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Hey, Bargain-Hunters: An M.B.A. Is Cheaper Than You Think

Top business schools are subsidizing the cost of two-year master’s degrees in business administration by setting aside millions in scholarships and financial aid to lure young professionals out of a strengthening job market.


By

Kelsey Gee

One of America’s priciest graduate degrees is on sale.

Top business schools are subsidizing the cost of two-year master’s degrees in business administration by setting aside millions in scholarships and financial aid to lure young professionals out of a strengthening job market.

The advertised price for a traditional M.B.A. can top $200,000 at the most competitive schools in the U.S., but some 61% of this year’s students are receiving scholarships based on merit, financial need, or a combination of the two, according to data from the Graduate Management Admission Council, which administers the standardized test commonly taken by business-school applicants. That is up from 41% in 2014.

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For the Harvard Business School class of 2019, the average fellowship award cuts tuition to $35,000 from $72,000 a year, according to a spokesman. HBS administrators draw from a pool of $32 million to help more than half the M.B.A. program’s 900 students each year, up from $15.5 million in 2009.

The scholarship endowment of Dartmouth College’s Tuck School of Business has roughly doubled to $87.6 million since 2004, to help draw students who might otherwise recoil from the degree’s sticker price of $68,910 a year.

“There’s been a real focus on eliminating financial considerations as a barrier for enrollment in recent years,” said Luke Peña, Tuck’s director of admissions and financial aid, who joined the school from the admissions office of Stanford University’s Graduate School of Business last year.

A number of business schools are trying to bring the intensity and experience of a live lecture theater into an online environment for their M.B.A. programs. Parminder Bahra looks at the new technology the schools are using, from sentiment analysis to video cameras. Photo: IE Business School (Originally published Jan. 4, 2017)

Joky Kong, a first-year M.B.A. student at University of Southern California’s Marshall School of Business, said he had been confident the program would reconsider its initial financial aid offer to him after he received a generous scholarship from the Tepper School of Business at Carnegie Mellon University.

Marshall’s admissions officers matched Tepper’s offer, and provided Mr. Kong an additional $5,000 a year in scholarships to sweeten the offer, which Mr. Kong said he happily accepted.

“Once you receive an offer—and especially if you have multiple offers—you have leverage,” the 28-year-old student said. In his study group of six M.B.A. students, five received scholarships from the school, Mr. Kong said.

Once considered a must-have for swift advancement in fields like finance and consulting, enrollment in full-time M.B.A. programs has fallen by more than a third since 2010, as wages for many workers have improved and shorter, specialized degrees have launched at business schools across the country.

The discounts also come at a time when more young workers are footing their own M.B.A. tuition bills. Only 8% of students expected to receive employer support to pursue full-time M.B.A.s in 2017, according to GMAC data.

Universities typically don’t disclose how much aid they dole out to graduate business students. But administrators, admissions consultants and industry watchers say that fierce competition for candidates with top-tier test scores and work experience has encouraged schools to beef up their war chests with new scholarships and fellowship packages, and to be more aggressive in countering financial offers made by other programs.

“We encourage all applicants to negotiate, across the board,” said Michelle Clifton, an adviser with EdAssist, a division of Bright Horizons Family Solutions Inc., and former associate director of financial aid at Babson College. “It’s not always going to result in more funding, but sometimes it will, and you don’t know until you ask.”

The flexibility of aid packages has long been a topic of intrigue in higher education. Although some business schools say their scholarship offers are final, others acknowledge wiggle room to boost awards.

A security breach of confidential data at Stanford University last fall revealed 10 years’ of financial-aid decisions at the M.B.A. program and shed light on how the elite school doles out scholarships.

Until November, the business school’s financial-aid website said that awards were based solely on financial need, and that the school didn’t give merit-based fellowships. But an analysis of the exposed data by M.B.A. student Adam Allcock, reviewed by The Wall Street Journal, found that students with nearly identical financial situations receive “vastly different” fellowship awards, depending on factors like gender.

The dean of Stanford’s business school, Jonathan Levin, said in a note to students and staff in November that the school offers “additional fellowship awards to candidates whose biographies make them particularly compelling and competitive in trying to attract a diverse class,” and that it would clarify aid policies beginning with the next admitted class.

At the Jones Graduate School of Business at Rice University, around 96 students of this year’s class of 120 are receiving merit-based scholarships. The average discount shaves 68% off the program’s official price tag of $58,000 a year. That is up from an average scholarship that covered half of tuition in 2008, said Sue Oldham, executive director of recruiting and admissions.

“If you’re offering $500 in scholarships when tuition is $120,000 for two years, that’s a rounding error,” Ms. Oldham said. “The M.B.A. has the power to literally transform a person’s life and career trajectory. We’re serious about making it affordable for students.”

Write to Kelsey Gee at kelsey.gee@wsj.com

Corrections & Amplifications
The scholarship endowment of Dartmouth College’s Tuck School of Business is $87.6 million. An earlier version of this article incorrectly described that fund as the school’s scholarship budget. The article has been changed to clarify that Tuck doesn’t spend the value of its scholarship endowment on financial aid for M.B.A. students each year. Also, Stanford Graduate School of Business is the name of Stanford University’s business school. An earlier photo caption incorrectly called it the Knight Graduate School of Business. (Jan. 5)

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