B-School

What Is a B-School?

In finance, the term “B-School” is a shorthand term that refers to schools that specialize in business subjects. These include both undergraduate colleges and graduate schools. The most well-known B-School offering is the Master of Business Administration (MBA) degree program.

B-Schools are known for their highly competitive admission standards, with the most sought-after schools regularly rejecting over 90% of applicants. These schools have also been the subject of debate in recent years because of their substantial financial costs (the tuition of some B-Schools can surpass $100,000 per year).

Topics of Study at B-Schools

B-Schools are similar to other post-secondary higher education institutions, except that they are focused on subject areas related to business and finance. Common examples include accounting, finance, marketing, and entrepreneurship. In some cases, schools will offer specialized programs in less common areas of study, such as actuarial sciences or taxation law.

As with other institutions, various rankings exist which aim to help students assess the quality and prestige associated with specific schools. These include rankings published by The Financial Times, The Economist, and BusinessWeek, among others. Although the exact placement of schools changes from year to year, examples of schools with consistently high rankings include the Stanford Graduate School of Business, the University of Chicago’s Booth School of Business, London Business School, Harvard Business School, and the University of Pennsylvania’s Wharton School.

Although schools at the upper echelon of international B-School rankings will excel in multiple areas, they are often known for having certain areas in which they are particularly strong. For instance, the Wharton School is known for its excellence in finance, whereas Harvard Business School is known for its general managerial education.

Financial Cost of Attending B-Schools

In addition to considering each B-School’s prestige and specialization areas, it is also important for prospective students to carefully weigh the costs of attendance against the potential benefits of obtaining a B-School degree. After all, attendance costs can reach above $100,000 per year for the elite B-Schools, and even less prestigious schools will routinely cost over $50,000 per year. For many students, this will require incurring substantial student debt. Student debt can be a drain on a student's financial life for many years or even decades following graduation.

Pros and Cons of B-Schools

Given the brand recognition of famous B-Schools such as Harvard Business School and the Stanford Graduate School of Business, it can be tempting to think that these schools should be a top priority for any student able to gain admittance to them. However, once the full costs of attendance are taken into account, other B-Schools may appear more attractive by comparison.

For example, the student loan refinancing company SoFi published a ranking of B-Schools in 2018 that aimed to show the best return on investment (ROI) of those schools’ MBA programs. The analysis was done by comparing the average salaries obtained by their graduates to those same graduates’ average student debt levels. 

The results from this analysis showed that the highest ROI among the schools surveyed was offered by the University of Wisconsin-Madison, which offered an average salary-to-debt ratio of 2.33. By contrast, the salary-to-debt ratios of Harvard Business School and the Stanford Graduate School of Business were given as 2.21 and 2.18, respectively. 

For context, the average salary-to-debt ratio for all B-Schools was found to be roughly 1.5, with an average salary of just under $110,000 and an average debt level of approximately $75,000.