New Stanford MBA Fellowship Offers Free Ride - On One Condition

A few worthy candidates will get to pursue one of the world’s most prestigious, and expensive, MBA programs – the Stanford MBA - for free.

The inaugural Stanford USA MBA Fellowship, whichcovers the full cost of tuition and associated fees (approximately US$160,000 over two years), will be offered to three students upon admittance to the Stanford MBA, who can demonstrate financial need and who have “strong ties to the Midwest.” The latter factor requires that the candidate, upon graduation, work for two years in a professional capacity to support economic development in a US region that, according to the school, is “underserved.” The Midwestern states of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, or Wisconsin are all eligible in the fellowship’s first year.

Of course ‘economic development’ can come in many forms, explains Simone Hill, an assistant director for MBA admissions at Stanford GSB and in charge of the MBA fellowship. In an interview with Bloomberg, she explains that, “we don’t have any specific stipulations on what we mean by ‘having an impact,’ because we know there are so many different ways you can do that.” Hill says some areas worth brainstorming for potential involvement are government, the social sector, entrepreneurship, grassroots activity and any efforts to develop new energy sources or bring in more capital to the region. The fellowship itself is modeled on the Stanford Africa MBA Fellowship, which has similar stipulations and, since 2013, has allowed the school to support up to eight citizens of African countries each year with the ultimate goal of aiding the region’s development.

Stanford MBA fellowship to drive both economic development and career growth

Stanford GSB’snew fellowship aims to incentivize the prospect of beginning a post-MBA career in less popular graduate destinations in the US. With the Midwest states having undergone devastating blows to their economy since 2007, they may currently be less appealing for MBA graduates who seek higher wages or the kind of living standards and lifestyle offered by say, California’s Silicon Valley, where the school is based.

Fellows may – and rightly so - expect that MBA employers in the Midwest cannot offer comparative salaries to more thriving economic regions, or the average salary expected by their Stanford MBA counterparts (the class of 2015 made an average of US$130,000 post-graduation). However, a fellowship recipient getting such a substantial tuition ‘subsidy’ on one of the nation’s top-ranked MBA programs is sure to find their ROI calculations withstand this. In the end of course, the arrangement is counting on graduates using skills acquired during the program to make an impact on some of the areas in the US that actually have a lot of potential for growth. Indeed, the fact that these regions are currently receiving less attention from job-seeking MBA degree-holders could position MBA graduates to strive for more competitive and challenging roles there.

Career opportunities in the US Midwest for Stanford MBA fellows

There’s much work to be done in the US Midwest, according to a report by Georgetown University’s Center of Education and the Workforce: “Job losses in the ‘great recession of 2007’ spared no region, but the bulk of industries hardest hit were in the Midwestern states.” However, the report also forecasts that 20% of all job vacancies in the US economy through 2018 will be in this region, with many new jobs emerging in healthcare and STEM occupations (science, technology, engineering, and math). Of course, professionals currently working in these fields who hail from the Midwest may find this MBA fellowship particularly of interest, as it might encourage them to work towards creating impact back home as well as allowing them to further their own career with an MBA.

Indeed, as the Georgetown report’s authors divulge, “compared to the rest of the country, the region has a relatively educated and skilled workforce, which could help it capitalize on the impending recovery.” The key is directing the region’s highly skilled workforce towards “the industries and occupations with the greatest needs and expected growth,” they explain. While an increasing number of US jobs requires postsecondary education (currently, 63%), certainly not all require business degrees at the management level; however, given that the region’s job growth is on the rise – there are certainly opportunities for MBAs on the horizon.

One reason (partly a factor of an aging baby boomer population) is the large number of forecasted job openings (roughly two million for the nation in manufacturing alone), which will likely demand more managers and other types of leadership roles in operations, logistics, HR and change management. “We are also simultaneously observing structural change in the economy as old-line manufacturing industries are being replaced by new service industries,” say the researchers. As such, firms that are going through complex transitions post-recession, or those seeking to utilize new technologies (in agriculture, for example), may require strategists, consultants and senior leaders who hold MBAs.

Next steps for the Stanford US MBA Fellowship

Stanford GSB hopes that the new fellowship will improve the geographic diversity of its incoming MBA cohorts. This could also mean diversifying its alumni base, 27% of whom are currently based in the Bay Area alone. In addition, the school’s plan is to expand the number of fellowships to eight awarded per year and to encompass or promote other US regions that could benefit from more MBA hires (such as the Southeast).

While the Stanford MBA’s round one application deadline has already passed, those applying during the second round (before January 10, 2017) are still eligible for the fellowship. They must indicate on their application their interest in the Stanford USA MBA Fellowship, which will trigger a prompt for the submission of an additional essay (of 400 words). However, applicants will have to accept admission to the program before they find out if they have been awarded a fellowship or not, so do not be mistaken - the fellowship should not be regarded as a bursary that necessarily increases accessibility to this highly coveted MBA degree.