarships and grant aid.)

Northwestern’s Kellogg School of Management jumped two places to No. 3 with a median gain of $72,700. Kellogg grads from the class of 2010 earned $188,000 on average, up 7% from the class of 2008. It is the lowest total among the top seven schools, but Kellogg students had the lowest salaries of the group entering school at $72,000. The input matters when figuring return on investment. Kellogg’s salaries might be lower, but it is also a function of geography and we adjust our five-year MBA gain figures for the cost of living based on where salaries are earned. Thirty-one percent of Kellogg’s 2010 grads took jobs in the Midwest, where a dollar stretches a lot longer than in California and the Northeast.

The average five-year gain at the top 25 schools was $61,700, down from $68,000 two years ago and $118,000 in 2003. An MBA is still a good proposition at an elite school, but the increasing cost is making it harder to justify the hefty investment in a post-financial crisis world. Students are leaving school with more and more debt. The average debt load for students reporting debt to Forbes from the class of 2010 was $80,000 compared to $65,000 two years earlier. “The debt has been crushing,” lamented one Wharton 2010 grad, echoing the sentiments of many b-school grads.

Thousands of banking jobs with sky-high salaries no longer exist to ease graduates debt load. Goldman Sachs was one of the top three hiring firms for eight schools for the class of 2000. None of the schools we surveyed this year listed Goldman as one of the top five graduate destinations for the class of 2014.

The employment market has been flooded with MBAs in recent years. The number of degrees issued more than doubled in the U.S. over the past 20 years to 109,368 during the 2013-14 school year, according to preliminary statistics from the U.S. Department of Education. Our rankings examine only a small portion of the schools issuing MBAs each year and many students outside the top schools find it difficult to make a degree payoff financially. Some students are reconsidering the huge financial investment of business school. The number of MBAs conferred has declined for two straight years for the first time in at least two decades.

Full List: America's Top 25 MBA Programs

Complete Coverage: The Best Business Schools

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