Conventional wisdom might lead one to believe that if you go to a one-year MBA program it should cost half as much as a more traditional two-year version. Afterall, even beyond the tuition bill, there are all those living expenses that have been cut in half.
But that’s not always true. Just look at what incoming MBA students this year will pay to attend the ten-month program at INSEAD, one of Europe’s very best business schools. The tuition alone is now €80,800, or $95,344 at current currency rates (little more than ten years ago tuition was €45,000). Compared to the two-year tuition at Harvard Business School of $144,000 this year, that seems like a bargain.
On the other hand, however, it also means that even at full sticker price, Harvard is offering an extra full year at just $48,656, with the opportunity to land a high-paying summer internship that on average pays a median of $16,000 for two months’ work.
HARVARD IS FAR MORE GENEROUS WITH SCHOLARSHIP SUPPORT
And then there is the scholarship money. With an endowment of $3.3 billion, roughly 15 times the size of INSEAD’s cash hoard, Harvard Business School can afford to be far more generous. INSEAD says that 28% of its students get scholarship grants that range between €8,000, or $9,440, and €35,000, or $41,300. The school does not disclose on its website the average or median scholarship grant.
Harvard, which will hand out more than $34 million in MBA scholarships this coming year, says that roughly half of its students receive discounts on their tuition bills. This year, the average scholarship grant at HBS is about $37,000 a year. Even if you take the mid-point of INSEAD’s scholarship range, a highly generous estimate, INSEAD’s grants might average closer to $25,000, or $12,000 a year less than HBS, or a whopping $49,000 under the average two-year grant at Harvard. And only 28% of the students get scholarship money at INSEAD versus the 50% or more at HBS.
But you can’t exactly count on a scholarship, wherever you go, and at Harvard only those who can demonstrate financial need are in the running for a grant. At INSEAD, the awards are handed out on both need and merit.
THE TOTAL COST INCLUDES MANY UNAVOIDABLE EXTRAS
Still, the full costs at any business school really kick in when you add up the costs of all the extras. And at INSEAD, there are a lot of extras. The school lists ten different additional expenses for its MBA students, from an estimated $10,000 for accommodations in Fontainebleau, France, to an estimated $5,500 for meals.
There is also $1,900 for an optional business foundations program; $633 for transport; $2,000 for a student exchange and job search, $2,000 for field trips, $1,500 in relocation expenses (many students move between the school’s Singapore and Fountainbleu campuses), $400 for a telephone, $1,000 for a laptop, and an estimated $3,900 for a car lease if a student is in Fontainbleu. By the way, INSEAD says that if you are on the Singapore campus, you can add another $1,500 in costs for housing and food, though you are less likely to need a car.
Add all these up and the total comes to nearly €29,000, or $34,000, in extra costs, above the $95,344 tuition, for an all-in bill of $129,367 in France or $126,496 in Singapore. That’s still well below Harvard’s total cost of $213,600. But recent INSEAD grads, as is often the case at every school, think some of the school’s estimates are too conservative.
THE COST FOR EXTENSIVE TRAVEL & PARTIES WITH CLASSMATES ADDS UP
Jonathan Levi, who graduated with his MBA from INSEAD in 2013, estimates that he spent €300 to €400, $354 to $472, a week on food and alcohol. At nearly €13,000, that’s more than twice the school’s estimate of €5,500 for meals in France or €6,000 for meals in Singapore—and his estimates are based on prices that are already four years old. “Food and alcohol will vary in cost obviously, but figure at least €300-400 a week, because you’re eating and drinking out a lot, and the campus cafeteria isn’t cheap,” he says in a post on Quora.
“Don’t forget National Week celebrations (usually €150 for the full week’s festivities, and there are something like 10 of them), extensive travel nearly 1-2x a month by plane or car, hotels hostels and AirBNBs, 32SGD drinks at KuDeTa, and of course, PARTIES,” explains Levi. “It’s very easy to spend well over €1,000 a month on social activities, and you won’t question it because you’d rather go into debt than miss out (many make this choice). A trip to Meribel will cost you a lot, and don’t fool yourself into thinking that social expenses are once in a while. At INSEAD they are every week at least once. I figured the 10 months cost me just shy of €40k above and beyond tuition… But I also traveled a lot (23 countries, God knows how many flights) and changed campuses, so I paid property agents twice.”
Bottom line: A great MBA education is going to cost you, even if you do it in ten months.