In our culture of “busy,” there’s always room to put more on your plate, right? Why don’t you add to the chaos of a full-time job, a family, household responsibilities, work travel, any sliver of a personal life, and a daily commute by throwing in an MBA program? And by the way, you’ll need to pay for it too.
How to pay for an online MBA: The value of shopping aroundBY Nicole Gull McElroyApril 24, 2021, 10:27 AM
Top universities across the country have offered MBA programs completely online for years, including the University of North Carolina at Chapel Hill, Arizona State, the University of Michigan, Babson College, and many others. In 2021, Virginia Tech and Boston University both announced new online programs. For working adults pursuing advanced degrees, research teams at EdAssist found that while the total dollar amount spent on MBA programs in 2019–2020 didn’t change, the way students were spending their education dollars did, favoring online programs.
The offerings and related tuition among these programs vary dramatically, though, and due diligence is key. Boston University’s new program will cost about $24,000 in total while students will pay $140,000 at Carnegie Mellon’s Tepper School of Business. Mid-range programs cost around $60,000, like the W.P. Carey School of Business at Arizona State University.
Just as the tuition range is wide, so too can be the offerings. From international immersions to on-campus weekends, schools are competing for students who want a top-notch education but also flexibility while working and raising children.
Balancing what you’re willing to pay versus what you want out of the degree is an entirely personal endeavor. Maybe you’re seeking the contacts you’ll make through an elite network of a top school to move your career to the next level or change industries. Or perhaps having a solid school’s brand on your résumé at a mid-range price point does the job to keep you moving in the right direction. Sorting through that decision process boils down to why you’re pursuing the degree to begin with, and what resources you can lean on to cover the cost.
The DIY route: Self-funding your MBA
The most direct way to pay for your degree (outside of loans) is to write checks as you go. Given that a lot of schools allow several years to complete coursework while working full-time, that’s certainly an option.
Graduate students represent only 15% of students in higher education, but they account for 40% of federal student loans issued every year, according to numbers released by the Center for American Progress in 2020. The majority of grad students don’t self-fund their degrees, though it’s possible, especially if you aren’t in a rush to finish and can tap into other programs or benefits offered by the company you work for—or qualify for a relatively limited number of scholarships and grants.
Employer help: Tuition reimbursement
If you’re lucky enough to have workplace benefits that cover education costs, it is worth the time exploring how to tap into them. As of 2019, 63% of companies surveyed offered formal tuition reimbursement, according to the International Foundation of Employee Benefits Plans. Another 4% of companies said they offer employees help repaying their loans, and 23% said that while they don’t currently offer programs to cover or assist in paying for school, they’re considering it.
To pay for his MBA degree, Brian Loftus, who lives in the Philadelphia area, split some of the cost with his employer. While taking classes through the hybrid online program at Lehigh University, Loftus was working in accounting for Merck, which has a relationship with the school. The company offered tuition reimbursement up to $5,250 per year (tax-free, as allowed by U.S. tax code) to offset the cost for its employees. Loftus says his total out-of-pocket cost was about $7,000.
“The reimbursement covered a significant portion of two courses in the Lehigh MBA program,” says Loftus. “To take full advantage, I typically would enroll in only one course in the fall and one course in the spring. While this plan extended a two-year program to almost five years, the financial benefit outweighed the additional time. Also, with a full-time job and a young family, one course per semester fit my schedule well.”
Apply for loans and scholarships
Student loans will get the job done, but of course it’s on you to pay them back. The most recent data from the National Center on Education Statistics shows the average master’s level grad finishes with roughly $66,000 of debt. The Federal Reserve reports that U.S. student-loan debt as a whole now teeters around $1.7 trillion.
The question becomes, Can you earn enough to justify the debt, and will your post-MBA path be fueled or foiled by looming debt? That decision is personal and not always easy to answer without a clear objective.
Scholarships can also weigh into the equation. And a lot of schools use them as a way to market to, and attract, students, notes Caryn Beck-Dudley, CEO at AACSB, an international business education alliance that accredits schools and advocates for business education. But it’s important to note that scholarships usually amount to a few thousand dollars, not tens of thousands, she adds.
Virginia Tech encourages incoming students to apply for the scholarships it offers, but that money won’t cover the cost of the entire degree, according to Dana Hansson, director of MBA programs at the university. Endowments weigh heavily into the scholarship offerings at any school, and many of the richest (Harvard, Stanford, Dartmouth, Michigan, Syracuse, and others have long ranked in top endowment lists) can attract some very competitive students.
Beck-Dudley also points out that being a veteran or member of the military is helpful for reducing the cost of an MBA. “The military is one of the few that covers all of the cost,” she says. “Also, going online works because military professionals don’t know when or where they’ll be deployed. It’s hard to transfer to and from programs.”
The flexibility and cost structure of any given program are major selling points and highly marketable to any working student, but especially to students with military reimbursement. And, conversely, the schools like that there’s no ambiguity on the ability to cover the cost of a degree.
Buyer beware: Program extras
Business schools are intensely competing for students. Some online programs are technically hybrid, meaning you can head to class if you live nearby and want to, or you can take all of your classes online. Others are fully online but offer one or two extended weekends in person, international immersion trips, or other added experiences to wow prospective graduates and enrich the curriculum.
Depending on the MBA program, those additional experiences may or may not be included in tuition, says Beck-Dudley. So it’s important to ask about those costs upfront, she adds.
And, not surprisingly, international trips can be expensive. Hofstra University’s Global Practicum sends students for weeklong visits to companies in Thailand, China, South Africa, or the Middle East at a cost of roughly $5,000. Students at the University of Florida have used the global immersion program to spend seven to 10 days in Ireland, United Arab Emirates, Argentina, Brazil, and China—and the cost for each is a $2,700 program fee, plus tuition for two credits, flights, and spending money.
How you decide to pay for your MBA is bound by your comfort level with debt, your ability to pay for some or all of it, and any employer benefits or scholarships you might be able to leverage along the way. The balance requires both flexibility and creativity, and ultimately needs to align with the reason you want the degree to begin with.