Schools That Deliver The Highest ROI For Business Majors

Georgetown University's McDonough School of Business

Georgetown University’s McDonough School of Business


That’s not the only flaw in the methodology. For one, it doesn’t track the percentage of business majors at particular schools who moved on to advanced degrees, resulting in an apples-to-applesauce comparison. Not to mention, it doesn’t break various business degrees into their concentrations (i.e. accounting, marketing, etc.), to provide a clearer guide to where the highest earnings are derived.

To calculate median pay over 20 years for business majors, PayScale looked at 2015 graduate pay by school and major, “summing up the median pay for bachelor’s graduates who graduate between 1996 and 2015 from that school.” In doing so, PayScale translated earnings — past, present, and future — into current dollars and factored in wage inflation. “We are effectively assuming the (wage inflation-adjusted) earnings 20 years from now for a 2015 graduate is the same as the current earnings of a 1996 graduate.” However, PayScale is careful to add a caveat: “If the character of a school’s graduates has changed substantially in the last 20 years, this measure may be inaccurate.”

For ROI, PayScale weighs earnings versus costs. It starts with 20-year earnings, featuring total cash compensation (i.e. salary or hourly pay, profit sharing, commissions, and other forms of cash earnings), but excluding variables like stocks, retirement benefits, or healthcare. To better measure the true return, earnings are then run against four-year campus costs (tuition, room and board, books, and fees) and average loan amounts over four years. PayScale users also have the option to factor in grant aid (local, state, federal, and institutional) into their ROI, with aid data being furnished through the Integrated Postsecondary Education Data System.


Last year, Georgetown University’s McDonough School of Business lacked the requisite number of student profiles to be ranked in ROI by PayScale. McDonough certainly made up for lost time in 2016, finishing third to Haas. Without financial aid, Georgetown business majors collected $979,000 after four-year costs and debt were included. With aid, the 20-year ROI jumped to $1,120,000 — a major achievement for McDonough’s outgoing dean, David Thomas. So why do Berkeley business grads earn more than McDonough ones? Hard to say, though school cost explains some of the difference. Four years at the private Georgetown is nearly twice the cost of going to the public Berkeley (to the tune of $245,000 versus $133,000 for in-state residents). However, students receiving financial aid fare far better. True, just 42% of Georgetown business grads received aid, compared to 53% at Haas; however, McDonough grads reaped far better packages than Berkeley, $141,000 to $60,000 (in-state) and $70,000 (out-of-state), respectively, on average.

Outside the Wharton School at the University of Pennsylvania - Ethan Baron photo

Outside the Wharton School at the University of Pennsylvania – Ethan Baron photo

A Wharton business degree also ranks among the best investments for students. Within 20 years of graduation, business majors get a $951,000 return (in spite of its $243,000 price tag). Like Georgetown, Wharton students enjoy a beefy financial aid package, which averages $149,000 and covers half of the students. At the same time, at 96% Wharton ties with Notre Dame for the highest graduation rate among business majors.

Rounding out the top five for 20-year ROI are Santa Clara University and the University of Virginia’s McIntire School of Commerce (in-state). Each posted an $873,000 return without financial aid (with Santa Clara grads making $947,000 with financial aid included — $1,000 more than McIntire’s in-state business majors). Notably, 71% of Santa Clara grads receive aid, more than double that of McIntire (33%). At the same time, Santa Clara, a private school, is more than double the cost of Darden for in-state residents ($235,000 versus $102,000). That means Santa Clara business majors earn more after graduation, but are also saddled with higher costs up front.


Looking for a surprise? How about this: Higher school rankings don’t always produce higher long-term returns. At Villanova University, ranked by U.S. News as the top undergraduate business program in 2016, business majors ranked 52nd in ROI at $593,000 without financial aid included ($696,000 with aid, moving it up to 29th). You’ll find a similar dynamic at Boston College (3rd in U.S. News and 18th with PayScale sans aid), Indiana University (fourth in U.S. News and 49th with PayScale), and the University of Texas (sixth in U.S. News and 29th with PayScale). As noted earlier, this might be explained by a higher percentage of these students eventually entering graduate school. “For some liberal arts, Ivy League, and highly selective schools,” PayScale is careful to note, “graduates with degrees higher than a bachelor’s degree can represent a significant fraction of all graduates.”

Aside from calculating returns, PayScale supplies several other intriguing data points. One is average loan amount over four years. According to Student Loan Hero, a Class of 2016 graduate holds $37,172 in student loan debt. As you’d expect, the lower-ranked programs report the lowest debt. However, you will find some bargains near the upper echelon. Among private schools, for example, Boston College business majors leave school with just $18,000 in debt, with Brigham Young University trailing close behind at $20,200. As a rule, you’ll find debt among PayScale’s top 20 business programs for ROI running from $25,000 (UCLA in-state) to $36,300 (New York University).

Among graduates still carrying debt as a whole, 39% report a monthly payment of $100 or less. Another 25% paid $101 to $250, with 24% forking over $251 to 500. Just 12% had payments of $500 or more per month.

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