One might say that you cannot put a price on knowledge, but MBA grads know that is not entirely true. Business schools can be seen as a feeder system, connecting potential managers, marketers, and executives with organizations on the lookout for the crème de la crème of graduating classes.
This month’s release of The MBA Guidebook explores how the cost of an MBA degree can vary, knowing that the average tuition for a two-year MBA program exceeds $60,000. If you attend one of the top business schools, you can expect to pay as much as $100,000 or more in tuition and fees.
An MBA is often seen as an investment in your future, so it’s no surprise students shell out tens of thousands for the privilege.
Although costly, there’s a number of reasons why an MBA works for some: it’s widely recognized, there’s better earning potential, you can expand networking resources, it’s open for all, you can start your own venture, and learn and choose specializations to fit your needs.
MBA expenses: What to watch out for
Of course, it’s not just the MBA program that has students shelling out their hard-earned cash, there are other expenses too.
Before starting the course there will be some pre-MBA expenses, including taking the TOEFL (originally known as the Test of English as a Foreign Language). The TOEFL is a standardized test that measures a test-taker’s understanding of the English language to see if they’re good enough to take a course at university/graduate school in English-speaking countries.
The TOEFL costs around $170, but there may be other charges including, $35 for late registration and $20 to reinstate a cancelled score.
Whether you need to take the TOEFL or not, everyone will need to take the GMAT (or GRE) exam which measures higher-order reasoning skills; these reasoning skills involve complex judgments, critical thinking, analysis, and problem-solving. The cost to take the GMAT exam is $250 globally.
Application fees are one of the highest sources of revenue for business schools; applicants can expect to pay anything from $100 to $275 per application to each business school.
Top MBA programs like Harvard and Stanford are said to receive anything from eight to 10,000 MBA applications each year for roughly 1,800 slots. Stanford Graduate School of Business has the highest application fee of the top US business schools at $275, which means the business school could make over $2.2 million if more than 8,000 applicants apply.
MBA costs in Europe, India & the USA
Depending on where in the world you choose to study your MBA, the cost of the program may vary.
For example, tuition at the top business schools in the US is over US$120,000: Harvard Business School (24-month program); Stanford (24 months); The Wharton School (21 months).
Other b-schools in the US will be slightly cheaper, including Kelley School of Business which costs around $51,182 for Indiana residents or $74,084 for non-residents/international students per year. Tuck School of Business’ MBA (21 months) is around US$70,000-$80,000.
Some North American programs have one-year and two-year tracks, but most students opt for the longer version, which lasts on average 21 months.
By comparison, Europe’s plentiful MBA courses may offer more value for money thanks to the course length. Typically, full MBA courses in Europe are around one-year, even 10 months at QS’ highest-ranked European MBA program INSEAD. However, INSEAD’s accelerated 10-month MBA program still costs between US$100,000-$110,000, so it’s hardly cheap.
In India, the cost of acquiring an MBA degree is comparatively less than overseas. Several Indian institutions boast collaborations with international universities, allowing MBA students to earn a high-quality education at home.
The Indian Institute of Management (IIM) in Ahmedabad is ranked seventh in the QS Global MBA Rankings 2018: Asia, Australia & New Zealand. The 22-month program costs between US$20,000 and $30,000, with an average salary three months after graduation of US$44,457.
Similarly, the Indian Institute of Management (IIM) in Bangalore ranks ninth in the Asia-Pacific region. This 22-month program costs slightly more at US$30,000-$40,000 with an average salary after three months of US$36,660.
It’s worth noting that Indian business schools are more open to potential students with little to no work experience than most US universities, which prefer candidates with a minimum of two to three years of work experience. However, full-time Indian Executive Management programs (e.g., PGPX / PGPM) at top schools accept only candidates with substantial work experience.
How to make your MBA pocket friendly
A full-time program at one of the top b-schools will set a student back just under US$200,000 on average. This large sum includes tuition, accommodation and day-to-day costs totalling $112,000, and an opportunity cost of $106,000.
The price tag may seem daunting, but help is available for students if needed. Financial assistance for MBA students comes in many shapes and sizes, but one of the most common forms are sponsorships. These are usually paid for by your employer. Scholarships and grants are also available via the school.
More than half of MBA students receive financial help. To find out more on how to fund your MBA, you can read our ‘10 Financial Aid Tips for MBAs’ story.
Executive and online options
If a student decides to study an executive MBA, usually their employer pays most, if not all, tuition costs. This can benefit a student greatly as, not only is someone else covering your tuition, but you’ll also receive a full salary.
However, most companies require a few years’ commitment after you finish your program, so you need to be sure you’re happy to commit to sticking at your workplace a little while longer.
The average cost of a top-ranking online MBA is approximately US$39,000, among the 40 programs listed in the QS Distance Online MBA Rankings 2017. As one might expect, some programs cost more than others, and this often relates to the country or market in which they are offered.
Prospective students are often left to decide whether a low-cost option is of overriding importance or whether a substantial price would reassure them about the quality of a program.
The online program offered by India’s Amity Directorate of Distance and Online Education was the cheapest among the prices listed in the 2017 rankings at US$5,000. A further nine were priced at US$25,000 or less, including the programs available at Aberdeen Business School, Robert Gordon University in the UK and the University of Wisconsin MBA Consortium in the US, which operates under a partnership of four schools within the University of Wisconsin System.
There were 10 programs priced over US$50,000 (accurate to the time at which the data for the rankings was taken) all of which are offered by schools based in the US. The most expensive program of all is offered by the George Washington University School of Business. There, total tuition is over US$90,000 and isn’t far off the cost of its full-time, on-campus degree in Washington DC.
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