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Harvard Business School is launching a new need-based scholarship program that will cover the cost of full tuition and approximately 10% of its MBA candidates.
School officials say the scholarships for low-income students entering HBS are worth about $76,000 a year. Students will still be responsible for about $35,000 a year in living expenses in the Boston area. This fall, approximately 200 HBS students in their first and second year of MBAs will receive full scholarships.
Such a move is rare for several reasons, say MBA admissions counselors. Performance-based aid, based on students’ test scores, grades and background, is much more than financial need-based aid, which many other top MBA programs offer.
Previously, HBS offered full, need-based scholarships to 2% of its students. Some have received part of their education based on financial need.
Linda Abraham, founder and CEO of Admissions, a consulting firm that works with MBA applicants, said these types of scholarships, which cover the full cost of tuition and pay for the most disadvantaged students, are rare. Many MBA candidates pool together loans and grants that cover part of their costs at top-ranked schools.
Campus at Harvard Business School in Boston.
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Harvard Business School has a sticker price of more than $225,000 when the cost of living is added. That means some prospective students may decide not to pursue a traditional two-year degree program even if they receive scholarship money, said Chad Losey, managing director of HBS MBA admissions and financial aid.
To determine who gets the full scholarship, HBS officials say they use a formula that looks at students’ current income, assets, undergraduate debt and information about their socioeconomic background—including childhood zip code, family wealth and home ownership.
About half of HBS students receive need-based financial aid, with those scholarships amounting to $42,000 per student per year.
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Wealthy private schools have seen pressure from lawmakers and students to spend more of their money on scholarships. Harvard Business School’s endowment grew to $5.3 billion in fiscal year 2021, and Harvard’s total endowment was valued at more than $50 billion that year.
That year, HBS said it spent $37 million in financial aid for MBA students, from grant returns and private gifts. It will take about $15 million to cover the full tuition for nearly 200 HBS students this academic year.
A few top MBA programs offer some need-based scholarships, but they typically don’t cover full tuition.
About half of students who apply for need-based scholarships at Columbia Business School are accepted, a spokesperson said. It ranges from $10,000 to $30,000; Annual tuition is over $67,000. Stanford University offers $42,000 a year in awards based on financial need, income and assets, but the school does not say how many students receive full-tuition scholarships.
Giving up two years of income in addition to tuition is a burden, said Insik Kim, co-president of Harvard Business School’s first-generation and low-income student body. MBA costs start with pre-school exam prep and application fees and add up quickly to the cost of living in expensive cities, he said.
But “in their opinion, education is definitely the number one priority,” he said.
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Corrections and enhancements
Harvard Business School In fiscal year 2021, he said he has allocated $37 million for all financial aid for MBA students. An earlier version of this article incorrectly stated that $37 million was spent on need-based funding for MBA students during that period. (Edited on August 16)
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