The MBA Scholarship Wars: An Often Frenzied Pursuit For The Best Students

WITH MORE SCHOOLS REPORTING INCREASES IN APPLICANTS, THE GROWTH IN SCHOLARSHIPS COULD SLOW

With haggling over scholarships on the increase, a risk arises that schools will get fed up with it and draw firmer lines in the sand. Goizueta has deliberately cut back its willingness to negotiate, says admissions dean Barefoot, after a period in which they went back and forth more often with students over scholarships. “It was not fruitful,” Barefoot says. “It was not helpful for us. I always questioned, ‘Why did I do this?’ Someone has come into my office after enrolling, after comparing with a fellow student and told me they got this and the other student got that, and were upset.

“The word got out that we would reevaluate and it becomes a self-fulfilling prophecy.”

As ferocious as the feeding frenzy over MBA students currently is, it arises from cyclical conditions, and the era of productive haggling may be waning, for now. Data from the Graduate Management Admission Council suggest the intense competition for students may cool down as interest in MBA programs rises – applicant numbers at most U.S. full-time, two-year MBA programs rose in 2014. Globally, 61% of full-time, two-year MBA programs reported growth in applications, the first time in five years that a majority of schools reported an increase. And in the past few months, GMAC has noted a slight increase in GMAT test-taking by U.S. citizens, says the company’s vice-president of global communications Rich D’Amato.

The apparent upswing in demand for MBA degrees fits with a historical pattern, in which recession-period job losses and uncertain employment markets propel more people back to school, until the economy improves, the trend reverses, and MBA applications drop, then finally the situation stabilizes, with limited growth. “That’s what we’re beginning to see now,” D’Amato says.

And aggressive pursuit of scholarship money by MBA applicants can be counterproductive, says Ann Richards, financial aid director at Cornell University’s Johnson School of Management. “What I’m starting to see is that money is the deciding factor in which school to attend rather than what is the right school for them,” Richards says. “If you’re choosing a school that isn’t really a good fit for you, because they gave you $10,000 more in scholarship support, over your lifetime that is nothing. If you choose a program that may not challenge you, may not meet your needs, may not give you the same opportunities that you are expecting from your degree program . . . it has cost you more than it has saved you.”

WHY ONE STUDENT TURNED DOWN AN OFFER WORTH $60K MORE TO GO TO MIT SLOAN

MIT Sloan first-year MBA candidate Dana Buchbut made the kind of decision Richards recommends. A medical doctor and reservist in the Israel Defense Forces, Buchbut received scholarship offers from two other top-five schools, one of them totaling $60,000 and higher than what MIT put on the table. But Buchbut was interested in innovation and entrepreneurship, and believed Sloan would do the best job of preparing her for work in health care devices, software. and marketing. “I went with them because I think that that’s the best fit for me,” says Buchbut, 31. Even if MIT had offered her nothing, Buchbut says, “I would go to Sloan anyway.”

Instead of looking for tuition discounts via scholarships, MBA applicants are better off preparing financially by saving money and adjusting in advance to a less expensive student lifestyle, Richards says. “We tell students, ‘Don’t quit your job as soon as you’re admitted – keep working. Don’t take that trip of a lifetime before you start school. You’re can take that trip of a lifetime after you get your signing bonus.’

“The students who are prepared financially are in the best position to choose the program that’s right for them. If students start thinking about this at the same time that they start to think about the application process, it becomes a much less emotional decision.”

For now, however, it’s a multi-million-dollar war for the best and the brightest—and the beneficiaries are the students who have what it takes to get the cash.