One of the nagging questions that befuddles many a prospective MBA is how will they pay for the degree? The Graduate Management Admission Council just surveyed thousands of would-be students to ask them how they intend to pay for a graduate business degree.
Here’s what they said. “Although financial issues remain the most pervasive reservation expressed by prospective business school students, such reservations have declined slightly over the past few years,” according to the group’s 2015 Prospective Student survey. In 2010, half (51%) of prospective students said a graduate management education required more money than they had available compared with 48 percent in 2014.
The same five-year period saw an even greater decrease in student reservations about taking on a large financial debt (44% of prospective students in 2014, down from 49% in 2010). One big change in the past five years: An increasing amount of support is coming from parents (see below). Mommy and daddy are expected to provide 22% of the costs of a business education today, up from just 15% five years ago. Prospective students seem more reluctant to take out loans for their study, perhaps a result of all the horror stories on graduates with great loan burdens.
Expected Financial Mix, by Survey Years 2010 and 2014
GMAC said that growth in parental support is driven by the younger and more mobile cohort of prospective students. Domestic students, meantime, report an increase in reliance on personal savings and less on loans (see below).
The findings are based on the responses of nearly 12,000 potential graduate business students. These students, who registered on GMAC’s website in 2014, were part of a random sample collected monthly.
Expected Financial Mix, by Age and Student Mobility Preference