A helping hand

EDUCATION is costly, particularly for MBAs. Though the rewards are potentially enormous for those who pass through high-ranking business school programmes (graduates at The Economist’s highest-ranking school for improving return on investment, HEC Paris, can expect a salary on average that is 153% the amount they earned before embarking on an MBA) the cost of schooling is high. We have previously reported on the plight of some students who are accepted into business schools but are unable to fund their education in full.

Many schools are quick to offer financial aid to students. A survey by the Graduate Management Admissions Council (GMAC), the body which administers the GMAT business-school entry exam, shows that 47% students on two-year full-time MBA courses receive some sort of financial assistance for their education, whether through scholarships on merit, needs, or fellowships or stipends. However, regardless of the amount of funding available, there remains a section of society that doesn’t even bother looking at the possibility of joining an MBA programme because of the costs involved.

Schools are beginning to recognise this concern, and addressing it. Harvard Business School already doles out upwards of $30m every year to students needing financial aid, based on need. Harvard’s tuition support is distributed based on an assessment of students’ previous earnings and assets, and is funded by its alumni network. It is a model that many other schools take—but one that can miss an entire strata of society.

Students from low-income backgrounds have financial commitments in the grey economy that cannot easily be tabulated from bank statements and payslips. It may be the costs of a weekly grocery shop for an ailing, elderly relative they are caring for, or medical bills for a parent or sibling going through an illness.

Harvard’s Forward Fellowship will fund up to ten students a year who may otherwise feel a business-school education is unattainable or unaffordable, says Chad Losee, managing director of MBA admissions and financial aid at Harvard Business School.

The students, who will be given between $10,000 and $20,000 a year for the duration of the two-year MBA programme, will have their financial needs assessed by the school on the basis of an essay outlining their family situation and financial worries. The funding, by design, does not pay for the full cost of tuition at Harvard. Mr Losee believes, to borrow a term from Warren Buffett, that every student should have “skin in the game”. But what the fellowship will do is allow students to graduate with less burdensome debts than they otherwise would.

For an overwhelmingly large number of business schools’ cohorts, Harvard’s Forward Fellowship initiative will make no difference to them, and be of no interest. They are the core group of MBA students—at all schools—who because of their family connections, social standing, or prior employment have always intended on taking an MBA, and have expected to boost their already large income as a result.

But for a few on the margins of society, for whom an MBA is simply too costly, too long, and too risky an undertaking, no matter its potential rewards, the financial support will tip the balance, allowing them to chance their arm on starting a course. It will also diversify the MBA cohort, and give new opportunities to those who otherwise would do their sums, and decide the risk is simply too great.

Readers' comments

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guest-ajnswane

people should help and educate those person, whos are indeed. the person who can not afford expensive course like eng. and medical, people supponsor them and help them. deserving person can not leave illitrate.
Person who get education can search jobs on this website. Entrance Disha

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