Forbes has released its biennial ranking of top business schools as measured by return on investment graduates achieve after five years, with London Business School (LBS), Stanford Graduate School of Business and INSEAD topping the lists.
To compile the survey, alumni from top business schools were asked to share their pre-MBA salaries and compensation for three of the first five years of work after obtaining their degrees. Taking into account opportunity costs (tuition and salary lost while in school), adjusting for cost-of-living expenses and discounting earnings gains, Forbes ranked programs based on overall ROI divided into three distinct tables: U.S. programs, non-U.S. one-year programs and non-U.S. two-year programs.
LBS, which ranked number two among non-U.S. two-year programs in the 2007 rankings, sidled back up into the number one spot this year, which it also held in 2005. “I am delighted that we have re-claimed the number one position in this ranking,” said Sabine Vinck, LBS associate dean of degree programs, in a statement. “This result demonstrates that London Business School offers excellent return on investment and that our alumni compensation levels post-graduation are among the highest in the world,” Vinck added.
Stanford, too, reclaimed the number one spot this year on the U.S. programs list, having also slipped to second in the 2007 rankings. According to the Forbes report, Stanford graduates from the class of 2004 – now five years out from graduation – had a median salary of $82,000 before entering school, made a $235,000 investment on average on an MBA, and report a median salary of $225,000 five years out, which shows a typical cumulative gain of $85,000.
Overall, Forbes found that graduates of the five top-ranked MBA programs in its survey typically make more than $200,000 once they’re five years out of school but that rising tuitions and higher pre-MBA salaries mean it’s taking longer for them to get a solid payback on their investment.
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