HBS Boosted MBA Scholarships By 8% To $42K Per Year

Harvard Business School students. Image from the cover of the school’s 2019 Financial Report

In a year in which Harvard Business School’s online operations finally broke into the black for the first time, the school boosted average MBA scholarships by 8% to $42,043 a year from $38,959 a year earlier. All told, the school paid out a record of nearly $38 million in fellowship support in fiscal 2019 to just 825 MBA students.

Over the past five fiscal years, the school’s average two-year MBA fellowship award has grown from $64,836 for the Class of 2015 to $80,400 for the Class of 2020. About 44% of the school’s 1,881 MBA students received fellowships, which cover an average of more than 50% of a student’s total tuition. At HBS, scholarships are based not on merit but need, and among those getting the awards were more than 170 students in the classes of 2020 and 2021 who were the first in their families to attend college and now graduate school.

That’s all according to the recently released financial report from Harvard Business School for fiscal 2019. Of all the business schools in the world, HBS is the most transparent when it comes to the organization’s financials. Year after year, the enviable numbers are a reminder of the school’s riches. And fiscal 2019–before the current market crash and recession–was one of the best ever. The value of the HBS endowment, after distributions and the addition of new gifts, reached a record $4 billion, up from $3.8 billion a year earlier, after a 6.5% return, down from 10% the previous year. The school generated an operating surplus of $104 million, compared with $90 million in the prior year. HBS ended the year with an unrestricted reserves balance of $129 million, up from $118 million a year earlier.


“Harvard Business School’s economic model performed impressively in fiscal 2019. wrote Richard Melnick, chief financial officer for HBS. “For the fifth consecutive year, revenues grew faster than expenses, resulting in a double-digit increase in cash from operations.”

The biggest news in the annual report, however, was the turnaround at HBS Online. After posting deficits in every year since its inception five years ago, in fiscal 2019 the online group became a contributor to the school’s operating surplus by nearly $5 million. This compares with a $5 million operating deficit in fiscal 2018, and red ink exceeding $10 million for each of the four prior years. Total revenue at HBS Online in 2019 more than doubled to $43 million, from $19 million a year earlier.

Online continued to add courses in fiscal 2019, launching Global Business and Leadership Principles, and reached a total of more than 16,000 asynchronous participants across the portfolio during the year. Moreover, HBX Live, the school’s virtual classroom, hosted 192 synchronous sessions, a whopping 90% increase from fiscal 2018 and generated 400% growth in revenue for the year. The school said that the completion rate for its online courses was 87%, with a net promoter score of 61, well above Apple’s score of 47.

The single biggest contributor to both revenue and surplus continued to be the school’s Harvard Business Publishing unit, even though it sold fewer case studies to other schools and organizations, 14.5 million versus 15.1 million a year earlier, and even though average monthly traffic to HBR.org slipped to 6.9 million from 7.2 million. Total revenue for the unit grew by $22 million, or 9%, to a record $262 million, from $240 million a year earlier, exceeding the school’s cautious forecast for zero growth. International sales rose 14%, comprising 36% of publishing’s total annual revenues.


Harvard Business Review (HBR) group sales increased 7% from the prior year. “The subscription model for HBR continued to gain market traction in fiscal 2019; paid circulation grew 6% to 340,000—the highest since Harvard Business Review began publication almost a century ago—driven by refined social media/digital campaigns and new sub- scription offers and options,” according to the report.

HBS’ executive education arm also brought home the bacon, with a 7%, or $15 million, in increased tuition revenue, from fiscal 2018, to $222 million, exceeding the school’s forecast by 9%. “As in the prior year, this growth was made possible by new and newly renovated buildings on campus, including Tata Hall, Esteves Hall, and the Chao Center,” the report noted. “Leveraging the additional space in these facilities, HBS continued to expand its Executive Education program portfolio and increase the num- ber of program participants in fiscal 2019, and total enrollment grew more than 4% to approximately 12,600.”

Student tuition and fee revenue from the MBA program increased to $140 million, from $138 million in fiscal 2018. First-year MBA tuition in fiscal 2019 was $73,440, compared with $72,000 last year. “The school’s combined tuition and fees for fiscal 2019 were near the midpoint among the seven peer schools tracked by HBS, and amounted to 15% of the school’s total revenues, compared with 16% a year earlier,” according to the report.

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