The cost of an MBA – myths and reality
Business schools charge high tuition fees, because of the quality of education and the good return on investment (ROI). However, it is not true that MBA studies are unaffordable and here is why.
The range of MBA tuition fees is quite wide. There are offers around the 100,000 Euro mark and, at the other end of the scale, the 10,000 Euro mark in tuition for the full course of MBA programmes. The average tuition fee of top European MBAs is no higher than 50,000 Euros. MBA programmes are targeted at professionals with several years of work experience. In financial terms, this means that these people have their own earnings, access to various loan opportunities, prospects for employer support and possibly savings. All these are typical sources that help cover the costs of an MBA.
Many business schools offer scholarships and other types of financial aid – such as assistantships, stipends. Grants from organisations can also be used to pay for MBA studies. Grants can be provided through the business schools or from other organisations such as foundations, governments and international organisations.
Through making the most of all these types of sources, MBA students are able to reduce their own investment in an MBA to very reasonable and affordable amounts. It just takes time for research and investment in preparation to meet the requirements.
Types of MBA scholarships
Francesca Di Meglio states in a Bloomberg article:
Most people know all about undergrad scholarships, but they don’t realize that there are merit-based scholarships for MBA applicants, too—and they are not as hard to get as you might imagine.
Scholarships have different eligibility requirements. They are determined by the business schools or by their donors. For business schools, scholarships are a great tool to attract and keep in their MBA class students who will contribute to the quality of the learning environment in the programme and to the brand of the school in the long term.
The requirements depend on their priorities to attract a certain profile of candidates. There may thus be scholarships based on nationality, country/region of residence (First Nationality Scholarships), gender (scholarships for women in business leadership roles), professional focus (entrepreneurship, innovation, social entrepreneurship, community service) and, of course, leadership potential and academic merit.
What is a GMAT scholarship?
GMAT scholarships, as the name suggests, require applicants to have achieved a certain score on the Graduate Management Admission Tests to be eligible to apply. Some business schools reward a higher GMAT score with a higher scholarship amount. Others have just one GMAT level and a fixed scholarship amount.
GMAT scholarships enable business schools to attract highly skilled applicants in terms of quantitative and analytical work, which is the everyday routine of senior business managers. Higher GMAT scores also raise the average GMAT score of the incoming class. This matters in MBA accreditation, and the business schools' selectivity rate. These factors ultimately ensure better quality of the student body and a more demanding and enriching learning environment.
How to apply
Some business schools have the so-called GMAT guaranteed scholarships policy. This means that, if you are admitted and have a certain GMAT score, you will automatically get a scholarship. The amount can depend on the GMAT score – the higher the score, the higher the scholarship.
The EDHEC Global MBA scholarship policy encourages candidates to perform well on GMAT and invites the possibility to retake in order to benefit from a scholarship upgrade.
In this case, for example, a GMAT score of 720 can bring down the MBA student’s fees to less than 20,000 Euros.
Other business schools combine the GMAT requirements with other factors according to the profile of applicants they would like to attract. For example, you may have a country/region of residence or gender as a requirement in addition to a certain GMAT score.
SDA Bocconi full-time MBA scholarships cover 100% of the tuition fee for candidates with an outstanding profile and a minimum GMAT score of 700.
What does all this mean to your preparation strategy for MBA application? If you want to apply for GMAT scholarships, you need a high score on the test. This may also apply to business schools providing other merit-based scholarships which take into consideration the GMAT score. So, it seems that preparing for the GMAT comes as a first step. Indeed, this is so because it is pointless to start school selection without having your actual score in mind. Of course, you can aim at a certain score, but there is never a guarantee that you will be able to achieve it within the timeframe and budget that you have.
So, it all boils down to these steps:
Step 1. Prepare for the GMAT. Start early and be committed. Anticipate time for additional preparation and a second try.
Step 2. When you achieve the highest score you can, start school selection. Allow enough time for research. This is an essential task that determines to a high extent your chances of admission. Select schools according to your career preferences, average GMAT score (yours should be a bit higher), and scholarship availability.
Step 3. Short-list business schools where you have realistic chances of admission and scholarship. Meeting the MBA admissions requirements is a priority. If you are not eligible for admission you will simply not have access to the scholarships. Then carefully look at all types of scholarships and their requirements. If it seems that there are more than one funding opportunity, contact the admission office for advice on whether you can apply for several and whether you can be awarded a couple of scholarships. If you have to choose only one of the scholarships, ask for advice on which one you match best.
Step 4. Send an official GMAT score to the short-listed b-schools.
Step 5. Start working on your application early so that you can really craft a highly competitive package.
Step 6. Consider working with an MBA admissions consultant or a coach on your application package for admission to ensure outstanding presentation of your potential. MBA consulting, like GMAT preparation, requires an investment, but when it pays off with admission and a scholarship to your dream MBAs, it is worthwhile. Competition for scholarships is tough, as you can imagine. Merit scholarships not only leverage your investment and increase your ROI, but bring you prestige beyond business school.
There is also a great opportunity to win a 25,000 USD MBA scholarship by just taking a GMAT simulation test. This opportunity is provided by the Brightest Minds Scholarship Contest of The Economist GMAT Tutor. However, first check out the list of participating business schools for which you can use the scholarship. Identifying the right MBA programme that fits your future career goals should always be your first priority.
A high GMAT score opens many doors
In addition to the opportunity to win a merit scholarship, achieving a high GMAT score has other positive implications for business school and your post-MBA career.
A high GMAT always makes a good impression on the admission committee and focuses their attention on what else you can offer the school. Although the GMAT is just one of many factors for admission, a high score helps.
- Assistantships and other financial aid
A GMAT score can also be required for other types of financial assistance provided by business schools. In addition to the scholarships already mentioned above, there are options like work on campus (assistantships). To be eligible you need to show potential for academic success during the programme, as evidence that part-time work on campus will not hinder your studies. Your GMAT is one such predictor of success, as it assesses the skills that that are vital during the studies.
The skills that you improve during your GMAT preparation, and that lead to a high score, will help you be successful during your MBA. However, they go beyond this, as they are all transferable to the everyday work of the business leader and senior manager you aspire to be.
- Job prospects
GMAT skills, as well as a scholarship award, can give additional weight to your job application, especially when competing for a management consulting job with the world’s top companies.
So, there is nothing to lose if you invest in achieving a high GMAT score. The stakes are really worthwhile – admission to a leading international MBA, merit scholarships and better job prospects.
If you make your school selection wisely, even a GMAT score of 650 can win you a free-tuition MBA ride.