A FULLY FUNDED MBA. That is what’s on offer through a new scholarship program for all students entering the two-year full-time program at Arizona State University’s W.P. Carey School of Business in Tempe. The scholarship will cover both years of tuition and fees; students still will need to pay for living expenses, books, and other associated costs. Up to 120 incoming students will be accepted into the full-time program that starts in the fall of 2016.
To finance the free tuition, the school is using funds from a US$50 million donation given in 2003 by real estate broker William Carey. Up until now, that money had gone toward recruiting new faculty.
With the bold gesture, the school is hoping to reach potential students who might otherwise find cost a barrier to a full-time program, including entrepreneurs, single parents, and nonprofit professionals. ASU is marketing the new scholarship to these students through online display ads, search campaigns, email, and other direct marketing channels.
Currently, the W.P. Carey School enrolls more than 12,000 undergraduates and more than 800 graduate students in MBA programs that include part-time and online options. Eighty-six are enrolled in the fulltime MBA class. Before the school announced the new scholarship plan, the cost of the two-year MBA ranged from US$54,000 for in-state students to $90,000 for international students.
Recently, BizEd spoke with Amy Hillman, dean of the W.P. Carey School, about the decision to offer the scholarship and the effects such a move might have down the road.
How did the idea of the full-scholarship MBA come about?
The norm in higher education has been to believe that the more applicants you reject, the more prestigious your school is. However, at ASU, we define ourselves by the students we include and how they succeed. As the federal government provides less support for graduate programs and fewer donors are inspired to donate to master’s students, income inequality is a growing concern. Knowing that the skills a student gains from an MBA can be applied to any career, we asked ourselves: “What types of people see an MBA as unattainable, and how can we help them?” The scholarship program was the answer.
Will the scholarship program be offered only to students enrolling in fall 2016, or do you hope to be able to extend it?
We see this continuing for the foreseeable future. The W.P. Carey endowment is helping us get it started, but we will be fundraising to continue the program. We also hope this is a “pay it forward” model where the students know the opportunity is possible because of one person’s innovation, hard work, and generosity. When they graduate, we expect that they will mentor and help hire those who come behind them and ultimately enable the program to continue.
With this scholarship, you say you hope to appeal to nontraditional students and change the complexion of the MBA class. Can you talk about the kinds of students you hope to attract?
It’s well known that few women and minorities, relative to their representation in the population, pursue full-time MBAs. Few students from emerging nations—for example, Africa—are coming to U.S. MBA programs. The MBA is valuable for those seeking to start their own businesses, run for political offices, work in foreign service, etc. Yet the “return on investment” is not there to offset the costs of pursuing an MBA. All of these are examples of students we’d like to attract.
You’ve also noted that most of your students go into traditional fields such as finance. What careers do you think these nontraditional students will pursue?
Not sure, but we are eager to see the results.
It seems likely that the offer of free tuition will bring in a barrage of applications. How will you change your admissions process to manage the challenge?
Right now we’re focused on making sure potential applicants can assess whether this is the right program for them. Because the opportunity is scholarship- funded, applicants still have to be well-qualified.
How have current students reacted to the news of the scholarship program?
Very enthusiastically. We held town hall meetings with them and continue to answer any questions they have.
Realistically speaking, few business schools can afford not to charge for their degree programs. According to AACSB data, around the world most schools receive more than 70 percent of their budgets from tuition. How can schools balance their need for operating income with their desire to provide high-quality education?
We are in a fortunate position to do this. Not only do we have philanthropy to start the program, but our full-time MBA program represents only 1 percent to 2 percent of our total W.P. Carey School student population.
In recent months, other schools have announced tuition reductions in response to ongoing concerns about the high costs of education. Do you expect more schools to cut or eliminate tuition in order to make education more accessible?
I hope so. America set a worldwide example generations ago by ensuring all children had access to education. If we could continue to make advanced levels of education more easily accessible, imagine how much more advanced our communities and nation could be.