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A Master of Business Administration degree is highly sought after in business and can be an important step toward success. It can also put you on the path to a lucrative career, as MBA holders achieve an average starting salary of $115,000.
But these programs often are not cheap. They can cost $160,000 or more per year, depending on your institution. That cost could ultimately be worth it, but it is worth considering the full financial costs of attending an MBA program before deciding to move forward.
What factors affect the cost of an MBA program?
Several factors determine the total cost of an MBA program, including residency status, part-time versus full-time enrollment, school type and whether students pursue an online or on-campus education. On-campus fees, such as room and board, can add up quickly and vary dramatically between schools.
One of the biggest decisions you’ll have to make about your MBA program is whether you’ll attend full time or part time. Full-time, in-person MBA programs typically require the highest investment due to the cost of room and board, possible relocation and lost income and opportunity. Depending on the school, lodging and food can add approximately $20,000 to $60,000 to the cost of an MBA.
Part-time programs allow students to continue working. These programs typically require students to pay per credit and take three or more years to complete. Approximate per-credit tuition costs range from about $230 for in-state students at public universities to almost $2,000 at private institutions.
When selecting an MBA program, you’ll also need to consider the length of your program and how you’ll receive your education.
MBA programs typically require 30 to 60 credits and take two years of full-time study to complete. However, many schools also offer accelerated tracks, which can lead to an MBA in one year. These programs can significantly reduce the costs of tuition, fees and room and board. Graduates also reenter the workforce in one year, decreasing the impact of lost wages.
Online programs also offer an opportunity to reduce the cost of an MBA. Some online programs do not charge additional fees for out-of-state residents. Many online students remain employed and do not pay on-campus facility fees or room and board expenses.
The type of school also impacts the cost of an MBA program. Private institutions usually cost more than public schools, with in-state residents at public colleges finding the lowest tuition rates. Most prestigious programs and those that offer additional services also tend to cost more.
For instance, tuition and fees for some top-ranked private schools range from $73,728 per year (Carnegie Mellon University) to $84,874 per year (Wharton). For in-state residents at four-year public institutions, the lowest tuition rates may drop to $14,764 per year (Missouri State University).
What is the real cost of an MBA?
While the annual tuition costs of an MBA program can range from just under $20,000 to more than $80,000, the real cost of earning an MBA in person includes much more than tuition. Campus fees, room and board, transportation and textbooks increase the cost.
Textbooks typically cost $1,000 to $4,000, and annual fees can easily add up to more than $2,000. Depending on where you choose to live, the yearly cost for room and board can run anywhere from $10,000 to $30,000 or more.
Prospective full-time, on-campus students should also consider the lost opportunity cost. This cost refers to the lost salary and job opportunities should a student quit their job. For instance, if you earn $60,000 yearly and resign to pursue a full-time education, your two-year opportunity cost is $120,000.
|Expense||Possible cost per year|
|Textbooks and supplies||$1,000 to $4,000|
|Room and board||$10,000 to $30,000|
|Transportation||Average of $1,760|
How much does an online MBA cost?
Online tuition costs are often similar to in-person rates and range from $250 to $2,200 per credit. While some schools do not charge out-of-state fees, the tuition fees for an online learner can exceed the costs for an in-state resident. Additionally, many online programs charge an online education delivery or technology fee or may require some on-campus participation, which adds travel costs.
With that said, students pursuing an online degree forego the cost of room and board, which can save thousands of dollars. Students may also save some money by purchasing digital textbooks if their program allows for it. Additionally, students who pursue an online MBA and continue to work reduce their opportunity costs.
How much does a top-ranked MBA cost?
Top-ranked MBA programs, such as programs at UNC Kenan-Flagler and Wharton, can cost between $79,714 and $118,568 per year, respectively. Although these figures may seem high, they include not only tuition and fees, but also books, course materials, food, housing and health insurance, in addition to access to networking events and special workshops.
However, if you attend a top-ranked MBA program at a public institution in your state, you could save several thousands of dollars. For instance, the total cost of attendance for in-state students at Indiana University’s Kelley School of Business School is $55,167, versus $80,275 for out-of-state and international students.
|Wharton School of the University of Pennsylvania||$168,104|
|New York University||$161,026|
|Massachusetts Institute of Technology||$159,354|
|University of Chicago||$152,760|
|University of California, Berkeley||$148,250|
How to pay for an MBA program
Most students don’t pay for MBA programs out of pocket. Financial aid, scholarships, tuition fellowships and more can help alleviate some of the costs associated with an MBA.
Fellowships, scholarships and grants
Fellowships, scholarships and grants should be one of the first places you look for financial aid since these don’t need to be repaid at the end of your education. Many schools offer fellowships, which cover all or part of a student’s tuition fees, and they may also provide mentorship and job opportunities. Schools may also provide full-ride scholarships that consider academic merit, financial need, professional experience and future career plans.
You may be able to find grants at the state level and scholarships through private organizations. Scholarship search engines can help you narrow down opportunities suited to your interests, background and future goals.
Many employers pay for part or all of the tuition costs for employees returning to school to earn their MBA. A few companies that offer tuition assistance are Deloitte, Apple and Intel.
Most employer-sponsored aid and reimbursement programs require employees to remain at the company for a specified number of years following graduation, and some have set limits for how much aid you can receive.
Federal financial aid
Students must complete the Free Application for Federal Student Aid (FAFSA) for MBA programs to apply for federal financial aid. This kind of aid includes federal grants, loans and work-study programs. Schools may also refer to this form to determine eligibility for scholarships and institutional aid programs.
If you’ve run out of options for free financial aid, you may have to turn to MBA loans in order to finance the remainder of your education. The federal government offers Direct Unsubsidized Loans and grad PLUS loans to graduate students, with fixed interest rates and benefits like income-driven repayment plans. These are usually the best place to start looking.
If you have excellent credit, you may also find lower interest rates with private student loans. While private student loans don’t come with the same benefits as federal student loans, they often let you choose between fixed and variable interest rates and have a variety of repayment terms. Remember that anything you borrow will have to be paid back with interest, so it’s best to exhaust your scholarship and grant opportunities first.
The bottom line
Getting an MBA can be a great opportunity to advance your career, but it can also be expensive. Consider the cost of the program and the costs that are not advertised, such as transportation and textbooks.
Also, make sure to consider the opportunities that you may miss out on while undergoing the intensive schooling program. If an MBA makes sense for you and your career, pick an institution that meets your educational needs and your budget.
Frequently asked questions about MBA costs
Some schools charge the same tuition fees for their online and on-campus MBA programs, while other schools offer reduced rates for their online students and no out-of-state fees. Additional savings for online learners include reduced on-campus fees and room and board costs. Most online students also continue working, decreasing their lost opportunity cost.
Most MBA programs consist of 30 to 60 credits and take two years of full-time study to complete. Some accelerated MBA tracks can lead to completion in one year. Part-time students juggling work, school and other responsibilities may take three or more years to earn their degree.
Determining the return on investment is one way to identify an MBA’s worth. Most schools share their MBA graduates’ average starting salaries, which you can compare to the total educational expenses to determine how long it will take to recoup the costs. According to PayScale, MBA degree-holders earn an average annual salary of $92,000.
MBAs provide students with the skill sets considered vital to potential employers. According to the Graduate Management Admission Council (GMAC), 92 percent of surveyed recruiters plan to hire MBA graduates in 2022 and 95 percent of staffing companies. Schools can charge high tuition because of the prestige and financial gain their MBA graduates may achieve.
MBA salaries vary based on your graduate school, employer and position, but having an MBA can significantly boost your salary potential. The National Association of Colleges and Employers found that the average salary projection for 2022 MBA graduates is $73,318, compared to $59,514 for graduates with a bachelor’s degree in business administration. Some top-rated MBA programs report their graduates’ average starting salaries as much higher; Wharton says that most of its 2020 graduates received starting salary offers between $130,000 and $165,000.