>> bloomberg businessweek is out with that new issue with fresh rankings for the best business schools. at the top of the list once again is stanford.

we are going to dig into where grads are getting jobs, and also dig into the big elephant in the room which is the mba even worth it. some of these schools cost you $80,000 a year, maybe even more than that. a two year program, that is a lot. caroline: are you the one paying? romaine: not me. taylor: let's take a look at a cold chart and break this down because you're hitting on a good point we are going to get to. what is the value of all this? who is paying? what do you do in an era of social distancing? but before we get to all that, it is one of the best read articles that we do every year. we're getting our bloomberg businessweek mba ranking. romaine said it, it's stanford. romaine: look at that. taylor: dartmouth is second.

harvard third. i will give a shout out to my california crew ou tthere. romaine: california is a big state, yet you only have one. chicago is just a city and we have two. taylor: this is going to be a rough 30 minutes. but this is really cool. we do these rankings based on almost 2000 surveys. you look at compensation and employment data and you can get a lot of info from this. caroline: the person hope to put this all together, caleb solomon, bloomberg businessweek senior editor. you put these rankings together and once again, the same old names that come out on top. remind us how you do the rankings. what puts them in pole position? caleb: we measure a pile of different things. we measure compensation, how much money do you make, how much

money do you get out of school, do you get jobs. we measure the quality of the network, how good were the alumni relations when you were a student. we survey the students, we survey alumni, we survey employers who hire business -- from business school. we combine the two and end up with our ranking. romaine: this is always an interesting issue and the data and the research that goes into what, i know it is enormous. i was interested in the diversity of rankings, particularly because some top business schools with regard to the overall ranking did not necessarily write anywhere close to the top with regard to diversity rankings. caleb: this was the first time we or anybody put together a diversity index that actually measured race, ethnicity, and gender. we wanted to do this a couple of years ago, but fools were

reluctant to give us that data. they were not giving it to us in a consistent way. that changed last summer, so we were able to get that information this year. it was revelatory. we did not really know what we were going to get, because this data did not exist before. we learned of 84 u.s. business schools we ranked, only five had a majority women in their class, which is so different from college, medical school, law school, where women make up a larger scale of the classes. a number of schools had no hispanic students. a fair number had absolutely no black students. it was a really shocking number. then looking at the reverse side, a decent number of schools had a large number, and also had a large number of women and underrepresented minorities in those classes. so you're looking at a handful right there. taylor: talk to us about what

surprise you the most in this ranking. what stood out to you that was different this year to previous years you have compiled this list? caleb: since this was the first time we ever did the diversity, i guess what was most surprising was we kind of figured that the numbers would be low, so the percentages of underrepresented minorities would be much lower than the population. we did not realize at how many schools it was so much lower. and the schools that did well tended to be smaller programs that we did not know as much about, like north carolina state was number one state in our diversity index. number two was george washington, based in washington. number three was howard, which is a little less surprising because it is a historically black university. as romaine mentioned, the top-tier schools, it was always assumed that they would do well

in this kind of thing. so a couple did ok, but the way i look at it is none of the top 10 schools in our overall rankings, none of them made it into the top 10 in the diversity index. romaine: i am curious, how much do schools care about this, particularly the schools who are not on the top of the list of diversity? we look at mba's being the future ceo's of america, of the world. these are the next crop of business leaders. if that group is not diverse, then what does it say about the future of corporate america? and i'm wondering how much care or concern some of these universities have about some of these numbers. caleb: you make a good point. the pipeline, business schools are the pipeline. so the pipeline is pretty weak at the moment. at the same time with the murder of george floyd raising national awareness that took place

afterwards, it really changed things a lot. a lot of schools that were not focusing as much on diversity are. and of those who have been doing this for a while and were more successful at it are doing it in a more sustained way and they are seeing a huge appetite by companies to hire a more diverse workforce out of the mba graduates than years ago. caroline: the price point difference between some of the ones that are coming up stronger in diversity vis-a-vis the ones that are winning in general, stanford and the like. is there a price point difference, and coming out of business school, is there an earnings potential difference? caleb: we did not exactly slice it that way. but what i can tell you is that business school graduates, the median compensation they had this year versus last year continues to grow. the demand for mba's all across

the board was much higher, even though we are in a pandemic. romaine: all right. caleb solomon, senior editor for bloomberg businessweek, doing a lot of the research, a lot of the heavy lifting for the latest issue which has that annual ranking of the top business schools. we are going to continue this conversation and speak with the associate dean of one of the top business schools, brad killaly, associate dean at the university of michigan school of business. this is bloomberg. ♪ his is bloomberg. ♪

romaine: the latest issue of bloomberg businessweek, top rank the business schools is out. it ranks them based on what

makes good schools and diversity and also ranks them on cost. we know that an mba is not cheap. caroline: it is not. the costs are different from one to the next. we wanted to try a broad brush approach. stanford, $76,000. that is not bad if you're coming out number one. columbia, itty $6,000. howard, $36,000. michigan, $72,114. is the student paying for this, is the company that is sponsoring you? whatever the case, it increases your earnings potential. it's an investment in your future. i cannot believe you have not -- brad killaly and speak to all of this. -- can speak to all this. is great to have some time with you.

when you look at the cost, it immediately does look like an awful lot of money. of course it is an investment in your future. can you give us a breakdown of affordability? is it companies that help put them through it? brad: thank you very much for having me. when you see those figures, they can be a bit shocking. for someone who is considering an mba it can be shocking. but it's an entire range of resources brought to bear for making that investment. i'm glad we talk about it as an investment because it is a particularly strong investment in one's career and life opportunities. depending on the school it can be corporate sponsorship, personal investments, earned scholarships, as well as loans. i think financing an mba can be a particular challenge for many people because they see the sticker price and the opportunity costs of their time. but really, the return is almost

universally there across all leading business schools in terms of earnings as well as a long term career trajectory. taylor: we have been talking a lot not just on this program, but in the last few months, about compensation, labor shortage, increase in wages. how much of the value proposition is coming to fruition in the way of higher compensation on the other side, and is it a bigger difference this year than it has been in previous years? brad: what we are seeing, and i think your previous guests spoke to, is we are seeing improvements on the median salaries in graduation, improving and increasing every year. what we do when we talk to prospective students, whether under executive or full-time or online mba, is we talk about really that whether it's that return or that breakeven point. for us, it's a tremendous

investment, but it is the long-term trajectory of the earnings. which is absolutely improving. it's also the opportunity for a variety in one's career path and accessing a different suite of leading employers around the world. romaine: we talk about career paths, we know the business rule changes and adapts with society. of course business schools have had to adapt as well. obviously you have support curriculum of learning finance and general management, things like that. i am wondering what other changes have been made to the program over at ross over the last few years to keep the curriculum updated for modern times. brad: thank you very much for the question. i will build on your comments with the previous guests and this segment. one of the most important changes we have made, and it is a discrete change but it will be a continuous change with purposeful improvement forever. and that is how do we create

leaders, educate leaders, and create the environment to individuals can lead in a diverse and equitable workforce and society. this will be the anchor to how we approach our education and the innovations in education. it is beyond our core courses and the fundamental curriculum that makes us the most diverse degree out there for an mba. it is also how we create that ally ship, how to not only work but lead and be part of the workforce of today and tomorrow. yes, we have along with ago, and yes, we're going to continue and persist in that investment. the other thing i would add is the shift, not so much a shift, but a reliance upon and the use of how we understand data in the marketplaces and how we employ that data to create value in the market and society. so we thick about data analytics translation, management science. we see that shift in our curriculum and the

specializations and over 50 dual degrees you can take at the university of michigan. caroline: what is interesting is the strength that is highly shown at university of michigan law school has been networking. you come out very strong there. in this age of virtual schooling and interactions, how is networking developed? how are you able to continue to foster that at this time? brad: precisely. if we were thinking before the pandemic, we would obviously be running multiple different alumni events around the globe, not only for michigan, but our university as a whole, and developing and fostering and encouraging those connections around the globe for our alum for business and career opportunities, and also enjoyment and exploring the world and being part of a larger community. with -- prior to covid, we made

investments in this wonderful studio to be at the forefront of the virtual vanguard of education and we think of virtual is an opportunity to not only build connections within our alumni communities and across our organizations, and where all of our wonderful students are employed and are being entrepreneurs, but we also think of it as an opportunity to bridge those connections and be able to leverage even greater the alumni network through a virtual landscape. we think of this as a challenge for most educational institutions, but i think of this as a wonderful opportunity to expand our, reach our impact, our education, and to support their lifelong learning journey. not just a degree, but learning forever. taylor: humor us, if you will. there have been online huge debates of an mba vs. a cfa.

we're going to be covering that a lot in the next segment. a lot of people say the mba is really helpful, particularly if you're thinking about really just pivoting careers. you need a full foundation to make a big jump. you argue that might be perhaps one of the beneficiaries over another type of program? brad: you have set the bar really high by asking me to humor you, and that generally does not work out well for anybody when they hear my response. but let me indulge you. let me use a really poor analogy. think of a multitool, like the swiss army knife. i think of an mba as the most versatile graduate degree you can get. and so, you feel comfortable using all of those instruments, all of those tools to encounter multiple different, ambiguous, uncertain, and fantastically siding business opportunities as an entrepreneur, a leader, an

employee, what have you. think of those tools as your foundational courses, but your leadership development, your ability to thrive in a diverse environment, to really advance organizations. that's the angle that i would -- not only angle, but it is what i believe, is that versatility. yes, i think it is one of the big advantages that allows you to succeed and stride in any function. romaine: brad is great, despite being from mission -- michigan. taylor: not despite, but because of. romaine: wildcats and wolverines. taylor: you know he is from the michigan law school of business. really appreciate your time. that was the beginning of a long debate, a debate that we have daily. mba or cfa? caroline: you guys have it. i have neither.

you have both. you are the only judge. taylor: which is the best way to go? i have so many thoughts. we are going to get better thoughts from robin young, ceo of behaving wealthy. this is bloomberg. ♪ his is bloomberg. ♪

romaine: today we are focused on the new business school rankings released by bloomberg businessweek. but of course this raises the old debate about whether an mba is worth it, or whether there are other professional credentials that might be a better use of time, specifically the cfa. you are a charter holder, i am told. caroline: not even level 1. taylor: i took it easy. when i did it in 2018, 45 pass ed. now only 22 passed. romaine: the test was easier

when you took it. taylor: apparently, i think so. so certainly you are seeing these success rates really come down on all levels. let's dive into more of this with robin young, certified financial planner, ceo of behaving wealthy. robin, take off the debate for us. i am certainly on one side. tell us your story. robin: absolutely. so happy to be here. i was thinking about mba versus cfa, and i thought to myself, what is the right answer, and i realize it is actually not one right answer. i think it's an individual decision, but there are five questions you can answer that can help you make the decision for you. question number one, what are your career goals? question number two, what return on investment do you want? network, capital, access, credentials? number three, when do you want

that return on investment? ne is sooner-- one is sooner, one is later. four, what is your end client? and finally, what are you willing to sacrifice? caroline: just to give background on you, in 2006 you got your mba from webster university and you started down the path of a cfa, then you decided you didn't need that level of technical expertise. what part of those five elements was not right for you when it came to a cfa? robin: number four, actually. we think about the end client, i finished the cfa and i was so excited. i mean, i put so much time into passing it, and when i got that pass, i do not think i have ever been that excited. but once i got it i was like, ok, now on to level two. like, what's next? at that point i was making the decision to start my own firm,

and i was thinking about, what do i need in terms of skills to make sure my firm is successful. that is when i was like, i don't think my next necessary, deal breaking skill set is wealth management in terms of, is this particular company better than this company. so i said, i need marketing, i need sales. i have an mba, so let me dive back into that. it was really when i decided i wanted my end client to be my consumer, and i needed to touch them versus touching an institution in terms of investment management. caroline: it is all about your end consumer. robin young, great to have some time with you. ceo of behaving wealthy. while the risk we ward for an mba, remind me romaine, you have how many levels? romaine: i am on 2.5.

caroline: he is almost there. romaine: we will see. i may just jump ship now and get an mba. taylor: go through with it. you will be rewarded. caroline: you are networking -- your networking is second to none. romaine: have a great evening. ♪

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>> this is bloomberg technology with emily chang.