How To Calculate ROI On Your Master's Degree
Getting a master’s degree can open up the doors to new career pathways and expand your social circle of like-minded individuals.
You might be tempted to say ‘Let’s go for it!’ but the high price tag of over $100,000 for the entire programme may make you think twice about the ROI of a Master’s Degree.
Is A Master’s Degree Worth It?
While a six-figure financial investment may be daunting, the returns you get - higher salaries and career advancements - make it worth it.
Let’s explain it with some numbers: with an MBA, you could potentially double your current salary!
But don’t forget, if you decide to leave your current job for a Master’s degree, you’re giving up the current salary you are drawing. For an accurate estimate of the ROI, you’ll need to factor in the opportunity cost of doing a master’s degree to figure out if its all worth it.
If you are already fluent in English or hoping to improve, you may be eyeing top programmes in anglophone countries such as Canada and the United Kingdom.
Read on as we give you the rundown of course fees in popular countries and guide you through the costs of pursuing a master’s degree.
Is It Worth Getting A Master’s Degree?
As with all ROI calculations, we are looking at a value that’s high and positive. Here’s a breakdown of the costs and benefits of a master’s degree.
- Course Fees
- Current Annual Salary (yes, opportunity cost counts too!)
- Living Costs such as food and accommodation
- Higher annual increment
- Higher expected salary with a Master’s degree
Calculating the tangible ROI of a Master’s Degree is simple: The long term benefits minus the costs.
If you earn more over time studying a Master’s Degree rather than continue working in your current job, the ROI is worth it.
However, that is only a partial picture, there are also value-added intangible benefits to doing your Master’s Degree overseas.
Doing your Master's degree abroad is an excellent opportunity to explore a new locale and soak up your new surroundings. Studying abroad could be just what you need to reignite your passion for what you do.
With that said, the quality, reputation and relevance of the Master's programme should still be your crucial consideration - after all, that's what you are going abroad for.
Here’s a rough cost estimate of how much an MBA (a master’s degree in business administration) will cost in some of the most popular English speaking countries.
#1: United Kingdom
Home to numerous eminent institutions, the UK should rank among your top choices for an MBA. Depending on your needs, you could find programmes spanning 15 to 21 months.
The average MBA costs £20,000 a year, but expect to pay up to £100,000 for programmes at top universities such as Oxford.
As for living expenses, you can get by with about £21,800 a year, excluding rent.
#2: New Zealand
New Zealand is another option for top-quality MBAs at a lower cost than colleges in the United States. What’s more, all eight universities are featured on the QS Rankings, so you needn’t fear that you are getting shortchanged.
For an MBA programme, you can expect a total cost of around $45,000 and living expenses of about $24,000 a year.
If you are looking for a culturally diverse destination for further studies, look no further than Down Under!
The average program will set you back around $50,000, but the cost differs significantly between institutions. Set your sights on the prestigious University of Melbourne? You will need $85,470.
As for living expenses, you can expect to budget around $30,000 a year.
Canadian universities give you the choice of short one-year programmes and longer 2-year programmes.
HEC Montreal offers the most affordable programme that costs $34,000. On the other hand, an MBA at the Rotman School of Management at the University of Toronto will cost you $120,680.
Want to live in Canada’s beautiful cities? You’ll need around $13,000 for a year’s worth of living expenses.
Calculating The ROI Of A Master’s Degree
There are several online calculators to find out the ROI of a master's degree. Here are our top picks:
These calculators will help you determine if your choice of pursuing a master’s degree might be a financially viable decision.
Here’s a hypothetical scenario to guide you through ROI calculation using the Prodigy Finance calculator:
You were a consultant earning $80,000 a year. After a 2-year MBA at the University of Toronto (which costs $120,680), you now earn $170,000 a year, with a 3% yearly increment.
Over 20 years, your ROI of a master’s degree is almost $2,000,000!
The ROI Of A Master’s Degree Is Clear
Now that the ROI of a Master’s Degree has been proven, it’s time to take the right steps forward towards your career aspirations.
Not all Master’s Degrees are made equal, and selecting the right one is key to unlocking the door to your goals.
Keen to kick-start your own overseas adventure? Swing by our upcoming Study Abroad Education Fair – the biggest of its kind in town! Happening 7 & 8 March, Suntec Convention Centre, Level 3, Summit 1. Doors open from 12pm to 6pm.
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