Why MBA Tuition Keeps Rising
It’s all about operating costs: rising faculty pay and competition among schools to offer students a wide range of amenities.
Illustration: Raven Jiang for Bloomberg Businessweek
An MBA is a pricey piece of paper, and every year more than a few applicants have to weigh a difficult choice: paying full freight at a more prestigious program or taking advantage of cheaper tuition—or even a full-ride scholarship—at a less prestigious school. Tuition for many MBA programs in the US is going up. In just the last four years, tuition at programs ranked by Bloomberg Businessweek increased an average of 11%. Tuition increased 20% or more for four programs that participated in the last four rankings.
Rising tuition costs are neither new nor unique to business schools, of course; the trend has been a concern across US higher education for decades. It’s a symptom of a more fundamental issue: The operating costs that underlie tuition are also perpetually increasing. According to the Higher Education Price Index (HEPI), post-secondary operating costs have outpaced inflation since at least the 1960s.