As the saying goes, Harvard Business School is everyone’s “reach” school — even if it isn’t the hardest B-school to get into. No matter how stellar your bona fides and your application, you never know what to expect from HBS admissions. But suppose you’re one of the lucky 12% of applicants — according to our most recent estimate — who gain admission to Cambridge’s most hallowed halls: Congratulations! For you, HBS has become a “reach” in a different way — you have to reach deep into your finances to afford it.
HBS has not raised tuition for its MBA program since 2018, a reflection of the state of the economy and the school’s strategy to price its MBA program at the mid-point of peer schools such as Stanford, Wharton, Northwestern Kellogg, Chicago Booth, Columbia Business School, and MIT Sloan. But that hasn’t stopped the cost of attending HBS from rising, particularly if you are a married student. And especially if you are a married student with children.
According to Harvard’s Annual Cost of Attendance webpage, the yearly price tag for single MBA students is $111,818, a total that includes not only tuition but health insurance, materials, room and board, and living expenses. Double that for a two-year cost of $223,636 — only an estimate, of course, because fees and cost of living estimates can’t be expected to remain static year-over-year. It’s an astronomical sum, offset somewhat by Harvard’s generosity in grants and fellowships (more on that below). But single HBS students have it relatively easy: If you are married with two children, the school estimates your annual expenses to exceed $150,000 — and your two-year costs to eclipse the $300K mark.
COSTLY? YES — AND EVEN MORE SO FOR STUDENTS WITH FAMILIES
In 2018, Harvard Business School raised annual MBA tuition to $73,440, where it has stayed in the two cycles since. That freeze is why the total cost for single MBA students at HBS has only grown by about $10,000 since 2017, reflecting simple cost-of-living adjustments (calculated based on market rates) and minor fee increases. But for married students and those with spouses and dependents, the costs are considerably more, and cost of living doesn’t account for all of it. Over two years, single MBA students can expect to pay about $223K, while married students will pay more than $264K, married with one child more than $295K, and married with two kids about $310K. The differences: $40,716, $71,944, and $86,280, respectively. What gives?
The answer lies mostly in membership in the Harvard University Student Health Program. Besides the annual Student Health Insurance Plan (SHIP) cost of $3,922 and the Student Health Fee of $1,206, students pay extra for spouses and children as part of the HUSHP: $8,118 annually ($16,236 over two years) for a spouse, $12,432 ($24,864) for a spouse and child, and $14,600 ($29,200) for a spouse and two children. The plan, administered by Blue Cross Blue Shield, provides hospital, specialty care coverage, and prescription drug coverage throughout the U.S. and abroad, according to HBS.
“External factors in the healthcare market, such as varying prescription drug pricing and shifting physician and hospital reimbursement rates, continue to impact both commercial health insurance plans and individual student health insurance plans,” the school states on the HUSHP webpage. “As a result, the premiums reflect a thoughtful analysis of the plan benefits, the increase in medical and prescription drug costs, and the benefit utilization by students and their dependents. Premium adjustments are made on the basis of actual plan costs from previous years.”
LOTS OF AID & A STERLING ROI
Tuition is only the biggest expense for a Harvard MBA student. There’s also course fees and materials, which comes to $2,550 annually, or $5,100 for two years (up $100 from 2017); $7,844 for two years of SHIP (up 25%); an estimated $28,260 for room and utilities on campus (up 7%); and finally another $33,140 for food, drinks, and other incidentals (up about 12%). Silver lining: In a world still reeling from the coronavirus pandemic, one expense students this year — and perhaps next — won’t have to worry about is travel. Those group ski vacations in the Alps tend to be expensive.
Meanwhile, even as tuition has stayed flat at HBS, scholarships have increased, with about half of MBA students receiving an average of $42K annually and $84K over two years. The school now gives out more than $43 million in grants and other aid annually, including need-based scholarships, complementary fellowships, outside scholarships, student loans, or a combination thereof. In 2002, when HBS tuition was about $30K, the school gave an average of just over $9K to each MBA student, or around one-third of the tuition cost. Now the amount of aid is more than half.
Of course, lost wages can be a major factor. According to a 2019 Bloomberg Businessweek survey, about a quarter of HBS grads graduate with six-figure debt; however, Harvard’s ROI remains among the best for any business school in the world, with a median starting salary of $148,750 and median sign-on bonus of $30K.