MBA Part Two: How to decide which business schools to apply to

Welcome to Part Two of my mini-series on the MBA degree. The goal of Part Two is to help people who are applying to business school decide which schools they should apply to.

If you are still debating about whether or not to go business school, you should first read Part One - MBA: Useless? Worth it? How to decide if business school is for you.

Now on to the fun stuff.

Table of Contents

This essay is structured so that you can skip directly to the parts most relevant for you and forget the rest. You won’t hurt my feelings skipping around - I encourage you to be efficient!

1. Should you go part-time or full-time?
2. The objective b-school spreadsheet
3. Obvious considerations
4. Non-obvious considerations
5. Wrapping up

1. Should you go part-time or full-time?

If you need to check the box and getting into a top school isn’t a priority, go part-time online. It really doesn’t matter where - lowest cost that’s accredited is fine.

If your employer is paying for grad school and requires a certain school, curriculum, or prestige, go where they want you to go/need you to go.

If you’re any other profile, and assuming COVID life doesn’t last forever, go full-time.

2. The objective b-school spreadsheet

Most people make a decision based on the advice ‘go to the best school you can get into.’ 

As a general rule of thumb that’s fine... but the decision should be much more calculated with a number of obvious and non-obvious factors to consider. 

After you read through my methodology on how I chose the University of Arizona and are interested in trying it for yourself, here’s a link to the spreadsheet I used to make my decision.

The following reasons are not listed in order of importance. And you may weigh them differently depending on your current status in life.

3. Obvious considerations

Real costs
Tuition, fees, housing, moving your stuff to a new city, and international travel for the program all add up… FAST.

This doesn’t include social activities (prepare your liver for grad school), university fees, extra-curriculars, and all the other opportunities you’ll find to spend money.

I don’t include scholarships or financial aid in this calculus (discussed more below) because you don’t have much control over how much money the school gives you to attend. 

Cohort & alumni network
You’re going to spend two years with your classmates - you want to enjoy it. You want to be challenged. You want a good network. 

By looking at profiles of previous classes you’ll get a feel for the talent level, years of experience, and alumni network you’ll be surrounded by. These all make a big difference in how much you’ll gain from your time in b-school.

Some people forget that the school they attend is also much larger than the business program… so even a small graduate class (~100 students) at a D1 school (20,000+ students) opens up your network to a much, much bigger group of people. This means more opportunities to extend your personal and professional reach while in school, and also, after graduation. 

I rarely run into University of Arizona MBAs (my class was ~50 students), but I CONSTANTLY run into University of Arizona graduates - even when I lived in Brazil. 

Ranking
Ivy league MBAs aren’t going to lose their allure, but it’s important to understand how the rankings work. It’s basically a popularity contest where faculty, alumni, and students rank themselves and others on their perception of the school… not the actual outcomes for the students. 

A highly ranked school certainly comes with prestige, impressive colleagues, and award-winning faculty. But this doesn’t guarantee success, just like going to a “lesser” school doesn’t guarantee failure. 

Financial aid
The amount of financial aid you will receive is largely a factor of your GMAT score. Some schools have special programs with scholarships that are for particular student profiles or areas of study, but if you ace the GMAT you’re almost guaranteed funding for any school you apply to. 

HOWEVER - if your score is well above the rest of those in your cohort you will likely receive significant financial aid, even to the point of the program being ‘free’ (from a tuition + stipend point of view). 

As an example, I chose the University of Arizona (free w/scholarships & stipend) where my 690 GMAT was ~40 points above the average. Lesser ranked schools have major incentives to attract and admit individuals with high GMAT scores, as those scores boost program rankings, which lead to more students applying, which means more tuition for the school… rinse and repeat. 

At somewhere like Stanford my GMAT score would’ve been on the lower end of the class, which means I’d have had a very slim chance of obtaining financial aid. 

4. Non-obvious considerations

School specializations
If you know what industry or career you want after graduating then you should go to a school with a good program for that. Likewise, schools on the west coast who are close to the Bay Area are more likely to feed into tech companies upon graduation.. and East coast schools are more likely to feed into finance/banking/consulting companies. 

Ranking has no effect on the quality of a top-notch specialization for a particular field of business. Some schools have a heavy international focus (or special program for international business) that may heavily influence your decision. 

As an example, my school had a mediocre graduate MBA ranking (~50th for public universities) but the business school overall (all programs, including undergraduate) was in the Top 20, the entrepreneurship program ranked in the top 10, and the MIS program ranked in top 3. 

Quality of life
I rarely hear people talk about quality of life factors when considering where to go to b-school.

This is 18-24 months of your life… where do you want to live? Here are some factors that might be important to you:
 - Proximity to family
- Quality of the school districts and safety factor (if you have kids)
- Cost of home ownership
- Night life/city scene and quality of restaurants, bars, etc.
- Local politics or organizations you might want to be involved with

Opportunity costs
The cost of an MBA isn’t just tuition, fees, travel, etc… it’s the 18-24 months of forgone salary as well.

A lesser ranked school that provides scholarships may be more appealing than a higher ranked one for this exact reason. Let’s do some easy math:

We’ll assume you make $75k/yr. before entering graduate school. 

While in school, you’re missing out on $150k worth of salary (2 years of school @ 75k/yr salary = $150k).

Let’s also assume you have to pay $50k/yr all-in to attend the business school of your choice. That’s $100k in cost (2 years at $50k/yr.). 

The forgone salary (150k) plus the cost to attend (100k) is $250k in total cost you’re ‘spending’ to get an MBA. 

Now let’s assume you come out of your program making the average salary + bonus of a newly minted MBA, or ~$105k/yr. That’s a $30k yearly increase in your salary (105k new salary -75k old salary). 

For that extra $30k/yr. you ‘spent’ $250k. To pay back the cost of your graduate degree, not including interest on student loans, it’ll take you 8.3 years to recoup your investment (250k/30k). 

That’s EIGHT YEARS to get a financial ROI. People will argue and say ‘yeah well you’ll probably get raises and bonuses and will be able to pay it back much sooner.’ That’s fair, but I’d also argue that by NOT going to business school you could’ve spent two years finding a career you loved, gotten promoted, or found ways to get your MBA paid in full by an employer.

Ability to conduct “real-world” projects
Business school isn’t about textbook material. It’s about what you learn through group projects, consulting courses, internships, and research opportunities.

Some schools have specific courses on consulting where you work with a REAL company with REAL people on REAL projects - not memorizing supply and demand curves in economics classes that have no application to the way things actually work. 

Look for schools that offer programs like ‘experiential learning,’ ‘consulting projects,’ and ‘immersive coursework.’

5. Wrapping up

If you made it to the end of this essay I commend you. You’re taking your decision seriously and thinking critically about how to spend two years of your life.

If you decided not to go - make the best of your two years in the ‘real world.’

If you decided to go - make the best of your two years in graduate school.

Lastly, if this helped you in any way please share it. Even better if you’d send me a note to connect - I’d love to hear about your journey and if there’s anything you disagreed with or think I should add.

Big thanks to Charlie, Ayomide, Miriam, Cam, Juan David, Salman, and Dipan for reviewing early drafts of this piece.