Benjamin Franklin said, “An investment in knowledge pays the best interest.” This quote rings true for thousands of applicants who apply to top business schools every year despite their exorbitant MBA cost. Applicants see value in these top MBA programs because they train them to become the finest managers and connect them to organizations looking for talented individuals. In the process, the students get the opportunity to increase their earning potential as well as their network.
So, how much does an MBA cost? In this article, we’ll answer this question and explore other questions like:
- What are the factors to consider while calculating the full cost of attending an MBA program?
- Which business schools are the most expensive? Includes MBA cost comparison by business schools.
- What are the different finance options? Learn more about Crowdfunding in this section.
- How to reduce MBA cost?
- Tips for a pocket-friendly MBA
How much does an MBA cost?
The average cost of an MBA from a top business school can range between $160,000 and $240,000. However, there are some additional costs that you need to look out for. There are 3 types of MBA costs:
- Pre-MBA costs
- Tuition cost of an MBA program
- Living costs during MBA
Once you decide that you want to pursue an MBA, you need to prepare an impressive application. You incur some cost during this process:
GMAT – Taking the GMAT is more than just its registration fee of $250. If you don’t retake the GMAT, even then you will incur a minimum cost of $730. Take a look at this article to understand how we arrived at this cost.
TOEFL/ IELTS – All business schools ask for a TOEFL/ IELTS score from non-native English speakers. If you are a non-native speaker you will have to take the TOEFL or the IELTS. For this, you’ll have to shell out another $ 170.
Application Fee – This is the biggest pre-MBA cost for an applicant. An MBA candidate typically applies to 8 to 10 business schools and business schools charge anywhere between $150 and $275 per application. So, you would have to pay business schools another $2,000 to $2,500.
Stanford GSB made around $2.2 million from more than 8000 applications last year.
Your total pre-MBA costs would add up to a minimum of $3,000.
Tuition Cost of an MBA Program
Wharton School of business charges the highest tuition fee of $157,896 for its 2-year full-time MBA program whereas Foster school of business charges the lowest tuition fee of $96,666 in the US.
|Total MBA Cost of Top Business Schools 2019|
|Business School||Tuition Fee||Living Expenses||Full MBA Cost|
|Stanford GSB||$ 141,180||$ 90,414||$ 231,594|
|NYU (Stern)||$ 143,352||$ 82,980||$ 226,332|
|Penn (Wharton)||$ 157,896||$ 65,904||$ 223,800|
|MIT (Sloan)||$ 148,400||$ 74,740||$ 223,140|
|Columbia Business School||$ 148,800||$ 73,156||$ 221,956|
|Harvard Business School||$ 146,880||$ 71,368||$ 218,248|
|Chicago (Booth)||$ 144,000||$ 73,366||$ 217,366|
|Dartmouth (Tuck)||$ 144,300||$ 70,100||$ 214,400|
|Northwestern (Kellogg)||$ 143,108||$ 63,592||$ 206,700|
|UCLA (Anderson)||$ 119,732||$ 77,666||$ 197,398|
|Yale SOM||$ 143,240||$ 51,090||$ 194,330|
|UC-Berkeley (Haas)||$ 123,012||$ 70,056||$ 193,068|
|Virginia (Darden)||$ 137,020||$ 55,532||$ 192,552|
|Duke (Fuqua)||$ 136,400||$ 52,370||$ 188,770|
|Georgetown (McDonough)||$ 117,000||$ 69,040||$ 186,040|
|Michigan (Ross)||$ 137,292||$ 48,376||$ 185,668|
|Cornell (Johnson)||$ 132,580||$ 51,800||$ 184,380|
|CMU (Tepper)||$ 132,000||$ 46,756||$ 178,756|
|UNC (Kenan-Flagler)||$ 128,364||$ 50,076||$ 178,440|
|Emory (Goizueta)||$ 128,256||$ 49,414||$ 177,670|
|Rice (Jones)||$ 116,000||$ 60,848||$ 176,848|
|Washington (Foster)||$ 96,666||$ 60,492||$ 157,158|
|Texas-Austin (McCombs)||$ 109,848||$ 40,440||$ 150,288|
|Indiana (Kelley)||$ 99,910||$ 48,258||$ 148,168|
|IMD (1 year)||$ 85,000||$ 36,000||$ 121,000|
|INSEAD (10 months)||$ 95,890||$ 23,833||$ 119,723|
Living Costs during MBA
As you can see in the table above while pursuing your MBA degree, you will have to incur additional MBA cost on living expenses which include:
- Rent and Utilities
- Books and Supplies
- Health Insurance
- Miscellaneous expenses
These living expenses will depend on the following factors:
- The location of the business school
- You stay alone, or you share the apartment
- You are married (staying with family) or single
- You live on-campus or off-campus
- Your lifestyle
In the above table, we have computed the total MBA cost by adding the living expenses you will incur during your stay. These expenses are for a single person sharing an apartment with one person and having a modest lifestyle. However, if you are staying with your family, then you’ll have to increase the MBA cost by 25% to 30%.
You can see that for 9 business schools you’ll have to shell out more than $200,000 to earn the MBA degree.
Living expenses are highest for Stanford GSB and NYU Stern as both these business schools are situated in expensive cities. McCombs School has the lowest living expenses as it is situated in Austin which is a less expensive city to live in.
According to Numbeo, the cost of living per month for a single person for New York, Stanford, and Houston is as follows:
|Cost of living per month – MBA Cost|
Moreover, when it comes to rank according to cost of living, New York is 11th, Stanford is 45th, and Houston is 179th. Therefore, to make your MBA cost affordable, the location of your business school will play an important role.
How to make your MBA cost affordable
The best way to make your MBA costs affordable is to get a scholarship. All the top business schools provide numerous fellowships and scholarships. The best way to get a scholarship is to score high on the GMAT. A high GMAT score increases the chance of getting a scholarship.
Read this article on How to get a scholarship to know more about the various scholarships offered by business schools and what is a good GMAT score to get a scholarship.
“A high GMAT score helped me get an admit from Kellogg as well as scholarships”, says Prawee who scored 740 on the GMAT and received scholarships worth $180,000 from 4 business schools.
According to GMAC Application trends survey report 2017, 45% of the incoming class received some kind of financial assistance from the business school. 24% of the financial assistance is in the form of merit scholarships. However, business schools offer other types of financial assistance like
- Need-based scholarships
- Stipends, and
Crowdfunding is an innovative alternative to finance your MBA. Although, it is not the same as scholarships because you have to pay back the amount. But, the best part is you are provided with collateral-free and low-interest education loans, as low as 5% – 6% depending on specific credit assessment criteria for each applicant.
Jayanth Kashyap B is one such person who raised GBP 50,000 through crowdfunding platforms to fund his MBA from Säid Business School (Oxford University). You can read his inspiring story on how he raised this money
Prodigy Finance and CommonBond are two such companies who will fund your MBA through a community platform consisting of MBA alumni, institutional investors, and qualified private investors. Also, you do not need to pay the student loan back until six months after graduation. They also offer scholarships to its borrowers. You can log on to their websites to know your eligibility for a student loan.
The allure of employer sponsorship has reduced in recent years but there is no harm in asking your boss if your organization wants to invest in your education. However, you should keep in mind that your organization may put their conditions before sponsoring your education. So, make sure that you understand all those terms and conditions.
The Mom and Pop Bank
According to GMAC Prospective Students Survey Report 2017, close to 20% of the students receive financial support from their parents. This trend is most prevalent in Asia and Europe where 33% and 30% of business school students received financial support from their families. 10% of American students received financial help from their mom and dad.
So, in case you need some financial assistance, your parents would most probably invest in your future.
Research the MBA cost and financing options
MBA costs are high and therefore, before selecting a business school you should consider the following things:
Career goals – Investment in your MBA degree is hefty and you would want to make the most out of your stay at the business school you choose. So, choose the business school which could accelerate your career trajectory and gives you a high Return on Investment.
Explore the real MBA cost – Do your own research and talk to a few current students of the business school which you wish to attend. Get a real idea on how much does it actually cost to do an MBA.
Financing your MBA – The best way to finance for an MBA is from your own savings. However, they might not be enough. Therefore, apply for scholarships, ask your parents/ spouse and even then, you fall short, apply for a student loan. If you plan to continue to work in your current organization after your MBA, then contact your HR department and inquire if the company has such a policy.
Still, the best option for you is to get an MBA Scholarship. The best way to get one is by scoring high on the GMAT.
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