How Much Does a Traditional MBA Cost?

Many prospective students often get deterred from doing a traditional MBA due to the additional costs that come with this program. If you’re facing the same dilemma, and have been wondering, “How much does a traditional MBA cost?“, you’re in the right place because we will offer you some clarity.

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How Much Does a Traditional MBA Cost?

According to the Education Data Initiative, the average cost of a traditional MBA is $59,684. In most cases, this is a way more expensive option than other master’s degrees. However, this number generally factors in tuition, fees, living expenses, healthcare, and textbooks and supplies for the two-year program.

While the sticker price for an MBA tuition tends to be higher than other degrees, it largely depends on your choices too. For instance, an MBA from Harvard Business School will cost you around $74,910 per year, while the same degree from Missouri State University comes in at a much more pocket-friendly $16,100 per year for in-state students.

Is the Cost of an MBA Program Worth it?

For many students, an MBA program is the gateway to high-level positions and bigger paychecks. In a 2023 survey by the Graduate Management Admissions Council (GMAC), around 82% of employers expressed that business master’s grads are better suited for most positions. It also revealed that the starting salaries for MBA graduates are way higher than those with bachelor’s degrees.

Yet, not every employer will demand an MBA degree, especially in non-profit and marketing organizations. In such cases, you may opt for a more targeted master’s in your specific field. For example, specialized degrees in healthcare administration, business analytics, or a master’s in the supply chain may serve as excellent alternatives to traditional MBAs.

How to Pay for an MBA Program

Most students no longer pay for the degree with their own pockets. Before you find yourself stuck with the expenses, it’s wise to explore your options to help you pay for it, especially the FAFSA.

Once you fill out the FAFSA, the state governments and universities can determine how much aid you’re eligible for. The form factors in your personal and family income, and helps you pay for your college expenses accordingly.

Scholarships and Grants

If you’re looking for ways to fund your MBA degree, grants and scholarships might be your best bet. Unlike most loans, aid money from scholarships and grants doesn’t have to be paid back. Both private organizations and governments offer these based on factors like your academic achievements and financial situation.

Your school’s financial advisor can guide you towards the scholarship opportunities that suit you best. Alternatively, you may turn to fellowships, which cover tuition and provide mentorship and job prospects. Your desired college may often provide full-ride scholarships, too, depending on your academic record, financial needs, work experience, and career goals.

Exploring grants at the state level and scholarships from private organizations ahead of time is a smart move. Luckily, there are plenty of scholarship search engines to help you identify funding opportunities that best align with your background, budget, and career aspirations.

Student Loans

If you run out of free funding options, you can still turn to student loans to fund your MBA degree. According to the Education Data Initiative, 51% of MBA degree holders have student loan debt to be repaid.

This means that it’s not uncommon for students to rely on loans, particularly Direct Unsubsidized and Grad PLUS loans, with fixed interest rates and flexible repayment plans.

If you have a solid credit score, you might even secure lower interest rates on private student loans. However, it’s worth noting that federal student loans are a safer bet than private ones, with the former providing greater flexibility, multiple loan forgiveness, and deferment options. So, it’s better to check scholarships and grants before exploring loans that are available to you.

Employer-Sponsored Aid

Many employers and workplaces are quite generous when it comes to sponsoring MBAs for their employees. For instance, big names like Apple, Microsoft, Amazon, and Intel offer various tuition assistance programs so you can pursue your master’s without being drained financially.

However, employer-sponsored aid is mostly a two-way street. To put this into perspective, you’ll likely have to commit to sticking around at the company for a set period after you graduate. Plus, there might be caps on how much aid you can receive.

While it sounds like a great deal to pay for your MBA program, don’t forget to check out your employer’s terms beforehand. This way, you stay clear on the terms, which can help you decide whether an employer-sponsored MBA is worth it.

Work-Study Programs

Another excellent choice to ease the financial burden when pursuing an MBA is to turn to work-study programs. Depending on your financial need, work-study programs offer you the chance to work part-time while still pursuing your MBA degree. This helps students cover both school-related and everyday expenses.

Even better, these work-study programs align with your field of study and help you build valuable networks within your domain. Being an MBA student, the most popular work-study program opportunity for you is to serve as a teaching assistant in your current university.

This way, you can work closely with your professors while earning a paycheck that takes care of your college expenses.

Factors That Affect the Cost of an MBA

While the average annual fee of a traditional MBA typically lies between $20,000 and $80,000, many other factors go into the hefty price tag. These factors include your MBA program type, duration, school type, and living expenses while pursuing your degree.

To decide whether pursuing an MBA is the wisest decision, it’s important to consider all the factors involved. Oftentimes, these factors may quickly add up to a huge sum, which can ultimately lead you down the road of student debt. So, let’s take a quick look at the most critical factors that affect the cost of an MBA program:

Program Type

When enrolling in an MBA program, deciding between full-time and part-time programs might be the first thought that comes to your mind. For instance, opting for a full-time, in-person MBA program usually means investing significant time and money. There are also traditional MBA programs that are comparably more affordable than others.

A full-time MBA requires you to pay for things like room and boarding, or maybe even relocating. The hard part? It comes at the cost of not working during that time. Depending on where you go, your lodging and food expenses can quickly add up to your total MBA bill. So, it’s important to consider the program type and check if it aligns with your goals.

Duration

Similarly, the length of your MBA program largely determines the price you pay for the degree. When picking an MBA, think about how long it’ll take, then set up a budget accordingly.

Although traditional MBA programs typically last for about two years of full-time study and require 30 to 60 credits, there are speedier options out there, too. For example, some schools offer accelerated tracks to get you an MBA degree within a year. These programs can save you significant money on your tuition, fees, and living costs.

The best part? In addition to minimizing your tuition costs, shorter programs let you enter the workforce sooner than traditional ones.

School Type

The type of school you choose to pursue an MBA program also affects how much you’ll pay for it. Private institutions often come with heftier price tags compared to public schools, especially for in-state residents who pay the lowest tuition rates at public colleges.

On the contrary, out-of-state students may have to bear heavy costs when attending public colleges. When the already higher tuition price tag is combined with living and food expenses, the total costs of the entire MBA program might really end up breaking the bank.

Additionally, prestigious programs or those with extra perks tend to cost even more. Especially if you’re planning on attending a highly-ranked university, make sure you’re ready to spend big. Or, explore your funding options well before time so that the cost of an MBA doesn’t hold you back.

Living Expenses

If you’re an out-of-state student, you’ll need to factor in living expenses when making a financial plan for the degree. The financial plan should allocate a sufficient budget for housing, utilities, groceries, transportation, and other personal expenses.

In addition, it’s important to note that your living costs may depend on where your MBA program is located. For instance, urban areas or regions with a high cost of living will naturally burden your wallet more than more affordable locales. It’s wise to research the cost of living in your program’s area to avoid any surprises down the road.

What to do with an MBA

“What can I do with an MBA degree?” Believe it or not, many prospective students and graduates ask this question. Well, the good news is that an MBA serves as the gateway to a myriad of fulfilling career opportunities. Here are some of the most popular ones:

Human Resource Manager

Human resource managers are responsible for hiring, firing, training, and development of employees within a company. They also plan and organize tasks related to the personnel, often creating harmony among the employees. Plus, they bridge the gap between management and employees.

• Annual Median Salary: $86,139 per year
• Growth: Projected to grow 5% from 2022 to 2032

Chief Executive

An MBA prepares you to take up top-level management positions within an organization, such as the CEO. Chief executives are responsible for setting up and executing business strategies. They join hands with the board of directors to monitor different aspects of operations within a business.

• Annual Median Salary: $160,871 per year
• Growth: Projected to grow 3% from 2022 to 2032

Financial Analyst

Financial analysts assess financial data to guide investment decisions for a business. They oversee economic trends, industry conditions, and company performance to provide recommendations on stocks, bonds, and other investments.

• Annual Median Salary: $86,082 per year
• Growth: Projected to grow 8% from 2022 to 2032

Operations Manager

Operations managers of an organization manage resources, optimize processes, and coordinate with cross-functional departments to make sure business goals are met. They also develop and implement strategies to improve productivity within an organization.

• Annual Median Salary: $120,917 per year
• Growth: Projected to grow 4.2% from 2022 to 2032 

Project Manager

Project management is yet another lucrative path you can pick after an MBA degree. Typically, project managers define project objectives, create schedules, and allocate resources to guarantee timely delivery within budget constraints.

• Annual Median Salary: $98,839 per year
• Growth: Projected to grow 6% from 2022 to 2032

Related Questions

Is an Online MBA Cheaper than a Traditional MBA?

While the total tuition fees for on-campus and online MBA programs are often similar, some online MBA programs offer discounts. Typically, these schools cut rates for online students to toss out out-of-state tuition rates. Also, online learners save on campus expenses and often have the liberty to keep working as they study.

How Long Does it Take to Complete a Traditional MBA?

Traditional MBA programs usually require 30 to 60 credits, which generally requires full-time study or one accelerated year. If you plan to pursue a part-time MBA, you may need to invest three or more years to complete the degree.  

Is an MBA Program Worth it?

For most students, an MBA is worth the investment. Despite the high costs of attending a college for an MBA program, the potential payoff does appeal to many students. Last year’s GMAC recruiters survey found the median starting salary for recent MBA graduates stands at $125,000 per year.

Conclusion

When planning on pursuing a traditional MBA degree, weigh the costs against the benefits well beforehand. Don’t just look at the program fees; factor in hidden expenses like living costs, transportation, textbooks, and supplies. If the program still aligns with your goals and budget, it’s worth the shot!