How to cut the cost of an MBA

The benefits of an MBA – Master of Business Administration – degree are extensive and long-lasting. An MBA is a prestigious qualification that can lead to myriad opportunities with desirable employers, many of which recruit directly from business school.

CEOs from a range of top companies, including Amazon, Apple, Google, Coca-Cola, and JP Morgan, are MBA graduates. And if you’re looking for a career change, an MBA is an efficient way to make the switch – giving you the potential of a salary bump and landing a coveted job. 

That said, the high fees contributing to the cost of an MBA can be a challenge and a significant investment. Added to this, the soaring global cost of living – from gasoline to housing – is making covering MBA school fees harder than ever.

The cost of living crisis has significantly impacted business schools: the Financial Times' top 20 MBA colleges have raised their tuition fees by 6.3% from 2021, as seen in the BusinessBecause Cost of MBA of Report 2022. 

Despite this, if you’re hoping to undertake the world-renowned accreditation, there are several opportunities to reduce costs during an MBA program.

Choose your region wisely

Where in the world you decide to study for an MBA will be a major factor in working out the cost. 

The US is the most expensive place to enroll in a full-time MBA, because of its cost of living, the healthcare fees required, and the typical two-year length of the program. For international students who have travel fees on top of other expenses, costs are even higher.

As seen in the BusinessBecause 2022 Cost of MBA Report, the top-ranked US full time MBA programs raised their tuition fees by an average of 2.9% compared with 2021, to cost an average of $155,305.

Tuition, plus other costs and the rising cost of living, has seen the average total cost of a top US full-time MBA rise by 2.8% since 2021 – from $217,000 to $225,000. This contrasts the average costs of Europe and Asia – $121,583 and $104,881.

The most expensive full-time MBAs in the world

In addition to US MBAs usually taking two years, rather than one, students moving to the States for business school at top MBA colleges also have to contend with high living costs and the added expense of health insurance.

School	Tuition (US$)	Total Cost of MBA (US$)
NYU Stern (US)	164,652	246,506
MIT Sloan (US)	160,800	239,990
Wharton (US)	165,748	237,136
UC Berkley Haas (US)	152,214	234,352
Stanford (US)	153,900	231,606
Columbia (US)	160,944	230,408
Dartmouth College: Tuck (US)	155,040	229,650
Harvard (US)	146,880	225,528
Chicago: Booth (US)	155,682	224,849
Northwestern: Kellogg (US)	152,000	218,220

 

While the US's MBA programs are highly priced, there are ways to make studying in the US more affordable. For example, choosing your study region carefully can lower the costs. California, for example, is one of the most expensive states in the US in which to live and pursue an MBA, with Stanford MBA students paying an estimated $72,396 in living over two years. 

Cities such as New York also have a high cost of living, whereas by choosing wisely, there are more affordable study locations for MBA programs. In Durham North Carolina, students at Duke Fuqua pay the lowest living costs of any US-based university in the top 20 MBA ranking. In-state students often pay lower tuition, so if you are a US student, taking your MBA in your home state will likely save you some bucks.

However, for US students looking to study abroad, the strength of the dollar has meant the MBA fees have dropped at top universities in many European and Asian countries. For students from outside the States, US fees have soared.

Opt for a shorter MBA to cut costs

Another trick for lowering MBA costs is to take a shorter, 12-month MBA degrees. Outside of the US, top MBAs generally take less time to complete. Year-long MBAs are far more affordable than those taking two years – although large cities such as London and Paris can nonetheless be extremely pricey to live even if for a year.

Look beyond the large European cities, however, you can find top MBA universities with low fees. The UK is home to several top business schools outside of London, such as Warwick business School, where accommodation, food, and drink fees will be lower.

One top tip to cut the cost of an MBA is to carefully examine the fee structure to check out exactly what is mandatory and what is optional. For example, some trips or sessions may be optional.

Consider India: a top choice for lower cost MBAs 

India is home to top business schools with MBA programs with low fees compared to the US.

Tuition at top MBA colleges in India:

• India School of Business costs $46,436
• IIM Ahmedabad costs $28,837
• IIM Bangalore costs $35,950 
• SP Jain Institute of Management and Research costs $20,828
• FMS Delhi University costs $2,411

Indian government colleges, such as Faculty of Management Studies (FMS) Delhi, have low fees compared with privately owned universities, and the living costs in India are also significantly cheaper than the US or Europe. All these numbers indicate how much more cost-effective it is to pursue an MBA in India.

Despite their low fees, Indian MBA colleges boast top recruiters from companies such as consulting and finance firms as well as Fast-Moving Consumer Goods (FMCG) companies such as AB InBev, Hindustan Unilever, P&G and Coca-Cola.

Consider a modular or part-time MBA  

One way to lower the cost of an MBA is for business school students to consider studying while working. Part-time MBA courses allow mid-career professionals to advance their network, gain technical, management skills and accelerate their career goals. The flexible format is beneficial for those looking to save money by earning money while advancing their career opportunities.

There are several top part-time MBAs which provide first-rate management education.

Top part-time MBA colleges according to US News (per credit cost):

1. Chicago Booth: $7,492
2. Berkley Haas: $3,533
3. Northwestern Kellogg: $7,418
4. NYU Stern: $2,434
5. UC Anderson: $1,640

The per-credit system means students can save money by picking and choosing the credits most beneficial to their career progression, rather than paying a lump sum for a full-MBA.

Explore online or hybrid options

Since the Coronavirus pandemic, online and hybrid study options have become more widely available from MBA colleges around the world.

While full-time MBA program tuition rates are high, even before adding living, healthcare (for US universities), and travel fees with online and hybrid options those fees are brought way down and living and travel fees are either non-existent or significantly lower.

The GMAC prospective students survey showed that globally, 20% of candidates surveyed in 2021 prefer a hybrid program format, up from 14% pre-pandemic.

Best Online MBAs, according to Financial Times:

School	Location	Average Tuition/fees (US$)
Warwick Business School	UK	40,420
Imperial College Business School	UK	47,693
IE Business School	Spain	49,544
North Carolina: Kenan-Flagler	US	125,589
University of Florida: Warrington	US	55,647
Poletcnico di Milano School of Management	Italy	36,663
Durham University Business School	UK	27,684
AGSM at UNSW Business School	Australia	40,299
University of Nebraska-Lincoln	US	31,200
University of Bradford School of Management	UK	21,634

 

Find out how to access scholarship options

Financial support from top business schools can cover a significant chunk of the total MBA cost, and scholarships or bursaries are more accessible than you might think. Some top MBA colleges cover 100% of tuition fees for eligible students. Around 50% of students at Harvard Business School receive need-based assistance, and INSEAD offers more than 90 scholarships.

There are four types of MBA scholarships: merit-based, need-based, diversity, and career specific. By thoroughly researching all possible scholarship options at your desired b schools, you have the best chance of lowering your fees.

"For institutional scholarships, you will want to familiarize yourself with the MBA application requirements at each institution where you intend to apply, and plan your application timeline to account for any special scholarships that require additional essays or application materials," says Melody Jones, Vantage Point MBA Consulting.

Once you've done all your research, the earlier you apply the better your chances of receiving an MBA scholarship.

“Early in the application process cycle, the scholarship budget hasn’t been exhausted yet. Applying in round one would be a very smart decision,” explains Petia Whitmore, founder of My MBA Path.

Reach out to business schools for advice

While a b school's site will hold a fair amount of information, it is a good idea to reach out to your target school's admissions office directly as many schools will offer insider tips to acing the scholarship process.

It is also a good idea to make contact with students or alums of the b school.

"Candidates can also reach out to students/alums to know more about their experience and points to look out for while applying for scholarships. This will help candidates to have clarity on the bouquet of scholarships on offer and apply to the ones suitable to their profile," says  Dibyendu Bose, Senior Director-Admissions & Financial AID at Indian School of Business (ISB). 

Score high on your GMAT/NMAT

The high MBA cost means that business schools have numerous scholarship opportunities based both on need and merit. Alongside a sparkling academic record and extracurricular activities, pre-MBA exams are critical when applying for merit-based scholarships and accessing financial assistance. 

Scoring high on the GMAT can help you stand out from the crowds at top business schools and exemplify your dedication to an MBA degree and your awareness of its demands.

GMAT scores range from 200-800. A score above 600 will put your application in good stead at top colleges while a score of 700 and above will make a student a competitive candidate at business schools around the world.

The Financial Times' top MBA college in its 2022 ranking was Wharton, whose most recently admitted class had scores ranging from 530-790. INSEAD had an average GMAT score of 708, and Harvard Business School accepted scores ranging from 590-790, with a median GMAT score of 730. To have a chance of getting financial assistance at those and other top MBA colleges, you should aim for a minimum score of 700 on your GMAT.

Still, for merit-based scholarships business schools review a candidate's profile holistically, so an MBA college will look beyond simply your score. INSEAD university combines merit and financial need criteria for its scholarships.

“Merit scholarships focus on different attributes, such as professional achievements, leadership experience, past academic successes, and economic or community involvement in a particular country," says Irina Schneider-Maunoury, senior associate director of financial aid at INSEAD.

Look at reducing your personal costs

Finally, to reduce your MBA cost, find ways to limit spend in your personal life during your time as a student.

For starters, if you're looking to live abroad or far away from home for your MBA college, search and secure your b school accommodation early. One of the biggest expenses during an MBA is living costs, and affordable accommodation near campus gets snapped up quickly.

You could also consider sharing a house or apartment with other members of your MBA class to lower the cost, or live a little further from campus. While you may have to spend a little more on travel, accommodation further away from the b school might be cheaper.

You can also reduce the personal costs of an MBA degree by buying second hand books and study materials. When you're stocking up on the essentials for b school, try to avoid buying brand new items. Look for second hand book shops near you which sell books on management, business, and finance, and for groups where alums or graduates will be selling their old text books.

If you need to upgrade your computer or laptop prior to starting management studies, going pre-used is also a savvy option. Many manufacturers, including Apple, sell refurbished products that work perfectly but cost a fraction of their original price.

Remember to focus on ROI

Given the overall MBA cost, finding ways to save money is important. It can mitigate any financial difficulties after graduation.

However, it is important to remember that despite the fees, especially at top colleges, an MBA from a top college or university offers an incredible set of skills and a platform for your future career in a desirable company – not forgetting a likely salary bump. So while it can feel like you are spending a lot of money throughout your management studies at university, try to focus on the returns that this significant investment will bring upon graduation.

Try our MBA Return on Investment Calculator