TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, January 9, 2018

WSJ: Even Elite Business Schools Discount MBA Degrees By 50% Or More

MBA 2Wall Street Journal, An M.B.A. Is Cheaper Than You Think, As Schools Beef Up Aid Packages:

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.

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. ...

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. ...

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.

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