Financing Your MBA, Part I
As more and more of you are receiving your admissions results from all your hard work during the MBA application process, we wanted to turn our attention to how you’ll manage financing your MBA.
If you’ve got a spare couple hundred thousand dollars in your bank account, then you can probably skip this series. For everyone else, read on. In this post and a handful to follow, we’ll provide a broad overview of the various costs a typical MBA student faces and the types of funding opportunities currently available. Down the line, we’ll take a closer look at the financial aid processes at a diverse range of leading business schools, giving you the tools you need to assess MBA programs in light of both your own goals and available financing options.
If you’re just beginning to think about an MBA, this series can help map out the landscape, outlining the financial aid process and resources available at various programs. You can extend your research by consulting the Clear Admit School Guides and schools’ own websites, as well as through conversations with current students.
First Things First: What’s an MBA Going to Cost?
The first step in financing the MBA is getting a handle on how much it will cost. The primary expense of an MBA program is tuition. Having said that, there are a variety of other costs—including living expenses, course materials and additional fees—that can increase the total amount a student pays by a half again. Most business schools provide a breakdown of the expenses, which are posted under the financial aid or admissions section of their websites in order to help prospective students seriously consider the cost of completing a particular MBA program. Schools typically take the total cost of attendance into account when calculating the financial aid package students receive.
Tuition
Tuition at the top business programs has risen steadily for decades, often at a rate above inflation. Students can now expect to pay between $50,000 and $75,000 for a single year’s tuition at a top school, with an average total price tag of $130,000 for tuition alone. Public universities, which discount tuition for state residents, can sometimes be more affordable. For instance, in-state residents attending schools such as UT Austin’s McCombs and UNC’s Kenan-Flagler pay about $15,000 less in tuition each year than do out-of-state residents. The range of variance of costs that in-state residents pay can be explained in part by the different levels of subsidies that public universities receive and the economies of the states in which they are located.
Living Costs
The cost of living also forms a substantial part of a student’s expenses while at business school. These costs typically cover housing, food, utilities and other personal expenses, and they can vary widely by geographic region. For example, the Fuqua School of Business, located in the college town of Durham, North Carolina, estimates that students will pay $12,800 for room and board in their first year. Meanwhile, at NYU Stern, located in the center of Manhattan in New York City, the estimated cost for room and board is $25,170.
Living costs are usually based on surveys of the student population or estimates of local rental costs. Students should keep in mind that the figures posted by most schools are for single students with no dependents; those with partners or children should take into account the additional expenses of balancing family life with full-time studies. Harvard Business School, for instance, estimates that students with a spouse or partner should set aside an additional $16,900 in yearly expenses for a spouse or partner, another $13,100 for one child and an additional $8,500 for a second child. Meanwhile, Tuck, with its rural New Hampshire campus, calculates that $7,500 should be set aside for each additional family member. Prospective students with further questions may contact their target programs’ financial aid offices in order to request information about expected family expenses.
Additional Expenses and Fees
Course materials, healthcare insurance, transportation costs and other mandatory university fees can add several thousand dollars to a student’s expenses each year. For example, Wharton’s Pre-term fee is $2,000. Furthermore, extracurricular activities, particularly international trips that are often a highlight of an MBA experience, can substantially increase costs; for example, the Kellogg Worldwide Experience and Service Trips (KWEST) run into the thousands before considering a number of additional out-of-pocket expenses. To help cover these expenses, some schools allow students to apply for an increase to their cost of attendance and thereby take on more loans.
Loan Interest
Because recent legislature has rendered federally subsidized loans unavailable for U.S. citizens or permanent residents in graduate school, students relying on loans to fund their studies will see their interest accumulate while in business school. For the most part, students do not have to start paying that interest, or the principle, until several months after they graduate. Federal loans and some private loans also include an ordination fee that is tacked on to each loan disbursement. We’ll go into greater detail on loans in a later post in this series.
Stay tuned for future posts in this series, where we’ll take a closer look at the range of financing options available to MBA students—including school-based financial aid, private scholarships and loan programs—as well as specific resources for international students.
Inside the Career Treks at McCombs
An MBA program that spends all of its time and effort only in the classroom is one that may leave its students at a disadvantage. The truth is that it’s the hands-on and out-of-class experiences that make the biggest impression on MBAs, and that’s exactly why McCombs School of Business at the University of Texas at Austin takes their MBA students on career treks every year.
These treks, led by the Texas MBA Career and Management team, take MBAs to various cities and companies around the nation for a unique learning opportunity. During each trek, MBA students learn more in-depth information about their favorite industries and corporations through presentations, Q&A sessions and networking opportunities. And so far, the treks have been a huge success. Continue reading…
Business School to Break Into Tech?
Career changes are inevitable in this topsy-turvy economy, but how can business school graduates parlay their expertise into a lucrative and potentially high-impact career in the tech industry, which largely sources talent with more technical backgrounds?
MBATube Killed the SEO Star
It feels positively Philip K. Dick-esque to think that from the mid-20th century until roughly 5-10 years into the new millennium, moving images delivered across cathode ray televisions were the medium de rigeur to communicate information to a large audience.
McCombs to Honor Corporate Partnerships
To a business school, corporate partnerships are an important part of any MBA program. The partnership offer opportunities to students that wouldn’t be available otherwise– access to executives, insider perspectives and, of course, networking opportunities. Continue reading…
Faculty at McCombs Receive Honors for Teaching Excellence
Students aren’t the only ones who strive to make the honor roll. At University of Texas at Austin’s McCombs School of Business, 11 business faculty members were honored for their achievements in teaching. Continue reading…
