Few measures of a business 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 Business Week 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 Notre Dame and Wharton get all the attention, it is the big state schools (and their lower tuition costs) that fare the best on this measure.
To determine ROI, Business Week 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 with $1.87 for the privates…
A glance at the ROI ranking might lead some to believe that the public schools are hands-down winners. But private schools, while faring poorly on the ROI measure due to higher costs, also have a lot to offer – features that might trump ROI for many prospective students as they shopping around for a program.
So how can a student justify paying up to quadruple the tuition to attend a private institution? For one thing, private school programs, many of which have rich endowments, often have more resources to spend on instruction, which translates into better student-teacher ratios and smaller classes.
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