How to calculate ROI on your Master's degree

While the prospect of a six-figure financial investment may seem daunting, the potential returns, such as higher salaries and career advancements, make it a worthwhile endeavor. For instance, with an MBA, you could potentially double your current salary! However, it's important to consider the opportunity cost involved.

If you leave your current job to pursue a Master's degree, you'll forgo your current salary, so it's essential to factor in this opportunity cost when calculating the ROI. If you're considering anglophone countries like Canada and the United Kingdom for your studies, continue reading to learn about course fees and the costs associated with pursuing a master's degree.

When calculating the ROI of a Master's Degree, you need to consider both costs and benefits. Here's a breakdown:

Costs:

• Course fees

• Current annual salary (including the opportunity cost of not working)

• Living costs, such as food and accommodation

Benefits:

• Higher annual increment

• Higher expected salary with a Master's degree

To calculate the tangible ROI of a Master's Degree, subtract the total costs from the total benefits. If you earn more over time by studying for a Master's Degree than you would by continuing to work in your current job, then the ROI is favorable.

However, there are also intangible benefits to consider when studying abroad for a Master's Degree. It's an opportunity to explore a new location, immerse yourself in a different culture, and potentially reignite your passion for your field of study. Keep in mind that the quality, reputation, and relevance of the Master's program should also be crucial factors in your decision.

For an estimate of how much an MBA (Master of Business Administration) might cost in some of the most popular English-speaking countries, continue reading.

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.

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.

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There are several online calculators to find out the ROI of a master's degree. Here are our top picks:

#1: Money Under 30's Grad School ROI Calculator

#2: Quartz at Work's Grad School Calculator

#3: Prodigy Finance's Masters ROI Calculator

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!

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.