Cost of an MBA

Acquiring an MBA is an expensive process. There is virtually no way around paying a great deal of money for an MBA degree. Although the costs vary greatly depending on the quality of the program, its type (online, part-time, or full-time), and the city where it is located, there is no such thing as a cheap MBA school. Few would deny, however, that an MBA is a sound investment. Studies show that an MBA can be worth an initial bump in salary of at least $10,000 a year over a bachelor’s degree, with many MBA-holders earning a salary hike of $30,000 or more. Over a lifetime of work, the costs of attending an MBA program can be defrayed by salary and benefits and earned back many times over.

Consider a typical full-time MBA school program. Tuition and fees, which often include health insurance and other expenses, can be as little as $10,000 but are more likely to run $50,000 to $75,000 a year, based on two semesters of four and a half months each. This does not include housing which, depending on the city, can easily cost $25,000 a year. Books are not included in tuition and fees and can run more than $1,000. And none of these prices factors in living expenses like food, commuting, car payments, and the like. Some of the costs can be minimized. By staying close to home and living with a relative, for example, a student could eliminate housing fees over the life of the program.

Part-time programs can be cheaper for several reasons. Part-time students often pay for courses on a per-credit basis and over the life of a program may save $5,000 or so on tuition. Too, many students take part-time programs while they work, so they are able to pay at least part of their tuition out of pocket rather than borrowing money and paying interest on it.

Online courses generally are the cheapest option available. Such courses mainly are distributed online (although students may meet on campus for particular lessons, seminars, or to speak with professors and advisors), so the costs of presenting the class are much lower. No classroom need be scheduled, no utilities need be provided, and many other costs associated with brick-and-mortar learning no longer exist. This reduction in overhead allows a university to offer these courses at a significant discount–often near 50% per credit.

In short, it is possible to get an MBA by paying a little less than $7,000 a year for tuition. This does not include housing or necessary expenses, like books. On the other end of the spectrum, a couple of MBA programs now charge close to $100,000 for tuition and fees alone. The difference, of course, is in the reputation of the school. A school with a higher rank can charge more money, plain and simple.