Why is MBA so costly?

Before I explain to you why MBAs are so expensive, let’s understand why non-MBA degrees are so cheap. Most non-MBA programs are funded by the government as their main purpose is to produce skilled graduates that will contribute to the growth of the country. This is exactly why doctoral programs are very inexpensive. 

MBA graduates, on the other hand, work for corporate giants. Thus they are not funded by the government and are extremely costly. Recently, the subsidies for engineering programs at IITs have started decreasing and fees of IITs too are increasing.

However, the high MBA fees aren’t a constraint for thousands of students preparing for MBA entrance exams because the fees invested are recovered within 5 years approximately. The ROI is what attracts MBA aspirants.

MBA being a popular course among students is always in demand. Multinational companies prefer MBA graduates than MA or MSc graduates. Students from all educational backgrounds, Science, Commerce and Humanities can apply for an MBA degree. They can also apply for an Executive MBA and can continue studying while working.

Admission to the program is based on the various entrance examinations like CAT, CMAT, SNAP, XAT, MAT and NMAT.

The table given below gives a brief overview of the program:

Return On Investment (ROI) - 

• MBA being one of the costliest courses is considered having the best Return On Investment (ROI). 
• ROI measures and compares the efficiency of an investment. 
• The MBA course fee is higher than any other course but so is the salary package offered to MBA graduates. 
• They also have a chance to get a raise or hike in 10 years considering the long term salary projections. 
• Students opting for an Executive MBA are working actively while pursuing the degree, so the salary earned shall also be considered when calculating ROI.
• The highest salary package offered to MBA graduates can rise from 48 LPA to 70 LPA in India.

The top recruiting companies include Deloitte, Accenture, Infosys, Capgemini, Citibank, ITC, Nestle, Saint Gobain, JP Morgan, Wipro, Microsoft, Phillips, Reliance, L&T, McKinsey & Company, Avendus, Asian Paints, etc.

Studying MBA works as an investment, students graduating with an MBA degree often work at top companies who provide a generous salary package. MBA degree provides job security and it offers an immense number of career opportunities than a normal Masters graduate degree. This is why MBA is considered as one of the most costliest and competitive courses in India.