I was pleased to see that two of KGI’s sister schools in the Claremont College consortium were recently listed among the 11 best values in liberal arts colleges, according to Kiplinger’s Personal Finance magazine. That got me thinking about how prospective students determine the value of an education at the graduate level and what they do to calculate it.
It is likely that prospective students have an intuitive sense of what value they are looking for, but also that they do not have a standard metric that can equitably compare program options. Indeed, candidates I talk to frequently talk about “cost” as a basis for a decision when they could be talking about “value”. Let’s break these down a bit and look at how they relate to each other.
Going to grad school is an investment in the future. It is no longer the sole pursuit of intellectual curiosity that drives one to advanced study, but a practical matter of career choice and interest. Whether considering research in academia, professional management, consulting, venture capital, operations, regulatory compliance, or something entirely different, it is career interest that drives nearly all grad school planning. Let me acknowledge that some people take passive approaches to career planning as it relates to grad school and for them this post may be uncomfortable as the foundation is that career plans come before grad school plans.
Investment in grad school takes is easily measured in time, direct costs, and opportunity costs. Each is important and can be weighted differently according to a candidate’s individual circumstances.
Time to complete a graduate degree
Time is a major factor when deciding between doctoral or professional degrees, indeed it can be the most significant factor in any grad school ROI assessment. This underlies the other two and is the biggest contributor to the return on investment calculation discussed below. While PhD, MD, and JD degrees take 4-7 years to complete, the typical full time PSM or MBA program is only two. Those extra years drive additional cost and deferred income and are substantial.
This is the first half of a post addressing ROI. The second half addresses the direct costs of attending grad school, opportunity costs of grad school options, and return on investment (ROI) for grad school.