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You can find a better version of my blog at http://www.adammarkus.com/blog/.

Be sure to read my Key Posts on the admissions process. Topics include essay analysis, resumes, recommendations, rankings, and more.

April 03, 2008

School Selection: Higher Ranked Program or A Huge Scholarship?

See here for my other posts on school selection.

A reader of this blog poses the following problem: He has been admitted to both Chicago GSB and Indiana University Kelley MBA programs. Kelley is offering him a very huge scholarship that completely pays for his two year MBA. Chicago GSB is offering no scholarship. He wants to know where to go. Should he sacrifice his scholarship for Chicago GSB, his dream school, and get a free ride at a Kelley?

What is interesting here is my reader clearly prefers Chicago GSB, so it is not all a question of his personal preference, but rather a hard economic choice.

One core consideration is the average starting salary post-MBA at Chicago ("Adam's 98" ranked 6th) is $155,938 and at Indiana it is $105,547 (55th). There is a $55,391 salary differential in overall average market value between the two degrees. Your scholarship is great, but unless there is no significant difference in your likely post-MBA salary, it seems to me that in the short to medium run, Chicago GSB will be the better financial investment.

Have you plugged your numbers into the Businessweek ROI calculator or something similar? Assuming you have, what was the result? I think looking at it as objectively as possible would really help you decide. Since you have a finance background, my advice is actually to apply what you know to your own situation. Since I don't know your background in any detail or your goals, there maybe other factors that would be worth considering.

Beyond the more immediate economics of this, you really do need to consider the potential value of a Chicago pedigree (You might not be a school snob, but the guy/gal hiring you might be), the network, and given your field, Chicago's reputation in finance. Don't get me wrong, Kelley is a good school, but it is not Chicago GSB. Unless I had additional facts, stating otherwise, I would go into debt, go to Chicago, and treat it like the lifetime investment it is. Since, it is your dream to go there, even without the financial considerations, I think it is highly likely you would regret not going. You asked, so that is my answer.
Best of luck and congratulations on your killer results.

UPDATE: My reader has informed me that he is going to Chicago.

Questions? Write comments or contact me directly at adammarkus@gmail.com. Please see my FAQ regarding the types of questions I will respond to. If you are planning to apply for an MBA, LL.M., Ph.D., or a Masters and would like to learn more about my consulting services, please visit http://adammarkus.com/. I offer a free initial consultation.

-Adam Markus
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