How old is too old for an MBA? Depends what you want.
This post was written by our friends at chicagotribune.com
Richard Grad was 55 years old and a senior partner at law firm Sidley Austin in Los Angeles when he enrolled in the executive MBA program at Northwestern University’s Kellogg School of Management. Every other week, he flew his Cessna Citation to Midway Airport to attend classes Friday through Sunday, then flew home to be back at work Monday morning.
“It was grueling,” said the appropriately named Grad, now 60. He was among a handful of 50-somethings in a largely under-40 cohort. “Many classmates said, ‘Why are you here?’” he said.
Indeed, he had reached a high level in his career and was sitting on a number of boards when he began classes in 2012. “My reasons for going were so idiosyncratic and specific to me,” he said. “I really wanted to add greater value as a fiduciary on my boards.”
Since graduating, he’s gotten more than he expected in return for his $170,000 investment. “Those two years propelled me and catalyzed me to be open to change,” he said. Degree in hand, he left Sidley after 29 years for an opportunity to be global chief litigation counsel at GE Aviation in Cincinnati. “I completely decamped from LA and changed my life,” he said. “For me, the ROI is huge.”
A personal choice
While candidates in their fifth decade and beyond shouldn’t expect the degree to boost their upward mobility and pay in the way it can for younger peers, the MBA tugs on them as a far more personal endeavor.
If you’re not already on the executive track by your mid- to late-career, an MBA alone will not make it happen, say recruiters who specialize in executive and board placements.
“A late-career MBA decision is more often a personal choice than for other reasons,” said Tierney Remick, the Chicago-based vice chairman of board and CEO services for executive search firm Korn Ferry International. “An MBA can always be a good decision to round out complex problem-solving skills, strategic leadership acumen or bring some different skills around economics or operations that weren’t part of their undergraduate degree. But experience, performance and strategic capabilities will be the differentiators for most senior executives,” she added. “A late-career MBA alone is not going to be the pivot point.”
Research by the Graduate Management Admission Council buttresses that point. For its 2017 Alumni Perspectives Survey, it asked 14,651 alumni — including 1,003 who enrolled in an MBA at age 40 and up — to rate the value of their degree across criteria including personal, professional and financial.
“The vast majority of MBA alumni find the education personally rewarding,” said Gregg Schoenfeld, GMAC’s director of research. That figure is 93 percent overall and 95 percent for over 40s. Financial reward for the 40-plus alumni was lower than overall, but still, “two out of three say the programs were financially rewarding.”
“If I’m 40 years old and I go back to business school, I have 27 years before I can retire with full benefits,” Schoenfeld noted. “With people working longer, there are more opportunities later in life for job changes, career changes and opportunities to move up by getting education later in life.”
In 2016, more than 83,000 U.S. citizens took the GMAT exam to get into a graduate business or management program, according to GMAC, which administers the exam. Of those test-takers, just 3.5 percent were ages 40 and above. Candidates in their 50s are an even smaller group, and neither GMAC nor most universities slice data at that level, said Schoenfeld. (Not all prospective students take the GMAT; some schools will also accept GRE exams and some, especially executive MBA programs, don’t require standardized test scores to apply.)
At the University of Chicago, the 2017 incoming class of executive MBA candidates is 37 years old on average, with 13 years of experience. For the past five years, an average 31 percent of the incoming class of executive MBA students have been age 40 or older. By contrast, its 2018 full-time MBA students are an average age of 28. In the part-time and evening MBA programs, students age 40 and over have held steady at between 1 and 2 percent of the total incoming class of students for the past three years, according to a spokeswoman.
Students who enroll in the classic full-time, two-year MBA programs tend to be about 28 years old at top universities. Yet one-fifth of students ages 40 and older sent their GMAT test scores to full-time, two-year programs, according to GMAC’s 2017 exam data. These older students considering full-time programs said they wanted to bone up on skill gaps, get off of a plateau or insure against job instability, according to the GMAC MBA.com Prospective Students Survey for 2017.
“For many people who go back to school later in life, it really is about learning and filing in holes,” said Robert Rubin, professor of management at DePaul University in Chicago. He has studied how MBA programs are ranked and rated and has argued for more consistent comparison standards. “For a lot of older MBAs, I know it’s a bucket list item for them.”
DePaul’s MBA runs about $73,000, he said, and it doesn’t offer an executive version. Instead, the university created a corporate education program providing custom MBAs for companies including Walgreens, MB Financial Bank and Bosch. About 11 percent of DePaul’s MBA students across its programs are 40 years or older.
Does it pay off?
How programs factor return on investment varies. One is a ratio of salary after graduation to debt or dollars in salary earned per annual tuition dollar spent. GMAC calculates ROI by the salary bump after your degree and how long it theoretically takes to pay off the degree with the additional income. With younger candidates counting on a good four decades of earning power ahead of them, it’s easier to see the payoff.
Still, some MBA programs draw plenty of older students.
For example, at Massachusetts Institute of Technology’s Sloan School of Management, its 2018 executive MBA average class age is 40 with an average of 17 years of work experience; 46 percent of the cohort is age 40 or older. Admission criteria include a minimum of 10 years of post-undergraduate work experience and a range of other factors, and its website includes photos that reflect those older executives.
Universities by law can’t target students by age, but they do vet students for years of experience, said Johanna Hising DiFabio, director of executive degree programs at Sloan. “We’ve had 40 years old and 17 years of experience as our average for the last eight years, including the incoming class of 2019.” She added that the executive MBA program measures how many of its leads are coming in at above 12 years of experience, and it aims for 70 percent or more of those leads to fit that.
She said older students indeed can enhance their careers from their MBA, noting that 55 percent of executive MBA students get promoted while they’re in the program. She didn’t have information about pay bumps. As for enrolling for more personal reasons, “I think the recruiters are right. It’s not about the promotion or the money,” she said. “They’ve been doing the general management executive jobs based on gut instinct and past experience. Now they want the formal knowledge and scientific management expertise to verify that what they’ve done is correct and to learn new tools.”
Another program that draws many older students is the global executive MBA at Duke University’s Fuqua School of Business. Over the past few years, 42 percent of students were ages 40 and up when they applied.
Among the admission requirements for the global MBA program at Fuqua are a minimum of 10 years experience after undergraduate work with a strong leadership or management component and current or pending global work responsibilities.
“In terms of ROI, I have no doubt I’ll get my money back,” said Janet Burpee, 53, who is one term away from graduating from Fuqua’s Global executive MBA program. She said her class ranges in age from 30 to 58. She and her husband run a small medical device company called Burpee MedSystems in Eatontown, N.J., and she’s paying for her estimated $156,000 tuition herself.
“Learning how to be a more savvy investor, whether investing in my own company, the stock market or real estate, and going from, say, a 7 percent to a 10 percent return, you don’t have to have that many percentage points higher to make it worth it over the long haul,” she said.
Similarly, at New York University’s Stern School of Business, the average age of a candidate for the executive MBA Program is 38. While the minimum work experience is six years, students have an average 14 years’ experience. In current classes, 26 percent of students were 40 and above, according to a spokeswoman.
On Stern’s website for the executive MBA program, mature executives are featured in photography. “While we are not targeting a specific age group, we’re looking for students that can engage in dialogue across the classroom that is at a high level,” said Paula Steisel Goldfarb, associate dean of MBA admissions, financial aid and academic affairs at Stern. “What you’re seeing is reflective of that average age.”
Dr. Robert Spillane, 57, just completed Stern’s 22-month EMBA program, receiving his diploma Aug. 5. A radiologist, he decided to enroll when he landed his current post as medical director of quality at Hartford Hospital in Hartford, Conn., with oversight of 7,000 physicians and staff. His prior job was chief quality officer of a private practice with 400 physicians and staff.
“What I liked about Stern was the senior level of executives with 14 to 15 years of experience from large organizations,” he said. “Many were close enough with my age and life group to ask about work and how they manage the C-suite and balance children and family and career. I thought I would learn from them in a different way than I would from a younger cohort.”
Besides becoming a more effective leader, Spillane said he had one unexpected benefit from the $180,000 that he invested. “Having my children watch me go to school, to put the goal out there, to struggle with study materials and be anxious about test results but to persevere and graduate — that’s been priceless.”
Another place where older students are headed for MBAs is online. The average age MBA student at the University of Illinois Urbana-Champaign is 28. However, students in its four online iMBA cohorts are age 37 on average. Students over age 40 make up an average 35 percent across those cohorts.
The oldest candidate is Al Harms, a 68-year-old retired vice admiral of the U.S. Navy. He joined Illinois’ initial January 2016 online MBA program from his home in Sanford, Fla. “U. of I. is my alma mater,” said the Monticello, Ill.-native. He was chief learning officer in the Navy, responsible for education and training for the military branch. He later spent eight years at the University of Central Florida in a variety of posts including vice president for strategy, marketing, communications and admissions. He now sits on a variety of charitable and corporate boards and does some consulting.
“You’re talking to a guy who is not looking for another career,” he said. “I’ll take this where it takes me; it may be teaching. It opens up a whole bunch of doors. It rounds you out professionally and gives you some tools that would be attractive to either fiduciary or advisory boards.”
While he estimates the whole package cost about $22,000, he said he used his G.I. Bill for the first time to pay for it. “This program is stunningly inexpensive compared to most online MBAs,” he added. “The ROI is almost priceless.”
One issue for older students is when surprises disrupt your career or studies. Heather White, 49, has completed about a third of the evening MBA program at Northern Illinois University. In 2016, that program drew candidates spanning ages 21 to 61, according to a university spokesman. Among them, 17 percent were 40 and older, including 5 percent who were in their 50s or older. In its 2016 executive MBA class, 40 percent were between 40 to 49.
White’s employer at the time had a $10,000-per-year tuition reimbursement program that over two years would have nearly covered the cost of the degree. But last year her position was eliminated in a restructuring, so she suspended her studies to avoid creating additional debt. She since has joined Hitachi High Technologies America in Schaumburg as a senior credit and collections analyst, but now is facing health issues. When she resumes the program, she’ll bear more of the cost. She initially expected to pay $4,000 of her estimated $25,000 tuition. Now she expects to pay $6,000 to $8,000 herself.
“That’s another thing with age: You never know what’s going to derail you,” she said. “As you get older, health can surprise you, or you have a job elimination because you may be at a higher salary.”
Another common concern for senior students is how their age or time since their last academic experience might affect their performance. “Before I applied I thought, ‘Man, I’m going to be an outlier,’” said Grad, the Kellogg MBA alum. The average age for Kellogg’s executive MBA class was 37.5 compared to the regular MBA average at 28. But he audited a couple of classes, and that eased his mind.
“Everybody without exception in the first quarter was slow off the mark,” said Grad. “After the first four to six weeks … my muscle memory kicked in again, and I was going for the high honors grade in every class I took. I wasn’t going to be satisfied just getting a pass.”
His class elected him to give a commencement address at their graduation.
August 23, 2017