The MBA edge: What's it worth?

When N.C. State University decided to start a master's of business administration program in 2002, school leaders reached a quick conclusion.

"There are only so many people willing to pay $60,000 for an MBA," said Steve Allen, an associate dean who oversees NCSU's program.

Then again, there is no shortage of students.

Demand for an MBA in the Triangle has steadily increased costs: A $60,000 degree is hardly outrageous, and $100,000 options are easy to find. Less-expensive options are available at NCSU, Meredith College, Campbell University and N.C. Central University.

Plenty of options also exist online and through private national programs. The result is a rich mix of choices.

"If you can't find a program that matches your interests, you aren't really looking," said Lester Thomas, a client service analyst at Fidelity Investments. He recently received an MBA from Strayer University.

That means in any month, hundreds of students are working on MBAs in the Triangle, thousands are peddling the credential and millions of dollars are changing hands among schools and students looking for that edge in the workplace.

One of the first lessons students learn is that the degree holds no magic.

"Getting an MBA doesn't mean you are guaranteed a promotion," said Penny Oslund, director of the Kenan-Flagler executive MBA programs at UNC-Chapel Hill. "You need to be clear about that."

And that, of course, raises some obvious questions: Why do people invest so much time and money in this degree? What's it worth?

Better credentials

These kinds of questions tend to neatly divide the world in two -- those committed to an MBA and those who aren't. Though it's tempting to pigeonhole MBA candidates as corporate-ladder climbers who never take their eyes off the bottom line, the stereotype doesn't always fit.

Kamira Jones will graduate from Kenan-Flagler in the fall. She moved to Raleigh in 2000 and took a job with AmeriCorps at poverty level wages because she liked its mission of community service. Her second job was with the United Way. She has piled up about $50,000 in MBA debt, hoping her new skills will be useful at another service-oriented organization.

Linda Sanders is a program director at IBM. She is also expected to graduate from Kenan-Flagler in the fall. Her skills are immediately applicable and her MBA debt is zero: The company is picking up the tab.

Despite their differences, Jones and Sanders give the same basic reason for pursuing an MBA. They say it makes them more than better employees: They believe it makes them better people.

"Continuing to grow and learn is a part of life," Sanders said. "It just makes sense."

That's not to say Jones and Sanders are ignorant of the promotions and pay increases that often follow MBA graduates.

A 2005 study by The Fuqua School of Business at Duke University found that 73 percent of its executive MBA graduates were promoted within five years of receiving their degrees. More than half reported annual average pay increases exceeding 10 percent.

Numbers like that are hard to ignore, no matter how many times someone says an MBA offers no guarantees.

But the MBA market is like many others. It can be fickle.

Sarah Hutchins will spend about $25,000 to get an MBA from Meredith College.

A degree from Meredith doesn't have the pedigree of one from Kenan-Flagler or Fuqua, but Hutchins has already earned a promotion to chief financial officer at The Banks Law Firm in Durham. She is scheduled to graduate in December. "My investment is already paying itself off," she said.