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#AskJeremy (Applicant Question): MBA Admissions Decisions Involving Money

We’re bad at figuring out this dilemma. And MBA admissions offices know it. That’s why the scenario comes up every year. And that’s why it comes up at some of the same schools. What scenario you ask?  This one–You’re accepted to one top business school and you’re thrilled. It’s the place you’ve always dreamed of getting in for the last six months.  On the other hand, another school gives you nearly a full ride. And tomorrow you have to decide.

First things first. Congratulations! You are in a great position to have both options. And you are lucky to be able to choose from two “top” MBA programs, especially in this economy. One with great professors, smart classmates and great career opportunities. And another with a more famous brand … and a daunting $100K price tag. The million dollar question (or perhaps $100k question) is this.

Which should you take?

In a recent question from one of my readers I got that exact question. But it’s no new question. It’s actually the third time I got the question this week. And fifth time in two weeks.  But before I answer, let me take a second to explain why this is a harder question than you think.

$100,000 is a HUGE number, and in reality it doesn’t mean a whole lot to people just a few years out of undergrad.  We don’t know what it means to be in debt for a years paying it off. We don’t know where we’ll live or what we’ll be doing after school. And many of us don’t know if we’ll have families in the next few years. So while it’s not a number that we play with, it often isn’t one we truly comprehend.

Secondly, the idea of compromise involving something that is $100K or $150k is hard to understand. Compromising on $5k or $10k maybe. But not over $100K. It just doesn’t make very much sense and can impact our self esteem depending on what choice we make. That’s what makes it hard.

Without further discussion, below is the question and below that is my response.

–APPLICANT QUESTION

**  Note I took out all school names to provide a more fair, honest, and thorough response

Subject: (Top School) brand vs. Full scholarship at (Lower Ranked School)

Message Body:

Hi Jeremy,

I was recently accepted at (Top School) and I’m extremely excited about the possibility of joining the (Top School) family! (Top School) is my top choice but I’ve been offered full scholarships elsewhere (Lower Ranks Schools X, Y, Z). I’ve been offered a 50% tuition scholarship at (School)

I want to make sure that I thoroughly evaluate each opportunity before making a final decision. As an MLT fellow I am surrounded by brilliant fellows who have motivated me to achieve both personally and professionally. I would like a similar MBA experience and from my perspective most top 15 can provide that. I’m interested in pursuing a career in management consulting or health system management post MBA.  My long term goal is to pursue an entrepreneurial ambition.

I would like your opinion on how school selection could potentially impact my career trajectory and professional network. I understand that certain employers emphasize MBA brand over others. I also understand that being obligated to pay high student loans may stifle my ability to pursue entrepreneurial opportunities. Do you think it’s worth the extra money to attend a school like (Top School) vs. (School X or Y)?

Thanks for your time and advice!

(Name)

—-MY RESPONSE

Hey (NAME)

Thanks for reading my blog, and for reaching out with your question about the MBA application process.  It’s funny how this exact question comes up every single year. In fact, it came up a couple of different times over the past two weeks.

As you might imagine, this question comes up every single year. The combination of schools changes, though not dramatically but the question remains the same.  Here is what I think.

In short, all comes down to what you value most. And applicants tend to value different things. Some of them value ranking, others prestige, others location, others classmates, others potential job opportunities, and some don’t know what they value. My message as an MBA admissions advisor is usually aimed at the people in that last category, and I try to catch them far before they ever apply to business school so I can help them figure out what they value most. The message is that you have to know what you value early. Because schools will throw money at you, you’ll meet interesting classmates, get exposed to new opportunities, and you won’t have a sense of what you really wanted in the first place.

The problem is that most people don’t know what they value so they start to ask around and get answers. The problem is they ask too many people and the answers are not only diverse but also confusing. In many cases, they look like the following:

1. Most alum of (Top School) will tell you that there is a material difference. Especially if they made the same decision. So they’ll tell you to go to their school
2. Most alum of School X or Y would say otherwise, especially if they made the same decision. They’ll find reasons you should save the money and go with their school
3. Asking someone online (like me) I should theoretically tell you to choose My School which is Kellogg or the school closest in culture to mine
4. Many very senior leaders will likely tell you to choose School because they might value the brand of the school. Especially if they recruit at that program.
5. Mathematicians would probably do the math compounded over 30 years and prove that the money is not actually a large factor, depending on the industry.
6. People who have worked their butts of to succeed will tell you it doesn’t matter, because hard work is what makes the difference, not school name.
7. People who have worked really hard but not seen the fruits of their labor will tell you to pick the higher ranked school because that is what will make the difference.
8. CEOs will tell you that a degree can really help but they’ve met low performers from all schools.
9. Highly successful people from certain disadvantaged communities will tell you pick the best school and dont consider a program that is not highly ranked.
10. And people who feel they weren’t given fair chances in their career will tell you to 100% choose the higher ranked School.
11. If Steve Jobs were alive, he’d probably tell you that you don’t need an MBA.
12. And in terms of Kellogg, one VERY highly esteemed professor always tells people from certain communities that you should 100% take the (Top School) because the network and opportunity is so much better.
13. In many cases, I’d probably give similar advice, though that would very depend on the person, on what they told me before my advice.

Like I said, all the answers will confuse you.

In general, my gut is that a good number of people in your shoes choose (Top School) because of what I said in my intro. The stakes feel high, and you don’t want to compromise on such an important decision.  But not every one chooses this. Lots don’t actually. And while some may regret it, others are happy with their choice.

In the end, it’s something only you can decide, based on past experiences, needs, concerns, hopes, thoughts about fit, career aspirations, and value of prestige. Things you should evaluate far before having the decision, so you are prepared to decide once you have to.

But if you haven’t thought about it enough before the decisions, one piece of advice, be careful asking too many people, because you might just get a broad array of responses like the ones above. Stick to the people that know you best and are looking out for your best interest.

For another perspective, check out this interesting thread on BTG about one person’s choice between Kellogg and Ross. http://www.beatthegmat.com/mbawatch/ross-school-of-business-university-of-michigan/comment/1332511185-957-11.  Both sides of the argument make sense. Ross offers a bit more money. Kellogg offers the applicant something more closely aligned with their career goals. And both offer a great opportunity at success.

Good luck.

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