Source: Financial Times
by Jonathan Moules,
Scholarships are helping more students to attend business school without building up debt
Debbie Craven was beaten to university by her daughter, who is midway through a psychology degree. But Ms Craven senior, who left school at 16 and last year started a master of business administration degree at Reading university’s Henley Business School, has one big advantage: unlike her daughter, she is not paying any tuition fees.
Until 1998, undergraduates in the UK did not pay tuition fees. And historically business school was also often free for students. Employers would pay for two-year, full-time postgraduate courses, which were seen as the best way to build leadership skills for highflying executives destined for a place on the board.
This practice has waned as companies have been forced to cut costs, particularly in the wake of the financial crisis. Most of the people who want to attend business school have had to fund themselves.
Recently, though, the idea of MBA candidates being paid to study has been revived, this time with the help of scholarship funds built up by schools to help applicants who would not otherwise be able to afford it, and from funds accrued in government-backed schemes designed to boost training.
Ms Craven, a 50-year-old hospital director, works for Ramsay Healthcare, one of the world’s largest private healthcare groups. The company must set aside money for workplace training under the UK’s apprenticeship levy scheme and it is using some of the cash to send executives to business school.
“I have wanted to do an MBA for years but financially it was not previously possible, especially with the cost of bringing up children,” Ms Craven says.
She is enrolled on a part-time executive MBA, and Henley now offers a variety of scholarships and bursaries to support the most promising candidates not able to access apprenticeship levy funds, and who would struggle to pay for the course.
Henley’s dean, John Board, says the apprenticeship levy has helped improve the quality of the school’s intake. Sponsoring employers are selecting their MBA candidates from a wide variety of people with a diverse range of life experiences. “Every business school makes as much use as it can of scholarships and bursaries to encourage the kind of people they want to come on their courses”, he says. “We say, ‘if you want to come on the course we will find a way’.”
In the US, scholarship funds have become a key tool for business schools to attract a mix of students to their MBA programmes, including more people from outside the traditional banking and consultancy sectors.
A record 60 per cent of this year’s MBA class at Duke University’s Fuqua School of Business received scholarships, some with full payment of their fees. The school completed a $127m fundraising campaign last year, with the largest slice of money earmarked for student support.
Bill Boulding, Fuqua’s dean, says scholarship fundraising has turned into an “arms race”, driven by a combination of rising tuition fees and declining applications demand for business schools in the US.
“The reality is that there are schools with very deep pockets and they have the ability to offer quite a bit of scholarship support,” he says.
Judith Hodara, co-founder of admissions agency Fortuna Admissions, says she has seen a significant increase in scholarships in the 20 years she has been working in the sector. Her MBA clients collectively received a record $6m in financial aid this year, including several full scholarships worth over $115,000 at top 10 US schools
When Ms Hodara began her admissions career, as an employee at the University of Pennsylvania’s The Wharton School, it was more usual for MBA applicants to be sponsored by their companies, particularly those from overseas. The understanding was that they would return to their home countries and eventually become senior management leaders. “We knew that these were the cream of the crop,” she says.
While schools have always tried to find the best talent, Chioma Isiadinso, chief executive of admissions agency Expartus, says the hunt has intensified as tuition fees have risen and students have started to question the return on investment on an MBA. This in turn has led schools to find creative ways to recruit students.
Ms Isiadinso says Harvard Business School is among a few leading institutions that invite specific applicants from particular companies, notably private equity groups, to attend information sessions. “Such targeted events ensure that the audience is pre-qualified and that the schools are talking to a competitive pool of prospects,” she says.
Columbia Business School’s MBA admissions team are paying 80 per cent of the tuition fees for Chance Rodriguez, allowing the 24-year-old to leave his job at a real estate investment management company to study full time. Mr Rodriguez covers the balance of the course costs from his personal savings, enabling him to graduate in 2021 debt free.
The school’s willingness to fund so much of his student expenses took Mr Rodriguez by surprise. He sidestepped questions about financial support in his application and interview because he did not want it to be a “distraction”.
“I wanted to maximise my chances of getting in as opposed to maximising a scholarship,” he says. “These schools are aware of the diminishing returns of the MBA degree as tuition rises, so they are giving as much money as they can afford regardless of whether the student says that they have a need,” Mr Rodriguez says.
However, he says the financial support helped him “get over the line” in returning to student life. As a Latino male with high test scores, who is on a fast track in his career, Mr Rodriguez understands his value in terms of course diversity.
“I also revealed in my application that I was the youngest analyst in my company to make associate.”