Just two years ago, New York University’s Stern School of Business crashed through the $200,000 barrier for the total cost of its full-time MBA program. It was the first time any business school advised incoming students to budget more than $200K for MBA tuition, fees, room and board, and other expenses.
Now, there are four business schools that meet or exceed the $200,000 threshold: Besides NYU, there’s Stanford University’s Graduate School of Business, the University of Pennsylvania’s Wharton School, and Columbia Business School. Expect more schools to move into this territory. Harvard Business School, for example, has already told admitted applicants that the cost of a year at HBS for the Class of 2018 will be $102,320, up from $98,400, an increase that will bring its total two-year cost to $204,640.
And the school with the most expensive MBA program in the world? Stanford edged out NYU Stern, where the total expense is now $206,474, for that dubious distinction. The cost of a Stanford MBA is now a breathtaking $210,838 including the $4,000 school estimate for a study trip. Just two years ago, that Stanford degree would have cost $202,870.
IF YOU INCLUDE LOST INCOME FROM A JOB, THE TOTAL COST OF A STANFORD MBA NOW EXCEEDS $400,000
The Stanford price tag includes $64,050 in annual tuition, $29,202 a year in living allowances (the highest estimate among the top 25 U.S. schools), $1,437 a year for books and supplies, another $1,350 for what the school calls “instructional materials,” annual required medical insurance of $4,680, and $1,062 for Week Zero, when faculty pilot week-long classes based on their research.
As high as the $210,838 is, it’s also for a single MBA student living on campus with “a moderate lifestyle.” Live off campus and the recommended budget by the school quickly rises to $220,966. Come to Stanford’s MBA program as a married student who wants to live off campus and the cost of the degree jumps to $254,830. But at least at Stanford, incoming students are guaranteed that their tuition won’t go up in their second year in the MBA program. Many schools pass on a 3% to 5% tuition increase to students in their last year.
As shockingly high as that sum appears, it can be a conservative number. At most schools, estimated living costs by a school often are between 10% and 20% lower than what many MBAs actually end up spending. Add in the opportunity cost of quitting a job for two years, and the total cost at Stanford and several other top schools can exceed $400,000, even after deducting the earnings from a summer internship. That’s because Stanford and Harvard MBA students leave jobs already paying more than $85,000 a year. And none of this counts the fairly hefty interest charges you’ll pay on a student loan.
The costs of getting an MBA has become so high that some business school officials are sounding the alarm that the price tags on full-time, two-year MBA programs are approaching a danger zone. Elizabeth Ziegler, chief innovation officer for Northwestern University’s Kellogg School of Management, last year warned that “we are pricing ourselves out of the market.”
SCHOLARSHIPS OFTEN DISCOUNT THE STICKER PRICE OF AN MBA
Of course, these are sticker prices and do not include discounts in the form of scholarship aid. Most business schools are aggressively increasing their scholarship support of students to help defray the escalating costs of tuition and fees. Stanford, for example, says its average yearly scholarship grant to MBA students is $35,343, with 52% of all students receiving grants. At Harvard, the average fellowship grant last year was $32,919, with 56% of the students receiving scholarships. HBS doled out $33 million in MBA discounts last year and expects to increase its overall scholarship funds by 9% this year. UC-Berkeley, which only enrolls a small incoming class of under 250 students, spread $5.8 million in scholarship money to its MBAs this past year.
That said, the median cost of a Top 25 degree is roughly $171,000, up from $168,000 last year. After Stanford and NYU Stern, the most expensive programs are Wharton ($200,908), Columbia Business School ($199,648, not including an optional study tour which would push it well over $200K), Harvard Business School ($196,800), and MIT Sloan ($196,028).
Even public universities with highly ranked MBA programs are no longer cheap. The most expensive public university business school MBA is the University of Virginia’s Darden School of Business. The total cost of a Darden degree for out-of-state students? $174,814, with an annual tuition of $61,650. That’s just $75 less than Harvard Business School’s tuition. Even residents of Virginia don’t get much of a deal. The in-state cost of the MBA at Darden is $169,982, a discount of less than $5,000.