Is an MBA worth it?
<div class="user-question">Hi Frich! I’ve been feeling like I’m in a professional rut the last few years, which is why I’m seriously considering quitting my current job to go to business school. I’ve heard that this is the surest way to level up my earning potential. The problem is that I’m scared of taking on more debt. Is it ever a good idea to take out loans again once you’ve already been working? How do you weigh the long-term benefits vs short-term financial strain? And with everything that’s going on in the job market right now, is that even a good idea?</div>
Dear Ambitious but Anxious,
You’ve been grinding away for years, and despite the paycheck and the upgraded LinkedIn title, something’s missing. Whether it’s stagnation, burnout, or a desire to do something bigger, the allure of business school is real. An MBA promises a reset, a network, a reinvention. But it also comes with a massive price tag… and if you already have debt, the idea of borrowing more feels like stepping off a financial cliff.
So, is it ever a good idea to take on more debt after you’ve started your career?
The answer isn’t simple. But with the right tools and a clear framework, you can make a decision that’s bold - but not reckless.
1️⃣: Start with the numbers: know your debt threshold
The average cost of a two-year MBA from a top-tier school (including living expenses and lost income) can exceed $200,000. But not all debt is created equal. Ask yourself:
- How much can I borrow without feeling buried? What’s my monthly payment on debt right now?
- What’s my tolerance for risk and delayed gratification?
- What interest rates are available to me based on my credit and current savings?
<div class="frich-tip">Frich tip: Check out these options to compare private student loan options and see pre-qualified rates. Some platforms allow group-negotiated lower interest rates for graduate programs.</div>
You should also explore federal vs. private loan trade-offs:
- Federal loans (like Grad PLUS or Direct Unsubsidized) come with fixed interest, income-based repayment plans, and the option for forgiveness (via programs like PSLF or IDR plans).
- Private loans may offer lower rates (if you have great credit), but fewer protections and less flexibility.
<div class="frich-tip">Frich tip: Don’t just look at the interest rate. Look at the total repayment amount over time. Use a calculator like Student Loan Hero to simulate different scenarios, especially if you're planning to take time off work. One of the things I like to focus on personally is what my total debt load will be relative to what it is currently. I follow banking rules which means you’ll never catch my total monthly debt payments to be more than 48% of my total monthly income.</div>
2️⃣: Think in terms of financial return and lifestyle trade-offs
While the salary uplift from an MBA is real (average post-MBA salary is around $150K+ in top industries like consulting or finance), there are less tangible gains to consider too:
- Career pivots into leadership roles or industries otherwise hard to break into.
- Access to a powerful alumni network that can open doors well into the future.
- A “forced sabbatical” that lets you explore, reset, and rethink your long-term vision.
But also, debt isn’t just a number - it impacts your psychology:
- Will you delay homeownership or family planning?
- Will you feel pressured to chase high-paying jobs instead of passion-driven roles?
- Will monthly loan payments create anxiety down the line?
<div class="frich-tip">Frich tip: Use Monarch Money or Tiller to build dynamic financial scenarios. They let you model "what-if" paths with projected debt payments, savings, and job transitions. It’s a great way to visualize life after graduation.</div>
3️⃣: Explore creative ways to manage or reduce the debt load
An MBA doesn’t have to mean soul-crushing debt. Here are some strategies to reduce the burden:
Employer Sponsorship
Some companies will pay part or all of your MBA in exchange for a post-graduation commitment. Think: Deloitte, McKinsey, Amazon. Even if you don’t return to them, some firms offer pre- or post-exit education stipends.
Scholarships & Fellowships
These are not just for undergrads. Schools offer merit-based scholarships - especially if your background adds diversity to the cohort or aligns with certain programs (tech, nonprofit, etc). Look into external sources too, like:
- The Forté Foundation (for women in business)
- Consortium for Graduate Study in Management (for underrepresented minorities)
- GI Bill (if you're a veteran)
<div class="frich-tip">Frich tip: Use tools like Bold.org and Scholarship Owl to find grad-level scholarships.</div>
Part-Time or Executive Programs
If you can’t stomach leaving your job and income, consider:
- Part-time MBAs, which let you keep earning while you study.
- Online MBAs, which often cost less and offer flexibility.
- Executive MBAs, designed for more experienced professionals and often sponsored by employers.
Pay-as-you-go
You might not need to borrow the full amount. Use savings, bonuses, side income, or even short-term family support to pay a portion upfront, reducing how much you owe later.
4️⃣: Market matters - but it’s not everything
Yes, the job market is volatile. Layoffs in tech, shifts in hiring, and the rise of AI have changed the playing field. But MBAs are still being placed in top jobs, especially if you’re:
- Adaptable
- Willing to relocate
- Focused on high-demand fields (like product management, analytics, or sustainability)
Remember: economic uncertainty isn’t always a reason not to act. In fact, some of the best MBAs went to school during recessions and came out better positioned than if they’d stayed put.
5️⃣: Final thought: use debt as a lever, not a life sentence
Taking out loans isn’t inherently a bad move - it’s a strategic lever. The key is being intentional:
- Borrow within your comfort zone.
- Have a plan for repayment before you enroll.
- Understand your earning potential - and how much you’re willing to sacrifice to get there.
You’ve already built experience, resilience, and self-awareness. Business school won’t be your first step - it’ll be a next-level one. And if it’s part of a bigger vision, the short-term debt can be a stepping stone, not an obstacle.
Found this valuable? Here are some more deep dives from the Frich team 🤝
✅ 7 Tiny Money Moves That Feel Really, Really Good
✅ How do I regain control of my debt?
I hope this helps. Good luck!
Saira Rahman
VP, New Investor Initiatives - Fundrise
