Students at brick-and-mortar institutions spent an average of $140,000 to obtain an MBA degree in 2016 (Investopedia). This cost included tuition and fees, textbooks, living expenses and transportation. With so much money on the line, many students are searching for ways to save on their education costs. Given the potential reduction in tuition, time spent and transportation costs, some have turned to online MBA programs. The following guide helps prospective students learn about the costs associated with both online and traditional MBAs, and the pros and cons of each.
Between a nearly non-existent commute and the reduction of certain fees charged by a traditional institution, online MBA programs can be an excellent option for students looking to further their education. In addition, the flexibility offered by online courses gives busy professionals the opportunity to enhance their skills while still working. Some of the other cost-saving benefits of an online MBA include:
Online programs reduce the amount of time spent commuting as students can complete their degree from anywhere. This translates to lower transportation costs and more time for work, studying, and time with family and friends. Students can also choose to earn their MBA from any city they choose – possibly reducing the cost of moving to attend school. This includes the option of living where the cost of living is lower.
Unlike classes at a traditional MBA program, online MBA classes typically do not require students to adhere to a schedule. For working students, this affords students the choice to keep their full-time jobs and not take a reduction in pay or quit all together.
Online classes can be taken on your schedule at any time during the day, instead of having to attend classes on a firm schedule. There are no required times to log on.Chenelle Seraphin Lynn University
MBA students who pursue a full time MBA degree forfeit at least two years of income (Investopedia). Conversely, online MBA students can keep similar schedules and routines that they had before. While they have to take time for studying and exams, they can keep disruptions to their personal and professional lives at a minimum.
It’s no secret that university textbooks are expensive. While there are many ways to cut costs on reading materials in a traditional MBA program, online degrees have them beat. Many online MBA programs make reading materials available in a digital format. This significantly reduces, if not eliminates, the cost for traditional textbooks or school supplies.
The cost of pursuing an MBA goes beyond tuition. From activity to technology fees, compare the costs of the University of West Georgia’s online MBA program with their on campus option.
|Special Institution Fee:||$145.00|
|Special Institution Fee:||$145.00|
*Data pulled from the University of West Georgia’s AACSB-accredited online MBA program
Contacting a prospective school’s financial aid office before applying may help students save money on their education. A financial aid office can guide students through the FAFSA® process and help student identify scholarship opportunities. This is only one factor in an MBA degree cost. Find out other ways to cut expenses while attending school.
Returning to get an MBA may mean changes in employment, increases in child care costs, and other increased expenses. Before enrolling, experts recommend prospective students look at the school’s published tuition and add living expenses such as rent that can’t be changed. This is also a good opportunity to identify costs that can be cut – i.e. eating out, cable television, etc.
Students who contact the financial aid offices of prospective schools about three months ahead of applying can get an idea of scholarship opportunities and loan information. Financial aid offices can be a great resource for students to assess the total cost of an MBA degree. This gives students additional time to create a competitive scholarship application, write an excellent essay and score high on the GMAT.
Current MBA students and recent alumni are often great resources for those looking for ideas on how to finance their education. They can often clue prospective students into scholarship opportunities that are not well-publicized.
Not many can afford to pay for an advanced degree like an MBA degree with cash. That’s where organizations, companies, and the federal government can play a role. While some options may be obvious, find out a few other options that some may not consider.
Corporate Sponsorship: Working for a company that pays for an employee’s further education is a great benefit. However, as with any financial agreement, it’s important to find out the details of what is expected. Finding out how a company handles education assistance. Consider the following things: the formal proposal, performance expectations, alignment with career goals and possible tax implications.
Federal Loans: Those who received federal student loans, grants or work-study funds as an undergraduate are acquainted the Free Application for Federal Student Aid (FAFSA®) process. The same holds true for MBA students. Those who complete the form may be eligible for federally funded loans: the Stafford Loan and the Grad PLUS Loan. Stafford Loan recipients are limited to $20,500 per year while recipients of the Grad PLUS loan are eligible for up to the cost of their school’s attendance.
Private Loans: Whether the private loan is from a bank or a family member, students pursuing private loans may not have as much red tape to cut through. Similar to federal loans, bank provided student loans are generally not to start repayment until six months after graduation or if the student drops below half-time status. Unlike federal loans, the interest rate may be higher and income-based payment plans may not be available. These loans are not dispensed based on financial need as the loan amount varies depending on the student’s credit and cosigners.
Retirement Savings: This may be a tricky way to pay for an online MBA degree. However, for those who have saved aggressively, using money from a retirement savings account toward education may be an option. The Internal Revenue Service removes the 10% penalty for those who withdraw early for qualified education expenses. Word of caution: not all education-related expenses are considered a qualified education expense. Double check the IRS’ rules and regulations.
Scholarships: While many schools offer scholarships to MBA students, many organizations and outside companies offer funding as well. The secret? It’s not always well publicized. The trick to finding said scholarships is get specific. Look at organizations that offer scholarships based on gender, ethnicity, and citizenship. Other potential opportunities include organizations that work with the intended field of study or career path, undergraduate alma mater, schools you’re applying to, and any other clearly defined group to which you belong.
The pages below are guides to pursuing scholarship and other financial aid opportunities for online colleges, minorities, and women.
While online MBA degrees have the potential to save time and money, it differs from a traditional program when it comes to classmate interaction and learning style. Students may enjoy a shortened duration in the program as well as a reduction in transportation and textbooks. However, it requires students to be self-motivated an organized. And yet, some elements stay the same like the application process. Discover what one can expect from an online MBA program and what online programs are doing to build comradery among students.
The application process will look similar at the majority of online and on-campus programs because the many colleges now accept applications and documentation online (although some still require applications to be mailed). Regardless of the learning format, most colleges also require an application fee between $30 and $80.
One of the biggest deterrents cited by critics of online MBA programs is the lack of real-life interaction and the absence of social and academic clubs and activities. However, as online programs continue expanding and maturing, more and more are incorporate virtual programs to help students take on leadership roles, interact with classmates, and the opportunity to network. For example, students and faculty at James Madison University use Second Life to conduct office hours and hold meetings, open houses and club meetings.
Similar opportunities can be found at Lynn University’s online MBA: “We value small class sizes and interaction with professors and peers, and classroom discussions are forum-style, allowing students to contribute their thoughts and opinions on assignments and issues. They have the opportunity to learn from their peers on a daily basis,” says Seraphin.
Online MBA programs allow independent, self-motivated learners to work at their own pace and complete their reading assignments and projects. For a student seeking an accelerated pace, online classes mean they can complete their degree faster than if they were enrolled in a traditional MBA program. Lynn University representative Chenelle Seraphin echoes the notion, stating “online MBA programs work well for students who are self-disciplined. It’s up to them to make time in their schedule for participating in classes and completing virtual assignments.” Students who seek guidance and need enforced timelines may struggle to stay current in such an environment.
Because the bulk of online MBA classes do not require students to login at the same time, distance learners are able to fit their coursework into existing schedules. Seraphin also highlights the flexibility of online programs. “It’s a great choice for students looking to balance time with family or work commitments. Online classes can be taken at any time of the day instead of having to attend on a firm schedule.”
Conversely, students at brick-and-mortar campuses are expected to attend classes at the same time and place for an entire semester. This may create conflicts with existing jobs and other commitments.
The post-graduation salaries of professionals indicate that pursuing an MBA is a worthwhile investment. In 2015, the Graduate Management Admission Council reported that nearly a quarter of corporate employers will increase starting salaries for MBA grads. The Council estimates that MBA grads enjoy a $45,000 starting pay bump from those with bachelor degrees.
According to the Bureau of Labor Statistics, the numbers hold true across many industries. Below are a few examples:
|Occupation||Bottom 25%||Median (50%)||Top 25%|
|Public Relations and Fundraising Managers||$73,910||$101,510||$143,1120|
|Public Relations Specialists||$40,810||$55,680||$76,630|
|Securities, Commodities, and Financial Services Sales Agents||$39,570||$72,070||$141,780|
While the anticipated increase in salary is alluring for prospective MBA students, finding the funds to pay for the degree can be daunting. Several funding options are available to students: employer sponsorships, loans, and scholarships. Not everyone has an employer who is able to fund their education nor do they want to take out more loans than necessary. Scholarships seems like the best bet – no commitments to an employer, no need to repay the loan. However, finding them can be difficult as many are not well publicized. Learn about helpful financial planning tips and discover a sense for what types of scholarships available.
The Walton School of Business at the University of Arkansas provides an excellent example of the types of student assistantships available via MBA programs. Prospective students should research this option at each school they are considering.
The Daniel B. Goldberg Scholarship is available to MBA students who plan to work in government finance.
CommonBond helps students calculate how to pay for their MBA based on their chosen school, current savings, scholarships and any previous student debt.
African-American individuals aspiring to complete an MBA program are eligible to apply for the NBMBAA’s annual graduate scholarships.
This scholarship, which ranges from $2,500 up to $10,000, is open to Hispanic graduate students studying management or business.
This non-profit awards MBA scholarships to minority students planning to work in financial services.