A brief look at MBA DecisionWire appears to indicate that more and more leading MBA programs are offering scholarship money, either need-based or merit-based, to encourage admitted candidates to enroll. This may be the result of competing for a smaller pool of top applicants amidst declining application volume (particularly in the USA and Europe).
This scholarship money reduces the price of the MBA, and therefore alters the calculus in terms of the cost-benefit analysis of the program. If you do have admissions offers from multiple programs, some of which include scholarship money, you will need to weigh whether the reduced cost alters your order of preference for schools.
Cases where scholarship dollars can alter your order of preferences include:
- Career Goal Impact: When your career aspirations, both short-term and long-term, are not impacted by choosing the program that would be from a lower-tier. For example, you are not seeking a career in consulting at the elite consulting firms, which generally focus their recruiting at the very top schools. Nor are you seeking opportunities in private equity and venture capital – jobs in this field are scarce and very much limited to top schools with strong networks in the domain. Perhaps you know where you plan to be post-MBA regarding geography, and the school that is offering you scholarship has a significant alumni presence in that region which would facilitate achieving your goals.
- Scholarship Prestige: The scholarship award is prestigious at the school, and offers you opportunities at that program that are not available to the general student body. For example, you may have access to a special mentor program. A ‘named’ scholarship is also something you can place on your resume, helping you to stand out from other students at the school. These advantages might be enough to sway a decision in favor of a lower-tier program, but they are only really compelling if your recruiting goals are not geared towards the firms that concentrate their hiring at the very top programs, as noted above.
Fundamentally, it is important to weigh a scholarship offer from both a short- and long-term perspective. While it might be compelling in the short-term to graduate from your MBA program with $100,000 less in debt thanks to a scholarship, that $100,000 in savings, discounted over a 40 year post-MBA career, may be small compared to the better career opportunities afforded by a more prestigious MBA program. This is exponentially more important when your career goals are targeting the high-paying careers of consulting, banking and tech – not to mention that those jobs often come with significant signing bonuses which can instantly help with some of those tuition loans. However, if your career is targeted to social impact and non-profit, and other careers that generally don’t pay as high a salary, the value of the scholarship, and reduced debt upon graduation, is more appealing.
Finally, if you are an international student, you need to factor in your desire to remain in the country or region of your MBA program, and how important that is, based on your potential to earn the same salary in your home country. A number of international students are using the MBA to help them relocate, but given the current immigration environment, the potential for doing this may be more limited. A scholarship, lowering the cost of the MBA, reduces the risk to the student who has to return to their home country upon graduation. The counter argument is, the more prestigious the MBA program to which you gain admission, the greater your opportunity of getting an offer that allows you to remain in the country of the MBA.
Overall, it can be tempting to jump at a substantial scholarship – especially when the loans one takes for an MBA program seem truly daunting. But in the end, just as with investing in the stock market, a long view is needed when computing the true value of such scholarships.