BC Business
2013 BCBusiness Guide to MBAs in B.C.
Twenty years ago, there was no question that an MBA was a golden ticket – a solid investment in one’s career and a surefire way to scale the corporate ladder. Today, thanks to year-over-year increases in program fees, those three little letters are more expensive than ever – leaving prospective students to wonder if the degree holds the same value, dollar for dollar, that it once did.
B.C. is home to nine MBA programs, the sticker prices of which range from $12,343 for a one-year, full-time program at Thompson Rivers University to $43,022 for a 16-month, full-time program at UBC. Applicants with a few years’ management experience can also opt for an executive MBA through SFU (part-time over 20 months) for $49,500 or UBC (part-time over 18 to 20 months, specializing in health care) for a whopping $66,300.
But in most cases, those figures are far from the total program cost. Factor in an application fee of $25 to $125; $1,500 to $2,500 for books and materials; and student fees ranging from about $1,500 to $3,000, which may cover such things as a transit pass and health and dental coverage. As well, depending on how far students live from campus, transportation and accommodation costs may apply.
Tuition of $49,500 for SFU’s EMBA program may seem steep, but that includes two Whistler retreats as well as meals and hotel accommodation during the initial 16 months, when students attend classes every other Friday and Saturday. The entire program is 20 months.
Meanwhile, Royal Roads University’s blended model program requires two three-week residencies on campus in Victoria, and students must budget an extra $35 to $60 per night for accommodation on campus, plus meals, in addition to the tuition of $38,000.
In the interest of adding an international perspective, several MBA programs offer – or require – a specialized field study. At SFU, EMBA students have the option of an international trip – this year to Vietnam and Korea – for an extra cost of $3,000, says Melissa McCrae, executive director of graduate programs at SFU’s Beedie School of Business. “For the full-time MBA students, the trip is mandatory. We give people three different cost options with a local trip, a short away trip and a full international trip [destination: Chile and Argentina], so the cost to students is an additional $750 up to about $3,000.”
McCrae also points out some of the by-product costs of signing up for an MBA program – particularly a part-time program during which students continue working. “They have to find this extra time in their schedule somehow, and sometimes students will want to hire a housekeeper [because] it’s one less thing for them to worry about. . . . Students also tend to eat out a lot more, so they should probably budget for more ‘convenience meals’ than they otherwise would.”
While EMBA students are expected to continue working full-time throughout the program, full-time MBA students are generally advised not to work at all; for them, the greatest expense is lost wages. The opportunity cost of 12 to 18 months’ income can make a part-time program at an expensive school far more affordable in the long run than a lower-cost full-time degree.
Part-time programs also offer the advantage of potential employer sponsorship. Donna March, MBA program manager at Royal Roads, says she sees about one-third of MBA students completing their degrees on the company dime, one-third receiving partial sponsorship (comprising tuition fees, paid leave, or both) and the remaining third footing the entire bill themselves. Over at SFU, McCrae also observes that many students receive help from their employers, with employer sponsorship typically covering about 55 per cent of EMBA tuition.
Students paying out of pocket for their MBA program generally turn first to their savings accounts and RRSPs. Thanks to the federal government’s Lifelong Learning Plan, students can borrow up to $20,000 (but no more than $10,000 in a given year) from their RRSPs tax-free, then have 10 years in which to repay the funds. Full-time students are also eligible for government student loans, which don’t accrue interest until after graduation, and almost all students, whether part-time or full-time, are eligible for school-negotiated loans – lines of credit with competitive interest rates.
Scholarships are another source of funding, and one not quite as scarce as students may expect. “We’re very generous with scholarships in the full-time program,” says Wendy Ma, assistant dean and director of professional graduate programs at UBC “About 25 per cent of all incoming full-time MBA students receive scholarships of anywhere from $10,000 to $40,000. We give out approximately $500,000 annually in scholarships and bursaries; most of these awards go to full-time students.” Students can expect similar generosity at SFU: entrance scholarships range from $5,000 to $10,000 for EMBA students, and between $2,500 and $10,000 for full-time MBA students – approximately one-third of whom receive a scholarship of some sort. But with program price tags nearing the $50,000 mark, even generous entrance scholarships can seem like a drop in the bucket. Putting aside the unquantifiable benefits of personal growth, the easiest way to calculate the potential career value of an MBA is to dig into each program’s student salary statistics. For example, SFU’s full-time MBA grads typically report a base salary increase of 30 to 40 per cent between starting and finishing the program, while at UBC, Ma observes that, on average, full-time MBA students generally double theirs. And at Royal Roads, graduates reported a 22 per cent bump, plus another five per cent one year out.
But there are a few caveats to bear in mind when evaluating these statistics: salary ranges vary widely by industry; EMBA students tend to start out at much higher salaries than younger full-time MBA students, and students receiving employer sponsorship often receive tuition costs in lieu of a raise. Moreover, says McCrae, salaries in Vancouver are typically lower than in larger cities, so students should take into account their willingness to relocate for a better salary after completing their degree.
Furthermore, “graduates will usually have two transitions,” says McCrae. “There’s obviously the salary increase that happens immediately following the degree, but that isn’t everything because usually the second move is more substantial. The MBA is great to help you get that next job or that next promotion, but the MBA value really comes when the student actually applies it – they make better business decisions, they get better results and as a result they get promoted.” •