New HBS Scholarship Targets Students from Low-Income Backgrounds

Harvard Business School (HBS) has created a new scholarship for MBA students from lower-income backgrounds – the latest sign that business schools are trying to fuel the diversity which enriches the campus learning experience.  

So far business schools have largely focused their diversity efforts on creating gender equality in their MBA programs, which have remained male-dominated for the past decade, according to data from AACSB International, an accrediting body. But the announcement by HBS suggests that elite schools are beginning to think more carefully about what they can do to attract people from lower-income backgrounds who may be put off by high tuition fees. 

MBA tuition at HBS is US$72,000 per year. However, Nitin Nohria, the business school’s dean, told Bloomberg that 60% of its students are offered financial aid. The school operates a need-blind admission process; students are not required to apply for aid before application. 

The new Forward Fellowship is designed for students who carry significant financial burdens because of their family background and circumstances. Awards will range from US$10,000 to US$20,000. 

“At HBS, we are intent on and proactive about maintaining the diversity of our student body and supporting individuals from all backgrounds,” said Chad Losee, managing director of admissions and financial aid. “We believe it is important to acknowledge both where each of our students is now and how far they have come. The information we gather in the Forward Fellowship application will enable us to identify incoming students for whom this additional aid will go a long way.” 

Unlike regular need-based fellowships, which consider a student’s individual financial situation, the Forward Fellowship’s application process will take into account the student’s family circumstances and financial history, so the available funds can be distributed to those who need it most.  

MBA scholarships address rising cost of MBA 

The awards are intended to alleviate some of the financial concerns associated with earning an MBA, HBS said in a statement. The announcement comes as prospective students increasingly question the cost of an MBA, and consider more carefully their expected return on investment.  

In a recent survey of prospective business school students by the Graduate Management Admissions Council, around half of them said that not having enough money available to pay for their education, and potentially having to take on large debts, may prevent them from pursuing a graduate business degree. 

The number of employers who are willing to sponsor their employees to get an MBA has fallen from 36% in 2009 to 28% today, according to the GMAC study.  

The amount of scholarship funding awarded to MBAs to help them saddle the cost of obtaining the degree – which can run to well over US$100,000 when living and other expenses are factored in—has ballooned in recent years. The GMAC study also found that the number of prospective business school students using grants, fellowships or scholarships to pay their fees has risen from roughly 15% to roughly 27% over the past five years.