Studying for an MBA means a serious personal and financial commitment, but the potential rewards on offer at the end of the course are huge

Next to buying a house or having a child, your Masters in Business Administration (MBA) is likely to be one of the most expensive investments you ever make. A one-year full-time course can set you back as much as £35-£40,000, including living and other expenses.

Next to buying a house or having a child, your Masters in Business Administration (MBA) is likely to be one of the most expensive investments you ever make. A one-year full-time course can set you back as much as £35-£40,000, including living and other expenses.

Of course, how much you pay depends on where you go. A full-time MBA costs £27,000 at LBS, £18,500 at Cranfield and £16,000 at Said Business School, Oxford, compared with £9,250 at Aston or £6,250 at De Montfort. The cost of part-time courses can vary even more.

Why some institutions can charge high fees and increase them significantly every year depends largely on market forces. "Prices go up because the reputation goes up," says Professor David Norburn, director of Imperial College Management School, which has six applications for every place, "but it means I can buy in better faculty and better facilities, and lay on more interesting trips. You can't make a Savile Row suit out of a paper bag." More expensive schools can also usually offer more tempting add-ons, such as a free laptop, help setting up your own business, or well tailored career guidance.

And as Professor Anthony Hopwood, director of Oxford's Said Business School, points out, MBAs don't get any state subsidies and require a lot of staff. "They are taught much more intensively than other specialist masters programmes. Teaching students through business projects in groups of four and offering regular supervision is a very labour-intensive process."

Whether you should fork out that sort of premium depends on what you want your MBA for. You don't really need an internationally known, high-cost programme if you just want to extend your management knowledge to boost your career with your employer, or learn how to run their own business.

But if you want to get work with a top-end employer, reputation is essential, says Hopwood: "In some senses business schools are operating as selective filters into top-class national employers."

And the more you pay may mean the quicker you get it back, says Norburn. "There are more than 120 providers in the UK and lots of different versions of the MBA, and I reckon there are half-a-dozen that are worthwhile if what's important to you is getting your money back reasonably quickly."

That said, most MBA students will find that they are well rewarded for their investment. The latest Association of MBAs salary survey shows that, allowing for inflation, the average pay rise for all MBAs was 25 per cent. At Bath, for instance, salaries for full-time students on graduation average £55,000, compared with an average entry level of £25,000. "Some of our students have doubled or even tripled their salaries on graduation," says Amanda Brook, manager, external affairs at the University of Bath School of Management, "although a lot depends on the sector they enter."

But an MBA is not just about money. It may offer the only tried-and-tested way of switching careers, or moving from a narrow technical specialism into more strategic general management. Increasingly it can give you the essential entrepreneurial skills you need to set up a robust new business. It can even offer a breathing space and a chance to assess where you want to go next.

"Since the MBA was imported to the UK in the mid-Sixties it has slowly become a desirable thing that any ambitious young graduate really does need to think about," says Professor Leo Murray, dean at Cranfield School of Management. "It's almost a rite of passage."

So how should you go about choosing a course? Talk to as many people as you can is Murray's advice: "Find out whether people appreciate it, whether it's got brand recognition. Then look at what you're going to learn and whether you recognise any staff names. You've got to get behind the glossy brochure and try to really get a feel for the place." Norburn goes one further, recommending sitting in on a classes, and a bit of in-depth research. "I would look at how many millionaires are on the faculty and, more to the point, who has subsequently lost it."

Brook recommends you look at the quality of your fellow students. "Does the school attract the type of people you want to associate with? The quality will determine the alumni and employer networks." Above all, try and get a feel for the atmosphere, she says: "However great a school might look on your CV, if you're not going to enjoy your time there or feel at home with its ethos and culture then it may not be worth it."

On a more prosaic level, you also need to think hard about the course format. Many people have strong views about whether employers are more impressed by full- or part-time study, but Murray thinks there's not much in it. "Full-time does show a huge degree of commitment, particularly financially, but so does a part-time MBA, where you're doing a job and handling a family while studying."

Of course there are considerations other than market clout. Full-time is often better for those who want to leave their job or make a switch of direction, and offers more opportunity to learn from your cohort and build up a network of contacts. The downside is that it is much harder to get company sponsorship compared with those on part-time courses, who also have the advantage of being employed while they study and the ability to spread any personal cost over a longer period of time.

A part-time course also lets you put your new knowledge and skills into practice immediately, and this can give you a lot of leverage in terms of getting funding from an employer.

"Companies who sponsor part-time students get enormous added value," says Brook. "They often say the costs and benefits compare very favourably with what they spend on other types of training. With our assignments and projects all based on students' own companies, they get a very cost-effective form of consultancy and the chance to have projects done that might not be accomplished otherwise."

But even though 80 per cent of respondents in the Association of MBAs survey received some form of employer support, 58 per cent still had to finance their studies through personal funds, either using their own savings, taking out a Career Development Loan, or opting for a loan through the Association's finance scheme.