If you have aspirations of leading a company or serving in senior management, a master’s of business administration (MBA) degree can help you achieve your goal. An MBA can be a worthwhile investment. According to the Graduate Management Admission Council (GMAC), individuals with MBAs earn millions more than their peers over the course of their careers.
However, an MBA can be expensive; depending on the program, you may have to spend $150,000 or more to earn your degree. Learn about typical programs and the factors that affect MBA costs so you can decide if this degree path is right for you.
Average Cost of an MBA Degree
When it comes to the cost of an MBA, prices vary a great deal. On average, an MBA program costs $66,340. However, there is a significant difference in pricing between universities. Depending on where you go to school, your degree could cost anywhere from $55,000 to over $160,000.
What Factors Affect the Cost of an MBA Degree?
MBA costs vary a great deal; the total price of your degree is dependent on several factors:
- Prestige: MBA programs at well-known, Ivy-League universities or highly-ranked business schools tend to be significantly more expensive than other options.
- Type of University: MBA programs are available from both public and private schools. If you attend an in-state public school, your program will likely be much less expensive than a program at a private university.
- Student Status: Programs allow students to choose their own status; MBA programs have options for both full-time and part-time students. You can attend an MBA program full-time to earn your degree as quickly as possible, or you can opt for a part-time program that allows you to work while earning your degree — which may reduce the need for student loans. In general, full-time programs tend to cost more than part-time programs.
- Program Timing: A typical MBA program takes two years to complete for full-time students. However, there are some accelerated programs that allow students to earn their MBA in just 12 months. While you can get your degree faster, accelerated MBA programs tend to have higher costs per year than traditional programs.
- Online vs In-Person: Today, MBA programs are available in-person or online. Online programs are usually similar in cost in terms of tuition and fees, but you can save money on other costs, such as room and board.
Online vs. In-Person MBA Costs
Online programs are increasingly popular because of their convenience and accessibility. However, you may be surprised to find that online MBA programs aren’t much cheaper than traditional MBA programs. The average cost of The Princeton Review’s selections for the top 15 online business schools was $75,806.
However, the overall cost of an online program may be less expensive than in-person programs due to the other expenses you’ll save on:
- Room and Board: Since you can take all of your courses online, you won’t have to move to another state or city to complete the program. You can stay home — and prepare your own meals — which can reduce your expenses.
- Transportation: With an online program, you don’t have to worry about commuting to class or using public transportation.
- Childcare: If you decide to pursue an MBA through an online program, you have more flexibility over your schedule. That benefit can make it easier to manage childcare costs.
Plus, the greater flexibility may mean you can continue working while you’re in school. With a steady income, you may be able to cover some of the education costs out of your paycheck.
Remote students don’t have to move to another state while they pursue an MBA, and they don’t have to cover the cost of room and board or transportation.
Top-Ranked MBA Program Costs
Where you go to school to earn your degree is the biggest factor affecting your MBA costs. Top-ranked business schools can be very expensive; many programs cost well into the six-figures. Consider these costs for the top three business schools in the country, as ranked by U.S. News:
- Wharton Business School (University of Pennsylvania): Wharton is a private business school rather than a public university. The two-year Wharton MBA program costs $150,500 (tuition only).
- Chicago Booth (University of Chicago): $155,682 (tuition only)
- Northwestern University Kellogg: Depending on the program, $157,578 to $208,744 (tuition only)
- Stanford University: $153,900 (tuition only)
- Harvard University: $146,880 (tuition only)
As you can see, these programs are more than double the national average cost for an MBA. However, the expense may be worth it for some students looking to work for big-name companies and consulting agencies. Carefully weigh university costs against your career goals and your ability to cover the expense.
How to Pay for an MBA
Before taking out student loans to cover your MBA costs, make sure you explore all of your financing options:
- 529 Plans: A common misconception is that 529 savings plans are only for undergraduate degrees. But you can use a 529 plan to cover some or all of your MBA costs, and distributions for qualifying expenses are tax-free.
- Scholarships and Grants: Many people don’t realize it, but there are thousands of scholarships for grad students available. Some MBA programs offer scholarships and grants based on financial need, academic merit, or both. MBA students can also apply for external scholarships and grants to help cover the cost of their degree.
- Fellowships: Like scholarships, fellowships are available to students based on merit, such as academic or professional achievements. Depending on the award, fellowships can cover some or all of your tuition.
- Employer Assistance: Many employers offer tuition reimbursement programs to their workers to encourage employees to pursue higher education. With these programs, your employer contributes money — up to a specified maximum — toward your tuition. According to the Society for Human Resource Management, 47% of employers offered tuition reimbursement, and 8% offered student loan repayment assistance.
- Federal Student Loans: As an MBA student, you may be eligible for federal student loans. MBA students can qualify for Direct Unsubsidized and Grad PLUS Loans to pay for school. To qualify, fill out the Free Application for Federal Student Aid (FAFSA).
- Private Student Loans: If you aren’t eligible for federal financial aid — or need more money than the government will lend you — private student loans can cover your remaining costs. ELFI’s graduate school loans allow you to borrow up to the total cost of attendance, and you can have up to 15 years to repay the loan.
When considering the cost of an MBA, keep in mind that you may not have to cover the entire expense out of your own pocket; you may be eligible for gift aid, fellowships, or employer assistance programs that make it more affordable. And with federal and private loans, you may be eligible for low-interest financing options.
Repaying Student Loans After Your MBA
How long does it take to repay student loans? Depending on the type of loans you have and their interest rates, it can take 10 to 30 years to pay them off.
To pay off your loans faster, use these tips:
- Take advantage of employer student loan repayment assistance programs
- Pay more than the minimum required
- Put windfalls toward your balance
- Consider student loan refinancing
Particularly if you have high-interest private student loans, one of the best ways to repay student loans is to lower your student loan interest rate by refinancing. You’ll save money on interest charges, and refinancing can help you get out of debt faster.
Use the student loan refinancing calculator to find out how much money you can save by refinancing your loans.
Apply for Private Student Loans With ELFI to Pay for Grad School
MBA costs are dependent on the program you choose and the university you attend but tend to be more expensive than other graduate degree programs. However, there are several ways to finance your MBA, such as scholarships, fellowships, employer assistance programs, and student loans. If you need to take out a loan, you can use ELFI’s rate check tool to view your loan options without affecting your credit score.
