Which MBAs are best value for money?

Taking an MBA is expensive – tuition fees alone at top schools can come in over $100k. Then there’s the cost of living and the opportunity cost of not working. Is it worth the investment? If so, which schools offer best value for money?

Research firm QS believes that it has the answer. By analysing the costs associated with the programmes at European business schools and then weighing them against average salary increases post-MBA (assuming employment after three months of graduation) and bonus payments, it believes that it has calculated the average ‘return on investment’ for business schools in Europe.

The results are, perhaps, surprising. MBAs get their money back quickest at schools that don’t usually top the rankings. There’s no London Business School, INSEAD or St Gallen. Instead, Spanish school ESIC, the University of Bath School of Management and the University of Edinburgh Business School provide the fastest payback period. If you have aspirations to work in finance, you may wish to look elsewhere, however. Our own (global) rankings of MBAs, based on the proportion of graduates securing jobs in top investment banks, doesn't feature any of the universities in the top five of QS's list below.

This list may have more to do with the relative cheapness of these schools, rather than their career enhancing credentials. ESIC fees are $33k, and it costs 'just' £28k ($42k) to study at Bath and £27.1k ($40.7k) at Edinburgh. London Business School, meanwhile, costs over £67k ($100k) and INSEAD fees are €65.8k ($73.9k).

Longer term, the rankings favour the more elite institutions. INSEAD tops the 10-year ROI rankings, suggesting that the graduates earn $1.05m over the decade after graduation, while St Gallen, IMD, Edhec and Mannheim Business Schools make up the remainder of the top five.

What about City investment bankers' favourite institution - London Business School? As the chart above shows, LBS is on the list, but not in the top five. This might be because it's so expensive. It may also be because it's graduates aren't the highest earners. IE Business School produces graduates who earn the most, with an average of $4.7m over 20 years, followed by fellow Spanish school, IESE.

Value for money isn't everything, however. The 2015 FT rankings are out this morning and using the FT's own measure of 'value for money', they put the University of Cape Town top. Our own (global) ranking of MBAs, based on the proportion of graduates securing jobs in top investment banks, doesn't feature any of the universities in the top five of QS's shortest payback list.