What Is the Cost of an MBA?
Are you ready to discover your college program?
An MBA degree can cost anywhere from $40,000 to $150,000 depending on the type of MBA your pursue and the school you choose to attend.
While MBAs can offer a high return on investment (ROI), they often require a significant commitment of time and money. It is possible to mitigate these costs, however, by researching and weighing your options carefully. Read on for our primer on typical MBA costs and ways MBA students can save.
Total Cost of an MBA
Graduate tuition is typically more expensive than an undergraduate degree, and MBAs are no exception. Depending on what factors are at play, you can expect to pay $40,000-$150,000 for an MBA degree.
However, for many students the higher earning potential, more job offers, and increased opportunities for advancement outweigh the cost. According to the Bureau of Labor Statistics (BLS), chief executives, a common career for MBA graduates, earned a median salary of $185,950 as of 2020.
Calculating the Cost of an MBA
Textbooks, transportation, and room and board all influence the total cost of getting an MBA. These expenses can accumulate, depending on how you choose to mitigate those costs. For instance, you could opt to earn your MBA from a public school within your home state, where you can get a discounted, in-state student tuition rate.
Other factors that can affect your MBA cost include admission test fees and living expenses. For example, international students studying in the U.S. who are not native English speakers may need to take the Test of English as a Foreign Language (TOEFL) and pay a small fee, and some MBA programs have travel requirements, especially for practicums.
Costs Within an MBA Program
Application and Registration Fees
At most schools, your MBA application comes with a fee of around $100. Some programs also charge a $100 registration fee.
TOEFL Exam Fee (for International Students)
International students should expect to pay $195-$245 to take the TOEFL.
GRE or GMAT Exam Fee
The GRE costs $205, while the GMAT exam costs $250.
Tuition
MBA tuition ranges from $40,000-$150,000.
Textbooks
MBA textbooks typically cost $1,000-$2,000.
Technology Costs
Many online programs charge a $500-$1,000 technology fee.
Room and Board Fees
You could end up paying $10,000- $40,000 for two years of living on campus.
Opportunity Cost of Opting out of a Paid Role While Pursuing an MBA
Opting out of work to focus on your education can mean lost earnings, lost raises, and more need for financial aid
Factors Influencing MBA Program Cost
Many factors can affect MBA prices. As a result, the cost of an MBA program can range widely based on program features. You can use the following list of factors as a checklist when researching prospective MBAs.
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Public vs. Private
Private colleges cost significantly more than public colleges due to their lack of state funding. Private colleges can also be more prestigious, allowing them to charge a higher premium.
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In-State vs. Out-of-State
Many public colleges offer lower tuition rates for in-state students. This practice encourages in-state students to remain local and give back to the state economy. If a learner stays within their home state for schooling, they often remain in state for employment.
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Prestigious vs. Not as Recognizable
A school’s level of prestige can also influence the price of an MBA program. Prestigious schools, like University of Southern California and Yale University, charge high tuition costs. Innovative institutions, such as Reed College and Bard College, also charge more than less recognizable schools. However, less recognizable schools can still offer quality MBA programs, but with lower tuition costs. Additionally, a private school may not be as recognized outside its local area; if you’re planning to build a career elsewhere, a state school might be a better bet.
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Employer-Funded Tuition
Many employers will gladly help workers pay for MBA degrees by partially subsidizing the cost, typically through employee reimbursement. Businesses do this because they benefit from have more educated personnel. These programs typically require that the employee continue to work at the company for a set number of years after graduation.
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Ability to Work While Pursuing an MBA
Your ability to work while earning your MBA can greatly affect degree cost. Enrollees need to pay for a lot of things on top of tuition, like transportation and textbooks, and these can add up to a lot. If you attend school while working, however, you can just address extra costs as you go. This also reduces your student loan debt.
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MBA Program Structure
MBA programs can vary widely in structure, which can influence program cost. Here’s a quick breakdown of the various program structures available when pursuing an MBA.
- Full-Time MBA Program: A full-time MBA program typically takes two years to complete. Full-time enrollees typically cannot maintain employment while pursuing their degrees, so they need to take out student loans. A lack of steady income affects your ability to pay for your MBA and life expenses.
- Part-Time MBA Program:Part-time MBA programs can take 2-5 years to complete. Part-time programs allow enrollees to continue working while in school, meaning they can cover expenses as they go. However, the increased time spent pursuing a degree can make the degree more expensive; many schools offer lower per-credit tuition rates for full-time courseloads.
- Accelerated MBA Program:Accelerated MBA programs take a year to complete. This structure generally does not accommodate a full-time work schedule, as learners need to concentrate on an increased course load. However, accelerated programs can save you money due to shorter degree timelines.
- Online MBA Program:Online MBAs are another opportunity to earn your degree in a more affordable structure. These degrees do not require you to attend classes in person, allowing you to maintain employment and income while pursuing an education. Also, online programs do not involve transportation or room and board costs, though they may incur fees for things like online student resources.
Strategies to Save on Your MBA
While paying for an MBA may seem intimidating, many of the factors that affect your MBA’s cost are within your control. Here are a few ways to mitigate degree costs:
Enroll in an online MBA, where you can build your school schedule around your work schedule.- Apply for subsidized mba scholarships, loans or grants specifically for business majors and MBA students.
- Check whether your employer will subsidize your MBA degree.
- Remain in state and attend a public school, where tuition is more affordable.
- Consider part-time programs, which allow you to work while earning your degree.
- Consider accelerated or executive MBA programs, which you can complete in one year.
- If you commute to school, use the bus rather than driving your car to school
A Real MBA Grad on the Cost of an MBA
TBS sits down with MBA grad, Annabel Gatto, to discuss how she paid for her MBA and advice she has for individuals thinking about pursuing an MBA.
Did you pay the “sticker price” for your MBA?
Yes, I paid the sticker price and took on debt to make the experience possible.
Which is the better investment — the lower-cost or higher-priced MBAs?
The best investment is selecting the school that you determine best fits your values and can best help you reach your goals. It’s important to have a target job in mind and then cross reference it against the employment reports of schools you are interested in. If your dream employer doesn’t recruit from a program, it’s probably not worth the cost for you.
Do you have any advice for a prospective MBA student hesitant about the cost of an MBA program?
I always viewed my MBA as an investment in myself. For any potential MBAs on the fence, I always advise to think of where you want to be five and 10 years from now and what you need to do to get there. Do you think the benefits of the MBA outweigh the opportunity cost?
What advice do you have for someone pursuing an MBA?
The best investment is selecting the school that you determine best fits your values and can best help you reach your goals. It’s important to have a target job in mind and then cross reference it against the employment reports of schools you are interested in. If your dream employer doesn’t recruit from a program, it’s probably not worth the cost for you.
Annabel Gatto is co-founder of Suitably, a professional womenswear brand that offers machine-washable workwear staples without compromising on style, comfort, or price.
Gatto developed her sense of style while working in the corporate world. Her experiences at Morgan Stanley, Groupon, and Sullivan & Cromwell each required learning a new industry and deciphering a new dress code. Now, she reaches over 100,000 followers who come to her for style guidance via @annabelfgatto on Instagram. Throughout her professional journey, Gatto was frustrated by the painful experience of shopping for workwear and the lack of resources available to help women succeed in the workplace. This formed the basis for Suitably, where Gatto keeps customer input at the heart of every decision.
Gatto is a graduate of Cornell University and Columbia Business School. She currently lives in NYC with her husband and her spirited goldendoodle, Theodore.
Frequently Asked Questions
Yes, an MBA often leads to opportunities for increased earnings, though no salary rate is guaranteed. For example, if you advance from human resources manager to chief human resources manager, your salary will likely increase.
Yes, MBAs usually offer a decent return on investment, though you should still try to manage the cost of your MBA and mitigate student debt.
Yes. If you pursue an accelerated MBA program, you can earn your degree in one year by taking on a heavier full-time course load within a shorter period.
The cost range for an MBA is $40,000-$150,000.
Matthew Sweeney received his Bachelor of Arts in English with a specialization in English literature from Portland State. His writings on music and culture have appeared in the publications Eleven PDX Magazine and Secret Decoder. In his free time he enjoys reading, cinema, hiking, and cooking.
Header Image Credit: AnnaStills | Getty Images
