Harvard Refunded Nearly $5 Million In Tuition To MBA Students

Let’s Keep Harvard Healthy is the new messaging as Harvard Business School returns to campus during the pandemic

To help its MBA students in a job market challenged by the pandemic, Harvard Business School tripled the size of its summer fellows program last year and refunded nearly $5 million in tuition to first-year students.

Noting that internships and other summer employment opportunities shrank last year, the school provided supplemental salary support fro 750 students, three times the more typical 250 MBA candidates who usually get such aid by taking jobs in the social sector or with startups. Harvard decided to refund $4.7 million in MBA tuition after cancelling its global immersion course due to COVID.

And in another offset to the economic consequences of the pandemic, the school shoveled an  extra $6 million in scholarship aid to students in the year. Those extra dollars brought total scholarship support to an unprecedented $57 million. The vast majority of those fellowship funds, a record $40 million, went to MBA students, with the remainder covering doctoral candidates and executive education participants. MBA scholarships at HBS—received by roughly half the students—averaged out to more than $42,000 per student in fiscal 2020.


Harvard Business School's 2020 Annual Report

Harvard Business School’s 2020 Annual Report

The disclosures—in Harvard Business School’s recently published 2020 annual report—show that Harvard plans to increase fellowship aid to students yet again this year to help its diversity initiatives. “In light of the widespread crises that have gripped America and the world over the past year—racial inequality, the pandemic, and global economic instability—the MBA Program has strengthened its commitment to a diverse and engaged HBS community. To ensure that applicants have the appropriate resources to succeed at the School, the MBA Program plans to increase its financial aid resources, launch a new one-year COVID-19 Hardship Fund, and introduce a new Childcare Scholarship Fund,” wrote Richard Melnick, chief financial officer of Harvard Business School

The extent of the school’s support to its students during the pandemic may well be unique among the leading business schools, partly because of the size of Harvard Business School’s endowment and the strength of its balance sheet. The school was able to pour more money into its flagship MBA program at a time when total revenue fell by $64 million, or 7%, to $861 million in fiscal year 2020, ending in June, and new gifts and pledges was chopped in half to $75 million from $150 million a year earlier.

Despite the drop in revenue, the school was still able to stay in the black. HBS generated an operating surplus of $30 million, compared with $104 million for the prior year. And the school’s endowment, the largest of any business school in the world, increased to $4.1 billion from $4 billion, even after the net impact of distributions. Those were unexpected positive outcomes in a year in which HBS had predicted it could run a deficit of $22 million (see HBS Expects Revenue To Plunge $115 Million, Causing A $22 Million Loss).


But COVID’s impact on the school is far from over. HBS is forecasting another 12% decline in revenue and a significant operating deficit for the current fiscal year as the result of the pandemic.

In common with other schools that have significant executive education programming, the hardest hit part of HBS thus far has been its certificate programs for executives. COVID closed down face-to-face classes on the Harvard campus in mid-March. Executive Education programs were canceled first in international locations, including the Middle East and Asia, and then in Boston, as well, according to the report. By June, the group had made plans to pivot to online programming, including both modules of longer offerings, such as the General Management Program, and shorter topic-focused programs, such as Leading Difference for High Performance. Executive education tuition plunged by $76 million to $146 million in fiscal 2020 from $222 million in the prior year. The result: Total exec ed tuition revenue fell to 17% of the school’s total revenues in fiscal 2020 from 24% a year earlier.

However, it helped that Harvard Business School’s publishing operation didn’t suffer a decline. Revenue from the publication and sale of case studies, books and the Harvard Business Review remained flat at $262 million with the prior year.

The pandemic caused a sharp decline in revenues at Harvard Business School with the worse yet to come

The pandemic caused a sharp decline in revenues at Harvard Business School with the worse yet to come


In a dramatic contrast to its traditional executive education business, the school’s online programming had a strong year of continued growth. HBS Online posted its second consecutive operating surplus since its inception in fiscal 2014. The group’s operating surplus more than doubled to $10.2 million on a 35% increase in revenue, which grew to $58 million from $43 million in fiscal 2019.

That progress is especially good news because the business school’s online initiative had posted deficits in every year until last year’s turnaround. During those years, the red ink exceeded $10 million for each of the four prior years until declining to a $5  million operating deficit in fiscal 2018, and then finally moving into the black in 2019.

Expanding its portfolio with new programs, HBS Online (HBSO) launched an alternative investments course and a leadership program based on lessons learned from the expeditions of explorer Ernest Shackleton. During the year, the group reached more than 29,000 asynchronous participants across its portfolio of online courses.

“As part of its pandemic response,” added Melnick, “HBSO provided its Credential of Readiness (CORe) program at a discount to more than 1,000 college students who had lost jobs or internship opportunities because of COVID-19. Additionally, the group offered 10 hours of free business lessons. The offer received an overwhelming response, with more than 36,000 participants. Fiscal 2020 also marked the second full year of the Harvard Business Analytics Program, a certificate program for executives that has attracted more than 900 participants since inception. The growth push revenue from HBS Online to 7% of the school’s total revenues, up from 5% a year earlier.

Harvard Business School expenses in fiscal 2020

Harvard Business School expenses in fiscal 2020


In his financial overview, Melnick noted that MBA tuition and fees declined 3%, or $4 million, for the fiscal year to $136 million. “Much of the decrease is directly attributable to COVID-19, which prompted the cancellation of the FIELD Global Immersion, a required semester-long course that culminates in travel to a global partner company; all students received refunds. As part of the transition to concluding the spring semester in a remote learning mode, the School provided funds to cover technology purchases, printing, and other costs associated with participation in online classes for all students.”

The Field Global Immersion (FGI) course, a staple of the MBA required curriculum since its launch in January 2012, was canceled in early March due to the coronavirus pandemic. In February, with outbreaks already underway in China and South Korea, FGI sections in these locations were relocated to new cities. But it soon became clear, given rapidly changing travel restrictions and uncertainty about the progression of the disease, that it would be infeasible to ensure the safety and well-being of the more than 1,000 MBA students, faculty, and staff involved in the year’s program, according to the report.

“As summer approached, and the prolonged nature of COVID-19 became clear,” he added, “the School also stepped in to help MBA students navigate a challenging job market. As the economic crisis worsened, internships and other summer employment opportunities rapidly began to shrink. HBS significantly expanded the funding for its long-standing Summer Fellows Program, which supplements salaries for students taking positions in entrepreneurial organizations, social enterprises, and other non-traditional sectors.

“HBS is continuing to innovate across the MBA Program, offering unique opportunities that position students at the intersection of science, technology and management. In fiscal 2020, the School enrolled its first group of students in the new MS/MBA Biotechnology program and graduated the first cohort in a similar joint degree program in engineering.”


Approximately half of the school’s MBA students currently receive fellowships, which cover an average of more than 50% of a student’s tuition. About 26% of tuition—more than $35 million—was awarded as fellowships in fiscal 2020. Average fellowship support per student totaled more than $42,000 in fiscal 2020 and was up slightly from the prior year. Over the past five fiscal years, the school’s average two-year MBA fellowship award has grown from nearly $65,000 for the class of 2016 to more than $80,000 for the class of 2021 as tuition was held flat.

Melnick attributed the school’s ability to stay in the black during the year to careful planning which he believed helped to mitigate the financial impact of COVID-19 on the school. “In the months leading up to fiscal 2020, and long before the coronavirus was on the horizon, a team of HBS faculty and staff met to discuss what steps might be required in the event of an economic slowdown. With lessons learned from how HBS responded to the Great Recession, they developed a playbook that included not only strategies for containing costs but also opportunities for new growth. The team was guided by the desire to ensure that, in the face of a recession, the School’s educational pro- grams and faculty research would remain strong. This work, combined with multiyear financial planning, frequent refore- casting, and regular updates on key metrics, built a shared understanding of the School’s financial status and community readiness to act when needed.”

He wrote that “the ability to generate a surplus—despite the unprecedented events late in the fiscal year—speaks to the diversity of our revenue streams, our conservative operating philosophy, and the versatility of our economic model. With the duration and extent of COVID-19 still uncertain, each of these ele- ments will be essential as the School continues to adapt to the challenges of the year ahead.”


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