It goes without saying: Business school doesn’t come cheap. MBAs are some of the most expensive graduate degrees out there, with students graduating with an average of more than $71,000 in debt.
Tuition prices vary but can approach astronomical levels, with top universities like Columbia and University of Penn exceeding $100,000 for some programs — and that doesn’t always include room and board.
When examining the true cost of an MBA degree, consider costs beyond tuition, including books, fees for clubs, any study abroad expenses that may crop up, and other living expenses. Getting an MBA can be expensive, but it can also pay off with a rewarding, and potentially high-paying career.
Deciding whether or not getting an MBA is right for you is a personal decision. To help, we’ve put together this list so you can begin to figure out the cost, value, and logistics behind funding that MBA. Between scholarships, sponsorships, work opportunities, and private and federal student loans, there are ways of funding even the most expensive education.
MBA School Costs
So, how much does an MBA cost? The answer will depend on a variety of factors, such as school ranking, tuition structure, enrollment status, cost of living, and fees.
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MBA costs are also influenced by a student’s ability to qualify for financial aid, scholarships, and employer assistance.
It’s helpful to consider these factors and your chance of acceptance when evaluating MBA programs.
MBA School Requirements
To be accepted into an MBA program, students typically need to submit proof of a bachelor’s degree from an accredited institution, personal statement, letters of recommendation, and resume. Some schools require the GMAT or GRE, or set GPA minimums for admission.
It’s worth noting that top business schools like NYU, Harvard, and Stanford have acceptance rates below 20%. Working with an MBA application consultant could help finetune your writing and communication style to improve your candidacy for competitive programs.
Once enrolled, MBA students generally complete between 30 to 60 credits over two years of full-time study. Some accelerated MBA programs may be completed in as little as one year.
Private and Public MBA Tuition
Excluding scholarships and financial aid, public in-state tuition can be a student’s more cost-effective option for higher education. This rings true for prospective MBA students in certain states. For instance, the total MBA program cost at University of Washington is $73,518 for in-state students, compared to $107,202 for out-of-state students.
However, the difference between in-state tuition and out-of-state or private tuition can be marginal at some high ranking public MBA programs. For example, 2021-2022 tuition at the University of Michigan is $67,114 for in-state students vs $72,114 for non-residents.
Total Cost of an MBA
The total cost of an MBA degree means more than just tuition expenses. Many MBA students will have to pay for textbooks, transportation, extracurricular activities, and other living expenses as part of their education.
This more comprehensive expense list is used to calculate the cost of attendance, which is an essential step in determining how much aid a student is eligible for.
A student’s enrollment status also impacts MBA cost. Studying part-time can allow students to pay per credit hour and continue working, though dropping below full-time enrollment status may impact eligibility for some scholarships.
While comparing options, prospective MBA students could benefit financially in the long run by considering the lost opportunity cost of working and the return on education. Put simply, how does the MBA cost compare to the increasing earning potential after graduation?
How Much Does an Online MBA Cost?
Relocating or commuting may not be feasible for all prospective MBA students. Choosing an online MBA program can offer more flexibility and a lower overall cost for some students.
Keep in mind that the cost of online MBA programs can vary greatly. Top ranking online MBA programs — UNC and Carnegie Mellon — cost over $125,000 and $140,000, respectively, for full-time students. The most affordable online MBA programs cost between $250 and $450 per credit.
Cost-Benefit Analysis of Getting an MBA
At the lower end, tuition costs for business schools may come in around $40,000 a year; at the higher end, it’s more than $70,000 a year . Elite schools like Harvard, Stanford, and the University of Chicago can leave students with over $140,000 in debt.
Even considering the increase in salary for those who went to prestigious programs — Stanford graduates make an average of $159,544 a year — those upfront costs of tuition can be intimidating. And let’s not forget, there are still costs that don’t factor into tuition.
Clubs, for instance, might be a necessary networking tool, and they come with a price tag that’s hard to factor in. And how about a trip to study in India? Traveling abroad pushes your costs up even further.
Even if you’re not looking within the Ivy League schools, many other schools offer competitive and expensive MBA programs, such as NYU or Stanford. That being said, many MBA programs offer scholarships, based both on merit and need. NYU reports awarding merit-based scholarships to up to 25% of students, while around 50% of MBA students at Stanford receive fellowship funds averaging $40,000 per year.
Keep scholarship availability in mind when researching schools, since aid varies widely. Stanford, for instance, has one of the highest costs of attendance (around $119,964 a year ) but students can graduate with far less debt than most top tier MBA programs due to their need-based financial aid.
Ways to Pay for Your MBA
Assuming you don’t have $100,000 lying around for a rainy day, you, like most of your fellow graduates, will have to get creative. Beyond scholarships and fellowships, mentioned above, here are some other options to help pay for your MBA.
Employer Sponsorship
Sponsorship through a company is possible but relatively rare, and it can come with strings attached. For instance, you may be contractually obligated to stay with the company sponsoring you for a certain number of years, which may prove limiting if you don’t see a future with that company or in that field.
Many students choose to work summers, or even during the school year. However, some schools advise students not to take on part-time work due to the workload and the importance of extracurricular activities.
Student Loans
Depending on your financial situation, chances are it might be necessary to consider applying for MBA loans, whether private or federal, to pay for your MBA. Unlike private loans, Federal loans come with certain protections to those who are eligible, including income-driven repayment plans, grace periods, deferral, and forbearance. If you want to compare federal options you can check out the Department of Education’s information .
For federal student loans first disbursed on or after 7/1/2021 and before 7/1/2022 interest rates vary from 5.28% to 6.28%, depending on loan type, for grad students. Interest rates on private student loans will vary depending on factors such as the lender and the applicant’s credit history, among other criteria.
If you aren’t able to borrow enough in federal loans, private student loans could be an option to help cover the remainder. Keep in mind that private loans don’t offer the protections — like income-driven repayment plans — that federal loans do. With SoFi, MBA students can couple their financing with career services and coaching. SoFi’s MBA loans carry zero fees and offer a variety of repayment terms and options.
The Takeaway
For the top American universities, average post-grad salaries range from $126,957 (University of North Carolina Chapel Hill) to $150,000 (Columbia University) for the class of 2020. On average, graduates from the top 20 MBA programs are making almost one and a half times their amount of incurred debt.
But it pays to look beyond the Ivies. Graduates of Brigham Young University’s MBA program have the top salary-to-debt ratio in the country, with graduates making exactly double their incurred debt each year. In contrast, however, schools like Strayer and Kaplan University, on average, cost more than graduates end up making.
Long story short: Do your research. Make sure your school is one that will get you an Ivy League paying job — not just an Ivy League bill.
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