Harvard Business School, already the world’s most generous school in helping its MBAs with their tuition bills, increased fellowship support last year another 12% to an average of $29,843 per student, up from $26,745 a year earlier.
Only five years ago, in 2007, the average fellowship aid per student at Harvard was $17,605 a year. That’s a nearly 70% increase in student support since 2007, making it increasingly difficult for other B-schools to lure and essentially buy the best MBA talent on the market.
Put another way, Harvard discounted its then annual $51,200 tuition by an average of 58.3% last year, up from 54.7% a year earlier and 44.5% five years ago. Of course, these are average numbers. So some students pay full freight; others go for free. Many get a discount off the full cost of tuition. The school says that half of its MBA candidates, roughly 900 students, receive a need-based fellowship award. Annual tuition at Harvard also has now risen to $53,500.
Over the past five fiscal years, the school’s average two-year MBA fellowship award has grown from $36,908 for the HBS Class of 2008 to $59,000 for the Class of 2013, according to Richard P. Melnick, chief financial officer of the Harvard Business School.
HARVARD SPENT MORE THAN $27 MILLION ON MBA FELLOWSHIP SUPPORT LAST YEAR
All told, Harvard spent an unprecedented $27 million in MBA fellowship support last year, up from $26 million in 2011. Including fellowship spending for doctoral and executive education programs brings the total spent last year to $37 million, up one million from $36 million in fiscal 2011.
The numbers are disclosed in Harvard Business School’s just released 2012 annual report.
Stanford University’s Graduate School of Business, Harvard’s biggest domestic rival, is not far behind in discounting the sticker price of its MBA program. The school says its average fellowship grant last year to MBA candidates was $24,708, up from $23,683 in 2011. This academic year some 427 MBA students at Stanford are receiving some form of scholarship money from the $12.8 million in institutional funding the school has set aside for MBA candidates.
The pressure Harvard is placing on other prominent schools who are losing some of their best applicants to HBS due to the lure of a deeply discounted education is not likely to let up. The business school is currently in the midst of a quiet fund raising campaign that seeks to raise an unprecedented $850 million to $1 billion, a chunk of which will go to students in the form of more fellowship money.
Harvard justifies its generosity this way: “The prospect of joining the workforce with high levels of education debt can deter strong MBA candidates from applying to HBS and restrict their career choices upon graduation,” according to the annual report. “This is particularly true for younger students, those from outside the United States, and students whose early career paths have not enabled them to reduce their undergraduate loans. Consequently, one of the School’s longstanding goals is to assist students in minimizing minimizing their debt at graduation by ensuring that fellowship support at least keeps pace with tuition and fees.”
HARVARD SAID IT COST $8 MILLION TO DELIVER A NEW YEARLONG COURSE IN THE MBA CURRICULUM
Harvard alsol disclosed that it spent $8 million to launch its new MBA curriculum last year, according to its just released annual report. The money went to support FIELD, the new yearlong course in the MBA required curriculum.
“Supporting the FIELD modules on campus and globally added $8 million to the cost of delivering MBA education at HBS during the year,” the report said. “These incremental expenses included, among others, international travel costs for students and seed funding for student-launched businesses, as well as the cost of expanding the I.T. platform to support FIELD exercises.”