Adding the letters ‘MBA’ against your name comes at a cost. Considering that your wallet will be a lot lighter when are done with the program, it makes sense to make that decision carefully. There are a number of ways to narrow down your search on how much does a top 10 MBA cost and and one of the ways is to follow rankings based on tuition fees.
Enrolling for an MBA in any of the top ten schools can set you back by about $200,000. Apart from this, you must also consider that the tuition costs continue to rise every year by 4%-5%. Stanford, where the costs of the MBA program for the year 2019 work out to around $ 231,672 as against 225,594 in the year 2017 (about 3 % increase). INSEAD, on the other hand, presently stands at 191,642 as against 129,367 in the year 2017 which accounts for about 6 % increase.
Ivey Business School in Canada offers a detailed breakup of the kind of expenses you can incur when you enroll for the MBA program and the value of $118,981 includes living expenses (includes possible expenses such as cell phone, movie expenses, and laundry too). Compare this to approximately $70,100 in 2017 and you can see that the costs have risen. Such increases can be attributed to several things such as living expenses, better facilities or an improvement in the ranking of the school globally too.
So, what are the components of the fee and how can we justify the top 10 MBA cost?
Components of the fee
- Fees for the program (including tuition, transportation, books, and other costs): Let’s come to the most critical aspect of this conundrum! It is the all-important tuition costs. Tuition costs only form a part of the overall program fees. Business schools do provide a breakup of costs for convenience. For example, NYU Stern’s 21-month fulltime MBA costs $113,166. The breakup for which is as follows:
|Room and boarding||$26,024|
|Books and supplies||$1,980|
** Includes an NYU Student Health Insurance cost. Source:https://www.stern.nyu.edu/programs-admissions/full-time-mba/financial-aid/tuition-cost-attendance
Similarly, consider the MIT Sloan Fellows MBA program for the year 2018-2019 for which the breakup is as follows:
|Books and Supplies||$3,400|
|Personal (incl Insurance)||$8,664|
Therefore, tuition costs are about 60%-70% part of the overall expenses for the program. It is possible to reduce or limit the variables to a certain extent by choosing cheaper housing or cutting down on travel time by living closer to the universities. However, there are pros and cons to these choices as well.
Since tuition costs are a constant, it makes sense to look at these a little closer. While it seems unfair to compare a program purely on the basis of the tuition cost alone, it is one of the most important things to consider. Here’s a small comparison of the schools based on the tuition cost is as follows:
The most expensive business school as per the diagram is Wharton Business School. However, if you consider that INSEAD offers a 10-month program and Wharton has a 21-month program, is it fair to compare the two? Also, can you compare the experience and opportunities that both these programs offer?
- Living expenses: Business schools always provide a breakup of costs that includes the tuition fees; an estimate of the living expenses (assuming a modest lifestyle), insurance and health expenses. While tuition fees and expenses towards books may be exact, living and other miscellaneous costs can vary. For instance, if you choose to live outside the campus, the rents can vary greatly depending on where you live. To give you an idea, here’s a list of popular business schools in the US and what the monthly rent for a one-bedroom apartment can work out to be (the numbers are approximate figures for the year 2018-19)
|Business school||Approximate living expenses|
|1. NYU Stern||$ 3,157|
|2. MIT Sloan||$ 3,041|
|3. Harvard||$ 2,777|
|4. UCLA, Anderson||$ 2,684|
|5. Stanford||$ 2,574|
Having said that, the most common question we hear is ‘why are these programs that expensive?’ We can answer that question in a couple of ways- what the school offers to justify those costs and what you gain out of the program.
Justification of Costs by MBA programs
- Teaching faculty: Business schools pay top dollar to ensure that they hire the best in the field. Where do you think the ‘top dollar comes from? A chunk of the tuition fees is utilized in hiring the best in the industry. The diagram below gives you an idea of how much full-time professors in business schools are paid. The compensation varies greatly based on the business school; it’s ranking; the subject and the experience the professors bring in as well.
- Reputation: Is reputation important? Most certainly so as it is the name and the expertise that brings in the big employers when you are ready to move on from the program. This is where the all-important discussion about ROI comes in. Building such a reputation does not come cheap and that is precisely why these schools charge what they do. They spend a ton of resources on attracting the brightest talent (who will be your peers) from all over the world; employ the brightest minds and lure the world’s best organizations. For instance, Wharton School has steadily moved up the ranks with a 16% increase in salaries of graduates in a five year period. The average pay in the year 2014 was approx. 142,574, it stands at 165,528 in 2018
- Alumni: ‘The time to build a network is always before you need one’- ruminate on that one and you will realize that schools boasting of the best alumni offer you the brightest opportunities. Schools such as Harvard, MIT, and Stanford boast of an excellent Alumni that contribute in many ways to make the program memorable and worthwhile for you. According to a GMAC survey, 75% of alumni state that their business school degree helped to develop a professional network which they rely on. While it is hard to equate a percentage of the school fee to the expertise the alumni offer, you can definitely say it strongly influences your earning power.
- Exceptional facilities: The key component of the tuition fee as part of the top 10 MBA cost is of providing the best facilities. Harvard’s Innovation Lab is a goldmine when it comes to using the school’s resources to convert your idea into reality. Consider Wharton’s Steven’s Center for Innovation in Finance which collaborates and brings together the greatest minds in the industry with the best in academia. You can participate in a number of events, competitions, case writing/solving projects, internships, students’ clubs and numerous other experiences based on your area of expertise.
How Much Do Top 10 MBA Cost
Here’s a snapshot of the tuition fees and living expenses of the top ten business schools of 2019 as per Financial Times ranking.
|Sno||Name of the business school||The total amount of fees (Dollars)||Tuition (Dollars)||Living Allowance (Dollars)|
|1||Stanford Graduate School of Business||231,672||73,062||32,712|
|2||Harvard Business School||218,248||73,440||28,592|
|4||University of Pennsylvania, Wharton||223,800||78,948||22,350|
|6||London Business School||211,696||inclusive||inclusive|
|7||University of Chicago: Booth||217,366||72,000||22,185|
|9||Columbia Business School||221,956||74,400||21,375|
|10||University of California at Berkeley: Haas||193,196||61,506||24,160|
It is worth it guys! It’s best to manage your finances in advance through various loan options. It is not tough to repay them back in 1-2 years once you graduate. But with “new” you post an MBA, your life and career is surely a long way to go!