Should the MBA Be Free?

Two institutions share the outcomes so far for their all-tuition-paid full-time MBA programs.
Should MBAs Be Free

Shai Reshef, founder of the University of the People, giving a 2014 Ted Talk on low-cost education.

IN AUGUST, New York University’s School of Medicine made a startling announcement—it would offer full-tuition scholarships to all current and future students in its three-year medical program. The scholarships, which cover the school’s yearly tuition of US$55,018, will be funded with support from more than 2,500 donors.

Administrators believe that the comprehensive scholarship program will help the school address two prevalent challenges in medicine: rising student loan debt and doctor shortages. They hope the scholarships will attract students who might otherwise not apply to med school for fear of accruing massive debt; doctors in the U.S. graduate with a median $202,000 in loans, according to the Association of American Medical Colleges. With no loans to pay, future NYU med school graduates might enter lower-paying fields such as primary care, pediatrics, and obstetrics and gynecology, where numbers of doctors have been dropping.

Unlike doctors, MBAs are not in short supply. But could business schools attract more diverse and passionate student cohorts to their full-time MBA programs via full-tuition scholarship models?

Two schools—the W.P. Carey School of Business at Arizona State University in Tempe and the business school at the University of the People (UoPeople), a global online higher education institution— already have adopted similar models for their MBAs. Here is a look at how these programs have fared over the past two years.

A BOON TO DIVERSITY

UoPeople has adopted a free-tuition model for all of its programs—including its MBA, launched in 2016. Students are accepted into the MBA program only after they successfully pass an introductory business course, explains Shai Reshef, UoPeople’s president and founder.

“UoPeople is especially proud of its incredibly diverse student population, from over 200 countries and territories,” says Reshef. “These are students who would never in a million years have been able to study at a traditional university.”

In 2016, the Carey School began offering full-tuition scholarships to all students enrolled in its full-time MBA program. Two years in, the school has achieved its goal of “opening the doors to a high-quality graduate education for many who otherwise could not afford it,” says dean Amy Hillman.

The Carey School’s admissions standards have not changed, but now, as admissions staff members evaluate candidates, they pay more attention to all forms of diversity, including gender, ethnicity, nationality, industry expertise, and career aspirations. As a result, the percentage of women in the class has increased to more than 40 percent. Among U.S. enrollments, the number of Hispanic students has nearly quadrupled, and Native American student representation is on the rise.

“More than half of the students in the class have undergraduate majors outside of technical areas and business. The number of countries represented went from an average of eight to ten annually to more than 20. We’ve received more than 2,500 applications over the past three admissions cycles, with applicants coming from an average of 51 countries per year,” says Hillman. “We’ve made major inroads toward having a more diverse and inclusive class.”

FUNDING THE MODEL

UoPeople and ASU use different approaches to sustain their tuition models. UoPeople relies heavily on open-source technologies, open educational resources, peer-to-peer learning, and a corps of volunteer instructors and staff. Over the years, more than 7,000 professionals have volunteered to teach and develop courses, advise students, and serve in leadership positions such as president, provost, and dean.

Although tuition is free, non-MBA students are required to pay a $100 assessment fee at the end of each course; MBA students pay $200 per course. However, the university offers a range of scholarships to students unable to pay these fees.

At ASU, MBA students’ tuition is covered largely by philanthropic support. While finding donors to sponsor graduate scholarship programs has been challenging in the past, the full-scholarship model and mission has allowed fundraising staff to make a more persuasive appeal to donors. “With a proof point of what those dollars can do, it has become much easier,” Hillman says.

With every graduating class, the Carey School’s pool of donors increases. All 119 members of the first cohort to receive full scholarships completed the program, graduating earlier this year. Together, these students pledged the largest class philanthropic gift in the business school’s history, with 85 percent contributing.

Hillman attributes that high participation rate to the fact that students know that their tuition is donor-supported. “We want to make sure that students know where that money came from,” she says. By doing so, the school adopts a “pay-it-forward” culture among its MBA students. Hillman emphasizes that it’s critical for schools to communicate that message clearly, from the day students are first accepted, if they want to sustain a comprehensive full-scholarship model over time.

THE BEST AND BRIGHTEST

These tuition models are not without their challenges. Both schools must not only attract enough financial and volunteer support to keep these programs going, but also find ways to reach and recruit the best students. Surprisingly, says Hillman, offering full scholarships across the board has not given its MBA program an edge in attracting top students, who often receive full-tuition offers from multiple schools. That’s why, starting next fall, the Carey School will offer exceptional students larger awards that cover books, housing, and other educational costs in addition to tuition.

While Hillman believes that business schools that adopt full-scholarship tuition models could make great strides in increasing the diversity of their student populations, she admits that such an approach might not be right for all business schools. Even so, she believes that all business schools should clearly communicate the range of scholarship options they offer MBA students, as early as possible in a prospective student’s decision-making process.

A lack of transparency regarding the funds available could have “implications to accessibility and diversity,” Hillman says. “If people don’t know about these scholarship programs, they’ll self-select out before even applying. That’s harming us and the business community in the future.