There may come a time in the not-too-distant future when the cost for a full-time, two-year MBA exceeds $200,000 at every one of the top 25 business schools in the United States. 2021 was not that time. But just a year after the onset of the worldwide pandemic that thrust the world of graduate business education into a chaotic reset from which it has yet to fully emerge, we got a bit closer.
The cost of an MBA — including two years of tuition, plus the host of fees charged by most schools for things like computers and MBA cases and transportation and health insurance, as well as estimated living expenses — is past the $200K threshold at 14 B-schools in 2021, up from 13 schools last year, 12 in 2019, and nine in 2018. Looking at the entire top 25, where total cost increased at all but three schools, the average price tag of an MBA is now $199,544.
Exorbitant? Perhaps. But let’s not leave mitigating factors out of the conversation. For one thing, there’s ROI: An MBA from a reputable, ranked business school is still a ticket to a higher socioeconomic berth. (See here as well as the links to this year’s employment reports at the bottom of page 3.) Additionally, most schools — even the elite of the elite ranked 1 through 10 — offer handsome scholarship packages to a wide range of students, helping to offset (or offsetting entirely) the high price of the degree and the living expenses required to get it. More on that below.
A NEW MOST EXPENSIVE MBA PROGRAM: NYU STERN
Total cost includes books, transportation, room and board (housing and food), tuition and fees, health and other insurance, “personal expenses,” and more. There are always a lot of asterisks and fine print. There's also the fact that married versus single student costs can be much different — see the next page for an exploration of that reality.
Overall, the average cost to attend a top-25 MBA program in the U.S. for two years is now just shy of $200,000, up $4,128, or 2.1%, from $195,416 last year. In 2020, the cost rose a mere 0.7% from $194,031 in 2019 — which, however, was a rebound from the period between 2018 and 2019, when the average actually decreased by 1%. (The average total cost at the top 25 in 2018 was $196,067; in 2017, $185,747.) So when it comes to how much new MBA candidates are paying to attend an elite U.S. B-school, a worldwide pandemic didn’t help their wallets, despite the mostly online delivery of many programs in 2020, a reality that persisted in some hybrid programs this year.
Last year's (and 2019's) most expensive MBA program, at MIT Sloan School of Management, slipped to fifth this year, one of only two top-10 B-schools (and just three in the top 25) to see a decline in overall cost — and by far the biggest decline of the three, down $5,696, or 2.4%. That helped NYU Stern School of Business, runner-up to MIT the previous two years, roar into the top spot, with an overall cost of $243,082 for two years of tuition, living expenses, and fees. Stern was followed by Stanford Graduate School of Business ($239,928), Dartmouth Tuck School of Business ($237,630), Columbia Business School ($237,554), and MIT ($235,996). Of the 14 schools now in the $200K club, the newest member is Cornell Johnson Graduate School of Management, where cost increased about 2% from 2020 to $203,370. Three more schools are knocking on the door with costs in the $195K range; see page 3 for details.
The Sloan School may not have the most expensive MBA overall this year but it still carries the biggest tuition price tag, at $78,954 annually, about $250 more than NYU Stern. In third place is Dartmouth, at $77,520, followed by Columbia ($77,376) and Northwestern Kellogg School of Management ($76,368). MBA tuition rose at 16 of 25 schools this year.
HOW MUCH YOU CAN EXPECT TO PAY
Cornell is the newest member of the $200K club but it is not the school with the biggest jump in cost this year. That distinction occurred at UCLA Anderson School of Management, which charged 8.5% more in 2021 than 2020, for a total of $227,786, seventh-most expensive. The school with the biggest cost increase over five years is UC-Berkeley Haas School of Business, where cost grew by $37,848, or 20.6%, to this year's $221,190.
In all, 22 schools increased their costs, and three decreased them. Those that were up, were up an average of $5,081, or 2.5%. Overall, the average total cost to get an MBA from a top-25 school grew to $199,544 this year from $195,416 in 2020, $194,031 in 2019, $196,067 in 2018, and $185,747 in 2017.
In the top 10, eight schools were up an average of 3% this year, or $6,449, with the biggest jump occurring at Dartmouth Tuck, which increased cost by $13,630, or 6.1%. Overall, the average two-year cost at a top-10 school is now $228,284, compared to $223,750 in 2020 — up $4,534, or 2.0%.
Interestingly, tuition in the top 10 actually declined, with the average slipping to $75,560 from $75,808, a difference of $248, or 0.3%.
7 SCHOOLS SAY NO INCREASE IN COST OF LIVING SINCE 2020
More numbers: Eight B-schools froze MBA tuition this year, including Harvard Business School for the fourth straight year, while two schools — UNC Kenan-Flagler Business School and the University of Washington Foster School of Business — raised it by negligible amounts. UC-Berkeley Haas had the biggest tuition increase, a $3,373 (4.9%) increase to $71,817. Seventeen schools have tuition rates of $70K or more, up from 15 in 2020, 13 in 2019 and nine in 2018. Sixteen schools have seen double-digit percentage increases in the five years since 2017.
In room and board estimates, seven B-schools posted the same numbers as last year, meaning they judge no increase in the cost of living to have occurred, while three actually reduced their estimates. The biggest increase came at UCLA Anderson, which bumped up its room and board estimate by nearly 17%, or $3,600, to $25,200 annually.
What about Europe? The top European B-schools are nowhere near as expensive as their counterparts in the U.S. At HEC Paris, total cost for the 16-month MBA is approximately $116,500 (by current euro-to-dollar exchange rates). The 10-month MBA program at INSEAD, also in France, charges $134,606; London Business School charges $129,914. Including the top Spanish schools of IE and IESE, the average for the five schools is $113,544.
COST OF LIVING: ACCURATELY CALCULATED?
B-schools’ calculation of living expenses in their total cost estimates is a source of ongoing debate. Most B-schools’ estimates of annual living expenses are far below realistic, particularly for schools in New York, Los Angeles, Philadelphia, Chicago, or the Bay Area of California.
For example, NYU Stern — the most expensive MBA program in the U.S. in 2021 — says its MBA candidates should budget $27,420 (up a fraction from last year’s $26,804, and barely up at all over the last few years) for nine to 10 months in New York City, a town where the average rent for a one-bedroom apartment, according to Numbeo, is more than $3,000 per month, on top of which you must add around $1,400 for food and the occasional item of clothing or night out (socially distanced, of course). Columbia, in the same town, is worse, budgeting only $24,822 (unchanged from last year). Across the country, Stanford is a bit more realistic about the cost of living in pricey Palo Alto, budgeting a “living allowance” of $34,806 — but consider that the average cost of an 800-square-foot studio anywhere in the vicinity of Stanford’s campus is around $3,000 per month. And again, ya gotta eat.
Stanford doesn’t have just one number that it applies to all students’ situations. Rather, the school indicates that married students should budget a yearly living allowance of $57,774 (up from $55,929 in 2020). Which is great — until you realize that by doing so, your total cost to attend GSB has ballooned to $288,084 over two years. No matter where you plan to apply, read the fine print: Further down the rankings, Indiana University’s Kelley School of Business has widely disparate cost estimates for in-state versus out-of-state residents, with Indiana residents charged $28,143 in tuition, a little more than half what everyone else pays: $52,483.
See the next pages for tables containing all the cost information on the top 25 U.S. B-schools, including breakdowns by tuition and room & board.
A HELPING HAND
An MBA from a top school, as we well know, is not cheap. Six years ago, the average total cost to attend one of the programs in the charts below was about $168,000. Now it has grown nearly 19%. Fortunately, financial aid is available for an increasing number of MBA candidates.
At Stanford GSB, the average fellowship is about $42,000 per year or $84,000 in total awards; at Harvard, where 50% of the MBA class is eligible for assistance, it’s only slightly less: $40,000 per year, or $80,000 total. UCLA Anderson has hundreds of scholarships, grants, fellowships, and awards; UC-Berkeley annually spreads millions around its relatively small MBA cohort. At MIT Sloan, last year's most expensive school and still the B-school with the highest tuition at nearly $80,000 per year, there are literally dozens of fellowships available, most of which don’t even require an application: students are automatically considered for them.
And at NYU Stern School of Business, the school that in 2021 charges more for an MBA than any other, about 20% to 25% of admitted full-time two-year MBA students receive a merit-based scholarship, the majority of which are full- or half-tuition awards. All applicants, domestic and international, are considered.
Beyond scholarships, there’s the fact that an MBA continues to be a reliable magnifier of salary potential. A survey this year by the Graduate Management Admission Council shows that the median MBA salary for 2021 is projected to recover to its pre-pandemic 2020 level of $115,000 — which translates to a 77% advantage over those with a bachelor's degree ($65,000) and 53% edge over those hired directly from industry ($75,000). The schools with the best ROI and starting salaries? According to a 2018 P&Q analysis, it’s all the ones you see in the chart below. For more recent statistics, see our latest reporting on jobs reports: At Northwestern Kellogg, total compensation for Class of 2021 MBAs grew to $175,800 this year; at Virginia Darden, average starting salary grew $4,988 to $144,933, a 3.6% increase. Over the past five years, base salaries for Darden MBAs have risen by over $22,000.
AND DON'T MISS OUR COVERAGE OF THE JOB PROSPECTS FOR THE MBA CLASS OF 2021:
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