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• Universities and colleges rarely paid much attention to MBA financial aid or tuition assistance.
• However, the skyrocketing costs of tuition and a student loan crisis that is dominating political debate has led top programs in the US to boost their financial aid offerings.
• Graduate business school administrators have come up with creative ways to address the high costs of their programs.
• This is a report provided by Francesca Di Meglio, a freelance writer and editor who regularly contributes to education specialists QS Quacquarelli Symonds.
• Click here for more BI Prime content.

In the not-so-distant past, universities and colleges rarely paid much attention to MBA financial aid or tuition assistance. After all, many aspiring MBAs had earned a decent salary before graduate business school and expected to double or even triple their earnings post-graduation.

Still, tuition at top MBA programs can cost upward of $130,000 for a two-year program. Skyrocketing costs and a student loan crisis that is dominating the current political debate have led to more interest in financial aid. In addition, full-time MBA programs are facing challenges, such as stricter immigration policies that are making potential international students reluctant to apply. Discussions around the class divide and a lack of representation of lower-income students at institutions of higher education has also put the cost of college in the spotlight.

As a result, financial aid and tuition assistance have now become the standard at top MBA programs.

"As a school, we are committed to making Harvard Business School accessible to talented students from all backgrounds," said Chad Losee, managing director of MBA admissions and financial aid for the school's MBA program. "Our learning model depends on diverse perspectives in every classroom. In addition to our need-based fellowships, HBS held MBA tuition flat this year to support students."

Annual tuition at Harvard Business School is $73,440, according to the school's website. In fact, Harvard Business School has spent $41.5 million for financial aid programs for MBA students in fiscal year 2019. UCLA Anderson School of Management has a budget of $15.5 million for financial aid in a given year for graduate business students. And UC Berkeley Haas School of Business provides more than $8 million in scholarship funding each year.

How students apply for financial aid varies

There is a myriad of ways schools address the issue. To start, many business schools have their own financial aid offices, separate from the university. While the process for attaining financial aid varies from program to program, there are some general standard practices.

For starters, merit-based aid usually refers to scholarships or fellowships, which do not have to be paid back to anyone. Most business schools consider students for merit-based aid when reviewing their admissions application. Financial aid, on the other hand, is a reference to loans, which will eventually have to be paid back.

Domestic students are sometimes directed to fill out the Free Application for Federal Financial Aid (FAFSA). Some business schools also have an internal financial aid document. For example, Harvard Business School asks for the student's previous three years of income and asset information to see if there is a need for aid.

Ways to offset costs

Graduate business school administrators have come up with creative ways to address the costs of their programs. One common denominator is a program to help students who take summer internships to pursue a startup or with a nonprofit because most of these job opportunities provide either minimal or no salary.

"Duke University's Fuqua School of Business Summer Internship Fund, sponsored by both school and student groups, matches what employers are able to pay to students interning with nonprofits, mission-driven businesses, or small businesses and startups so that those groups are able to benefit from the expertise of an MBA intern without significant financial sacrifice," said Allison Jamison, assistant dean of admissions at Fuqua.

Fuqua is not alone. Yale School of Management, in fact, has a student-led Internship Fund that is celebrating its 40th anniversary. It supports students interning in the public sector over the summer.

Another trend taking shape is loan forgiveness programs for those entering the public sector after graduation. These initiatives are intended to help graduates better deal with the student loans they have taken on to support their education. Yale School of Management says it's a leader in providing loan forgiveness, which is something it has done since 1986. Stanford Graduate School of Business (GSB) also offers such an option.

"In order to encourage MBAs to make meaningful contributions to social issues, economic growth, and political stability in organizations where salaries are typically lower, we offer a loan forgiveness program to reduce the financial impact of educational debt, by paying a percentage of graduates' Stanford GSB loan obligations while they are employed in the nonprofit or public service sectors," said Kirsten Moss, assistant dean of MBA admissions and financial aid at Stanford GSB.

Students are also figuring out ways to pay their tuition

In the end, students also must take responsibility for their education and financial future. They also have come up with a number of ways to pay their tuition. Some take advantage of programs such as the GI Bill, for veterans of the military. In general, there is a mix of possibilities.

"Students are paying for their tuition through a combination of savings, scholarships, and loans," said Soojin Kwon, managing director, full-time MBA program and admissions at University of Michigan Ross School of Business. "Additionally, some students are sponsored by their employers. Others take on part-time graduate assistant or teaching assistant jobs. And some companies will partially pay for a student's tuition after the MBA graduate has been hired full-time."

For many MBA graduates, the financial future is bright. Business schools want them to consider their education a wise investment.

"Even schools with need-based financial aid still use a co-investment model that require you to take loans," said Rebekah Melville, managing director of financial aid at Yale School of Management. "You should save diligently, but we also find that our students get out of debt about 6.5 years post-graduation."

In fact, QS also finds MBA programs to reward students with a healthy return on investment (ROI).

"We estimate that even among the top 20 global MBA programs, which average an eye-catching $115,000 in total tuition, that it only takes 40 months or 3.3 years to pay back the investment," said Alex Chisholm, head of analytics at QS. "This break-even estimate includes the opportunity costs of forgone wages and living expenses during the program. Further, it seems that graduates from these top 20 programs can expect an average 10-year ROI of nearly $1 million dollars. This is a testament to the value of the degree and the premium employers still place on top graduates.

Francesca Di Meglio is a freelance writer and editor who specializes in covering graduate business schools and higher education in general. She regularly contributes to QS sites, including TopMBA.com, from her office in northern New Jersey in the United States.