While an MBA is often thought of as one of the most versatile post-graduate degrees available, one of its biggest drawbacks is high tuition rates. The emergence of online and distance learning programs provide slightly lower tuition and cost as well as offers students the advantage of continuing to work while taking classes, which can help offset the cost of the program. Distance, online and part-time MBA programs can help make the degree more attainable, but not necessarily more affordable. Luckily, there is one thing that is often overlooked that can help with MBA expenses – seeking out tuition reimbursement from their current company.
According to the New York Times, a 2010 survey showed that out of 1,084 companies surveyed by Business and Legal Reports, 85% offered some sort of tuition reimbursement to employees. While the figure may be surprising to some, what makes it even more surprising is that the figure was up from 52% in 2007, despite the downturn in economy. Companies have learned that helping their employees pay for tuition not only helps when recruiting employees, but also in retaining top talent. Lorrie Lykins, the managing editor and director of research services of the Institute for Corporate Productivity, explained to the New York Times that companies are showing greater interest in providing tuition reimbursement to current employees due to the fact that as the country begins to climb out of recession, it will allow companies to begin to recruit more aggressively and increase the hiring of business professionals.
However, employers do not often offer tuition reimbursement programs with no strings attached. There are usually some stipulations that come along with the aid. Some companies specify that the employees must pursue a part-time program because in most cases, employees must discontinue work to pursue a full-time MBA program. Target Corporation, one of America’s largest companies with more than 350,000 employees in 2009, offers its employees a program that pays for a part-time MBA at the University of Minnesota-Carlson School of Business. Employees are then required to work for Target for a minimum of two years after the completion of the program, but are also encouraged to stay longer so that the employee can reap the rewards of their degree in-house. According to the Baltimore Business Journal, online and distance learning has played a major role in companies offering tuition reimbursement programs as it allows the student to still able to devote themselves to their job on a full-time basis while developing future skills that not only benefit the employee, but also the employer.
While few companies offer full-coverage tuition reimbursement to employees, there are some that do provide lucky employees with a full ride for the entirety of their MBA education. One well-known company that offers total tuition reimbursement with no limit is jelly giant J.M. Smucker. Other companies, such as UPS, offer partial tuition to both part-time and management employees. Through the Earn and Learn program, part-time employees at the shipping company can receive up to $3,000 per year with a $15,000 lifetime maximum, while management employees can earn $4,000 per year with a $20,000 lifetime maximum. For employees who are unsure whether their companies offer tuition assistance, it is always worth inquiring with human resources or your supervisor. As more and more companies continue to offer the program, others may follow suit if they feel there is need and interest within their own walls.
Despite the help that is available to students through their employers, very few students at the nation’s leading MBA programs are using them. Dartmouth’s Tuck School of Business estimates that only 3% of students used such programs in 2010, according to the New York Times. The number is slightly higher at Harvard Business School where 5% of the student population took advantage of employer tuition reimbursement. For Tuck students, reimbursement ranged from as low as $14,000 to as high as $103,000. Fellow Ivy League institution Pennsylvania University’s Wharton school also reported low numbers, with only 4.2% of MBA participants receiving tuition reimbursement in 2010. Amounts ranged from a low of $7,000 to a high of $112,000.
The industry that accounts for the most full-time student sponsorships are management consultancy firms, while financial service and multinational industries make up a lesser amount. These companies are known to seek out entry-level employees and will typically place high value on MBA graduates developing into future company leaders.
Despite the downturn in economy, many top-tier consulting firms refuse to back away from employee tuition reimbursement programs. Bain and Company, a global consulting company with more than 3,500 employees and offices in 44 countries, relies on the program not only to benefit employees, but also as a way to develop new business. According to the Bain and Company, upon coming back to work after the completion of an MBA program, employees return with more business contacts and improved skills. Tuition reimbursement has been a part of their business plan for decades, according to Bain and Company’s head of global recruiting, Mark Howorth. Consulting firms also believe that giving their employees MBA experience is extremely valuable in terms of helping the companies develop future business. Addison Lanier III, part of the 2012 class at Tuck, who has spent the past four years at the strategy consulting firm the Parthenon Group, was adamant about the advantages students can bring back to the companies who sent them to school. “Especially in service-related businesses, the network of business schools is very valuable,” Lanier told the New York Times, “especially as you get into the realm of being 5 to 10 years out and you’re much more responsible for selling business and drumming up relationships for the firm.”