It’s no secret that studying an MBA comes with a significant price tag. The average cost of MBA tuition for top MBA programs is around $226k in the United States and $189k for the top 20 business schools globally, according to the 2022 Financial Times MBA Ranking.
After you factor in living costs, extra-curricular activities, healthcare, and the opportunity cost of taking time out of the workforce for a full-time MBA, the overall cost of an MBA is even steeper.
So why does the MBA cost so much and what can you do to make your MBA experience more affordable?
Why are top MBAs so expensive?
With the variety of experiences on offer and teaching from world-class professors, running full-time MBA programs is a significant expense for business schools.
Here are a few factors that play into the high cost of an MBA degree:
Business schools invest in expert faculty. Top MBA professors often have extensive industry experience as well as strong academic credentials, and this knowledge comes at a cost.
Learning from these experts is one of the main benefits of an MBA, and since professors have a significant impact on your business school experience, it makes sense for schools to invest here.
Along with expert faculty, many top MBA programs provide on-campus resources such as Bloomberg trading terminals and innovation labs—not to mention all the technology needed to enable blended learning. Business schools are increasingly using cutting-edge digital learning models like the metaverse to deliver programs online, which of course come with increased costs.
Providing space for lecturers, tutorials, and study can also be pricey—especially since top schools tend to be located in business hubs where real estate is at a premium.
Trips and visits
Beyond everyday teaching, providing additional experiences can also drive up the cost of an MBA.
Many programs incorporate the costs of international business trips, real-world consulting projects, and other experiences into their fees. Equally, organizing career fairs, workshops, and coaching makes providing an MBA an expensive endeavor for schools.
Despite the large initial cost, studying an MBA typically comes with a significant return on investment.
According to Graduate Management Admission Council (GMAC) research, the average MBA salary was $115k in 2022. At Wharton, the business school with the highest-earning MBA graduates, students can expect to receive an annual salary of more than $237,530 on average within three years of graduating, increasing their earnings by 115% post-MBA.
And the ROI isn't purely financial. Studying an MBA gives you access to a diverse and far-reaching alumni network, personalized career advice, and the opportunity for lasting personal growth.
The high MBA fees you'll pay are proportional to this lifelong return.
Variations in the cost of MBAs
According to our BusinessBecause Cost of MBA Report, the most expensive MBA in the world is offered by NYU Stern in the US, which will set you back almost $165k in tuition fees alone or an estimated $246k in terms of total outlay. Other M7 business schools—including Wharton which is currently ranked the best business school in the world according to Financial Times and remains amongst the most expensive—cost an estimated total of $237k for two years.
But some highly ranked programs cost significantly less. An MBA at London Business School is ranked eighth in the world, according to the Financial Times, and works out at around $155k in total for tutition and all aspects of living costs, while Spain’s IESE is ranked 10th costs approximately $138k.
In fact, for students from the US, the current strength of the US dollar makes studying abroad even more of an advantage when considering the cost of the MBA. The increase in the value of the dollar compared to currencies such as the Chinese Yuan, British Pound, and Euro means that for US candidates in particular, European and Asian business schools have seen the largest fall in costs this year. For example, the cost of studying at London Business School has decreased by 21% when calculated in dollars, according to our Cost of MBA report.
Pursuing a one-year MBA program rather than a two-year MBA can also help you keep costs down and means less time spent out of the workforce. The most expensive one-year MBA, at INSEAD, still costs significantly less than the most expensive two-year MBA, according to our Cost of MBA Report.
How can you make your MBA more affordable?
Whatever MBA program you choose, there are steps you can take to make your MBA cost less
You should firstly thoroughly research the MBA scholarships available to you. Most MBA programs have several scholarship opportunities, which may cover part or all of your tuition fees.
Many scholarships are aimed specifically at women, ethnic minorities, or international students, while others recognize top academic talent, leadership potential, and GMAT scores.
Chris Abkarians, co-founder of the MBA loan negotiator Juno, says most students won’t pay the full MBA program cost as advertised on a school’s website.
“Many US schools have large aid budgets, both merit and need-based, that bring the price down,” he says.
If you’re initial offer for financial aid isn’t as much as you had hoped, there’s stillroom to negotiate your scholarship offer.
“Your financial aid award letter is a first draft, not a final product,” Chris says. “If you got into other programs that offered you financial aid, tell your top choice that you would love to attend if it made more financial sense.
“Don’t feel bad about asking—admissions offices have wiggle room set aside for this,” he adds.
You could also finance part or all of your MBA by taking out student loans.
Although an MBA is expensive, the career progression, global network, personal development, and high salaries enjoyed by MBA grads means you can expect a strong return on your investment.
Next Read: Who Are The M7 Business Schools?
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