How Can I Pay for an MBA (and Will It Pay Me Back)?
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With price tags frequently reaching six figures, students considering MBAs should weigh their financial aid options and maximize the potential return on investment.
MBA costs can be jaw-dropping. MIT Sloan, the most expensive MBA program in the world, costs over $237,000. However, in-state MBA students at West Texas A&M University pay as little as $15,500 for their degrees.
On the other hand, many MBA graduates earn high starting salaries. In a 2019 survey, corporate recruiters reported average starting salaries of over $115,000 per year for MBA graduates in finance, consulting, healthcare, and technology.
By thinking strategically about paying for an MBA — and its potential return in the long run — enrollees can make educated decisions about their MBAs.
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How Much Does an MBA Cost?
MBA costs vary by program, but at many business schools, an MBA costs more than $100,000. For example, Michigan State University charges around $52,000 per year in tuition for its MBA program, while the University of Southern California estimates that the total cost for its MBA program exceeds $112,000.
Prospective students should also factor in tuition, fees, books, and living expenses. Full-time students who leave the workforce to pursue MBAs also need to consider the opportunity cost of spending two years without a salary or saving for retirement.
Can You Get Financial Aid for an MBA?
MBA students qualify for several forms of financial aid, including scholarships, fellowships, and student loans. When researching financial aid opportunities for MBA programs, here are a few places to start.
How to Get Your Company to Help Pay for an MBA
According to a 2019 survey from the Society for Human Resources Management, 56% of employers offer educational assistance benefits for their employees. That means MBA students can use their company's benefits to pay for a degree. Keep in mind that these benefits often include conditions, including an annual cap on benefits or a requirement to work for the company for a period of time after completing the degree.
Below are a few different scenarios that employees may find themselves in with regard to seeking employer-funded education.
Your Workplace Offers Employer Sponsorship, Tuition Assistance, or Tuition Reimbursement
If your company offers tuition assistance for employees, reach out to the human resources department to learn more about using the program. Often, employer sponsorships are reimbursement programs, where the employer pays for courses where the employee finishes with a minimum GPA. It's also common for employers to cap tuition benefits at $5,250 per year, since the IRS limits tax deductions for educational expenses at that amount.
Your Workplace Does Not Yet Offer Employer Sponsorship, Tuition Assistance, or Tuition Reimbursement
Employees can reach out to their supervisors and benefits departments to ask about education assistance. If you choose to go this route, bring research to support your position, including information about the $5,250 IRS tax deduction for employer-provided educational expenses. If your employer does not want to offer a tuition assistance program, ask about MBA sponsorship options.
Your Workplace Will Not Offer Employer Sponsorship, Tuition Assistance, or Tuition Reimbursement
Some workplaces decline to offer tuition assistance or other support for employees pursuing degrees. In this case, consider looking for other jobs before applying to an MBA program. About half of employers offer tuition reimbursement benefits, so it may be worth changing jobs. However, keep in mind that other benefits come in handy if you plan to work while pursuing a degree, like schedule flexibility.
Will Getting an MBA Pay Off?
The ,total cost of an MBA can exceed $100,000 in tuition and fees. Which begs the question: Is an MBA worth it?
For many, an MBA pays off. In 2020, professionals with MBAs reported an average starting salary of $101,034, including bonuses.
However, before applying to business school, prospective MBA students should carefully consider their personal and professional goals. Individuals interested in more expensive programs, for instance, may feel pressured to pursue higher-paying career paths after graduation to pay back their loans. Researching potential salaries provides valuable information when weighing the cost of an MBA.
According to a 2019 corporate recruiters survey, certain industries pay higher starting salaries for MBA graduates. Finance, healthcare, and technology all offer median starting salaries between $115,000-$125,000. In contrast, the nonprofit and government sectors pay starting salaries of around $65,000.
Location also matters. New hires with an MBA in the Northeast earn a starting median salary of $125,000, while those in the South make a median salary of $95,000.
Interview with an Expert
Ashley Shenk is a USAF veteran and Florida native who is fluent in tourism. She has 15 years of experience in customer service, recreation, and marketing within the travel and hospitality industry.
Where did you get your MBA?
At the University of Tampa, class of 2018.
At what point in your career did you get your MBA, and why then?
I started the MBA program at the University of Tampa six years after earning a bachelor's degree in recreation and leisure services administration with a concentration in special events and a minor in child development from Florida State University.
Growing up in Southwest Florida, a global tourist destination, you could say that I was born into the hospitality industry. And, put simply, I was looking for a competitive edge. Like many marketing and creative professionals, I had a tendency to avoid “the numbers” as much as possible — and so, I didn't invest energy during my undergraduate years developing skills in operational, strategic, and financial management. The MBA program allowed me to develop those skills in a safe learning environment.
What did you specialize in?
I completed a dual degree MBA and master's in marketing.
What do you do for your career now?
I'm Partner and Brand Experience Director at NOISE Inc., a full-service brand activation agency. Our clients have spanned across the U.S., from small businesses to destination marketing organizations (DMOs) to the leading hospitality brands in Southwest Florida.
What advice do you have for someone considering pursuing an MBA?
You're going to invest years of your life into an MBA program and its people — be sure that the university's offerings have the potential to meet your post-graduate employment expectations. Research the program for accreditation and reputation. Research the professors; research the alumni; and find out which employers are participating in events and scouting students, how often do these events happen. Most importantly, what's the outcome? Find out the percentage of graduates that reported achieving successful employment through the MBA program that interests you.
How old is too old to pursue an MBA?
Continuing education is a life-long journey — you're never too old.
What do you think has been the biggest advantage to your career after completing your MBA?
A fresh perspective. Understanding business goals and objectives, and how marketing results are influenced by the people, operations, finances, systems and processes within an organization. This fresh perspective helps me navigate across departments and silos to bring value to our team in finding creative marketing solutions that produce stronger results.
How, and who, did you network with within your MBA program? What advantages did that bring?
I volunteered to work at seminars and attended networking events hosted by the university. I got to know my peers, the professors, and the business leaders within the community. I found great mentors, acquaintances, and friends.
I'll never forget sitting in on a Women in Business Speaker Series and listening to Joyce Cotton, Director of Marketing & Community Partnerships for WEDU, talk about her approach to leadership. I'm introverted, but she was so insightful and I wanted to learn more from her. So, after the seminar, I introduced myself and nervously said something along the lines of, “I love what you do, how do you do it?” We both laughed, and she went on to become one of my mentors — conversations I value still to this day.
Frequently Asked Questions
Employee tuition reimbursement is a common part of company benefits. Reach out to the human resources department at your company to ask about tuition remission policies.
MBA costs range from $40,000-$150,000. Exact MBA costs vary depending on tuition and the availability of financial aid. Students considering an MBA should carefully weigh that cost against their career opportunities and potential future earnings.
For many business students, an MBA pays off. According to PayScale, the average MBA graduate earns a salary of about $90,000 per year.
Genevieve Carlton holds a Ph.D. in history from Northwestern University. After earning her doctorate in early modern European history, Carlton worked as an assistant professor of history at the University of Louisville, where she developed new courses on the history of science, Renaissance Italy, and the witch trials. Carlton has published five peer-reviewed articles in top presses and a monograph with the University of Chicago Press. She also earned tenure with a unanimous vote before relocating to Seattle. Learn more about Carlton's work at genevievecarlton.com.
Header Image Credit: mapodile | Getty Images
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