HBS Ups the Ante in Growing Financial Aid War

The News

Harvard Business School announced it will provide full-tuition and course fee scholarships of $76,000 for both years to approximately 10% of its student body. The announcement comes as business schools continue to outmaneuver each other with generous financial aid packages to attract the most diverse applicant pools. All admitted students will continue to be responsible for their own living expenses.

Our Views

This will almost certainly further separate the “have” business schools from the “have not” MBA programs as very few schools can afford to match HBS’ generosity. Harvard Business School was already granting average aid awards of $84,000 ($42,000 over each of two years) to around 50% of its applicants before this latest announcement. Historically, critics believed MBA students did not need much financial aid. Instead, they insisted, the surplus generated by business schools should be allocated to undergrads as well as those graduate students with lower projected future earnings.

Harvard Business School will provide full-tuition scholarships for both years of business school to approximately 10% of its MBA students.

Clearly, these latest developments seem to have turned those arguments on their proverbial heads. However, will this generous financial aid make that much of a difference in the rankings? Even before HBS started upping the ante with their generous financial aid packages, our clients almost always chose HBS or Stanford over other business schools. The vast majority of our clients who were offered the Roy H. Park Fellowship, a two-year, full-tuition scholarship, by Cornell Johnson declined it when they also received admission offers from Harvard or Stanford.

We are just not sure the rankings are going to affected by this growing financial aid war. The gap between the very top business schools that have the resources to offer this type of financial aid and the other top business schools will undoubtedly grow. Nonetheless, the pool of highly qualified MBA applicants will continue to exceed the class seats at the “have” business schools. And, therefore, the slightly lower-ranked MBA programs will continue to fill their seats with good candidates with little to no change in their admission yield.

What They Say

Chad Losee, Managing Director of MBA Admissions and Financial Aid, explained, “We recognize that financial concerns may keep exceptional potential applicants from considering business school as an option. Given the impact they are having in their companies and communities, that is a loss not only for them, but also for society as a whole. By funding the full cost of tuition for students with the greatest financial need, we aim to ensure that prospective students from all socioeconomic backgrounds, industries, and parts of the world have access to the HBS experience.”

Matthew Weinzierl, Senior Associate Dean of the MBA Program, added, “Affordability is of paramount importance because it enables people from all backgrounds, experiences, and interests to enroll at HBS. Our case-based approach to teaching and learning relies heavily on exposing HBS students to a wide variety of perspectives because we’re preparing them to be leaders in organizations and in a world marked by vast human difference and diversity.”