Harvard Boosts MBA Support To $33 Million

Harvard Business school Dean’s residence - Ethan Baron photo

Harvard Business school Dean’s residence – Ethan Baron photo

Harvard Business School continues to pour more and more cash into MBA scholarships, increasing the average fellowship grant to MBA students by 3.8% last year to a record $32,919. That unprecedented level of financial support translated into 55.9% of the annual tuition of $58,878 last year. Even so, it was slightly under the average fellowship at Stanford Graduate School of Business which is now spending $35,343 per student.

All told, Harvard spent $33 million in fellowship aid for MBAs, up from $31 million a year earlier. The total fellowship support number, including doctoral and executive education students, came to a record $44 million last year. Only five years ago, Harvard spent $26 million on MBA fellowships and the average annual grant was just $26,745, some $6,200 less than last year (see table below). Approximately half of the school’s MBA students currently receive fellowships.

No less surprising, though, is the school’s commitment to further increases this year. Harvard said it expects MBA tuition and fees to increase by about 4% but that the school will offset the rise by a 9% increase in financial aid in 2016, primarily earmarked for MBA fellowships. That would bring the yearly total to a new record of nearly $48 million. “The school is committed to consistently increasing student financial assistance from year to year, independent of income received from endowed fellowship funds,” wrote Richard Melnick, chief financial officer of Harvard Business School, in the school’s 2015 financial report.


The school also said that its admissions yield–the percentage of admitted applicants who enroll as students–rose two full percentage points last year to 91%. Only rival Stanford University Graduate School of Business comes close, with an estimated yield of 79%. Stanford declines to report a yield number, but for the fall of 2014 admitted 521 candidates and enrolled 410 for an implied yield that is 12 percentage points lower than Harvard. In the four previous years, the Harvard Business School yield was 89%.

In releasing its financials today (Feb. 23), Harvard proved once again how utterly dominant it is in the business school space. The money that flows through the school is the envy of business school deans all over the world, most of whom lead schools whose annual budgets are less than Harvard’s scholarship kitty in any given year. The school’s endowment stood at $3.3 billion on June 30th, the end of its fiscal year, up slightly from $3.2 billion in 2014. That is roughly three times the endowment of its nearest business school competitor, Stanford. But it was clearly a tougher year for the managers of HBS money. The investment return on the Harvard endowment fell to 5.8%, net of all expenses and fees, compared with 15.4% for the prior year.

Judging by the success of HBS’ fundraising, there’s little likelihood of a cash scarcity in the near future. The school reported that its fundraising campaign raised more than $850 million in new gifts and pledges by fiscal year-end. About 50% of this giving consisted of unrestricted and restricted current use gifts intended to support near-term priorities. The balance was intended to sustain the school’s core operations over the long term by creating new endowment accounts and supporting major capital projects.

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