MBA costs: How to keep them down!
Updated: Apr 24, 2021
For many, an MBA will be the second-largest cost they incur in their entire lives after buying a house. Most applicants can expect to spend 6-figures, in dollar terms.
Some MBA candidates will borrow whatever it costs and worry about paying it back later, on the basis that they’re targeting lucrative post-MBA roles, perhaps in Finance or Consulting.
But many applicants, taking on such eye-watering amounts of debt doesn’t fit with their chosen career paths. For example, budding entrepreneurs or candidates targeting social impact roles are likely to feel hamstrung by heavy debt.
So how should these candidates think about the cost of their MBA? There are several meaningful steps candidates can take:
Scholarships: If graduating without debt is an important criterion for you then you should consider scholarships seriously. Most schools offer scholarships which can range anywhere between token contributions to a full ride. Fairly standard is 20-40% of tuition fees.
Scholarships are need or merit-based, or a mix of both. Merit-based scholarships tend to be based mostly on GMAT score. Schools looking to boost their average class GMAT score offer scholarships to attract candidates with high GMAT scores.
Means-based scholarships are typically aimed at students with non-traditional backgrounds and are offered by schools to diversify their class profile.
Many schools automatically consider applicants for scholarships. But some scholarships, especially the most prestigious ones, require separate application essays. Be sure to leave enough time to write these essays, on top of the rest of your application.
Internships: These are a great way of immediately paying down the debt-burden of your MBA. There are two types of MBA students: those with paid summer internships, and those pursuing unpaid school-organised consulting projects. Needless to say which choice leaves you lighter in the pocket!
To land a salaried internship, start the application process early (like, within the first couple of months of your first year). Apply to internships which fit with your post-MBA ambitions, however tenuously. Don’t apply to investment banking internships for the money if immediately post-MBA your goal is social impact consulting - much better to target a traditional consulting internship and to pivot from there.
Teaching assistantships: Some schools offer paid teaching assistantships and research positions. These allow students to work 10-20 hours per week concurrently to their MBA. One example is Texas Mccombs School of Business (link here).
Program length: The duration of your MBA is a key factor contributing to the overall cost of your experience. Unsurprisingly, tuition fees of 2-year MBA programs will be around double those of 1-year programs. Traditionally MBA programs in the US tend to be 2-years long while those in Europe 1-year although increasingly this line is blurring, with more so-called ‘Accelerated’ 1-year programs being offered out of the US.
Travel: The possibilities for travel during your MBA program is almost limitless and the cost of these is usually born by students. These include but aren’t limited to case competitions, company visits, location treks, networking trips, and ‘team-building’ vacations.
Decide early in your MBA where to focus your funds in order to keep costs down. This won’t be much of a challenge with so much to discover within a stone’s-throw of your new business school, especially for students moving abroad for business school.
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