An MBA can be a significant financial investment for many. The price tag for an MBA should be calculated by estimating the actual amount of money to be invested as well as opportunity costs.
Whether a student enters a full-time or a part-time program has financial ramifications.
If you get an MBA through a full-time program, you give up the income that could have been potentially made in a full-time job. However, full-time MBA students usually expect to obtain a substantially higher income upon graduation. Before deciding upon a full-time program, you could use a net present value analysis to compare the discounted cash flows of not going to school full-time vs. going to school full time. Of course, such an analysis is tricky, given that future income flows and the appropriate discount rate would be estimates.
If you earn an MBA through a part-time program, then you don't have to give up a full-time job. But there are other opportunity costs. One is the potential opportunity cost of earning a higher income faster by graduating sooner from a full-time program. Another potential opportunity cost is that of not being able to make as strong of connections with fellow students. In a full-time program, it is more likely that you'll be able to develop deeper relationships with your classmates. These relations could lead to future deal or career opportunities.
Many employers offer tuition reimbursement as a benefit. I personally benefited from my employer paying the majority of my tuition, book, lab, and registration costs. I was reimbursed 100% for every "A" grade, and 90% for every "B" grade (regardless of plusses or minuses). If I had gotten any "C" grades, I would have gotten 70% reimbursed. In the end, I paid less than $1,000 of the more than $40,000 in total costs, thanks to my employer's employee education program.
If you can get your employer to pay for your tuition, then this can skew a financial analysis to make a part-time program look much more desireable than a full-time program. However, some employers will allow an employee to go to school full-time, provided they sign a contract to come back or else face a financial penalty. Also, some employers require that students sign a contract stating that they will work for the company a certain number of years after graduating or else face a financial penalty. This could dissuade a recent graduate from jumping to a new, higher paying job if the penalties for doing so are stiff enough.
Some programs make the decision to go full-time or part-time easy by only offering one program or the other. For schools that only advertise part-time programs, you may want to check to see if there is a full-time option by loading up on classes geared towards part-timers. A sizeable minority of students at Santa Clara University take this option, loading up on night and weekend classes.
Of course, future income will be partially dependent upon the program from which you graduate. A graduate of Stanford will most likely garner more opportunities for higher income than a graduate of a relatively obscure school. Most MBA programs post data regarding the average salary for thier graduates. Of course, this information should only be used as a very rough guide, since your results may vary.
These are just some of the things to look for when considering the costs of an MBA. Of course there are many other financial factors, and there are many non-financial factors which can and should influence your decision-making process.
