Knowing how to handle money is never a bad skill. Business knowledge is useful in government, nonprofit and startup work, not just in banking or finance. However, graduate programs are a big investment. To offset the cost of gaining an MBA, graduate business schools should consider financial incentives for students who aren’t going into high-paying consulting or investment jobs.
Earlier this month, Arizona State University became the first school to make its full-time MBA program completely free to its students. This was made possible through endowments from alumni, similar to the way money is raised for a new building or facility. Arizona has proven that financial breaks for students are attainable.
Making professional programs like MBAs more affordable, or even free, allows students to consider more options related to public service and social work, thus drawing more business talent into these important fields.
“I think that [ASU’s free tuition] would attract someone to a job that wouldn’t pay as much,” first-year MBA student Jorge Martinez said. “I think a lot of people, once you secure an internship in banking, are just like ‘I’ve got to survive’ — you can get a $50,000 signing bonus, plus your year-end bonus plus your salary.”
Arizona State had an in-state tuition rate of $54,000, and an out-of-state rate of $87,000. Attending the program, and programs like it, would require taking time off of paid work and acquiring student loans, which are the main form of financing for graduate students. With some government workers pulling in as low as $24,000, it makes sense that students interested in these jobs would enter a more profitable career like investment banking or consulting, or avoid an MBA altogether.
Stephen Sweeney, the admissions director for McCombs’ full-time MBA program, said the UT Board of Regents tries to keep comparatively low tuition rates to allow a large return on investment even with lower-paying entrance jobs.
“What we obviously don’t want as an industry, generally speaking, is the degree not to be affordable so they can’t take a salary that is less than six figures,” Sweeney said. “They wouldn’t be able to pay off their debt [otherwise.]”
Graduate programs already raise money for school trips, scholarships, and new facilities. Schools know how to raise money, so they should consider using this money to reduce financial risk for incoming students. By separating an MBA from the idea of needing a six-figure job to pay it off, graduate schools can open up their programs to diverse applicants who will use their business knowledge outside of the realm of Wall Street.
Hallas is a Plan II and human development freshman from Allen. Follow her on Twitter @LauraHallas.