Top B-Schools Raise US$25 Million to Fund MBA Scholarships

Dozens of MBAs will get their tuition funded by scholarships after top business schools in the US and Asia-Pacific raised tens of millions of dollars from wealthy donors. 

The schools – Iowa State University’s College of Business, Harvard Business School and University of Sydney Business School – raised a combined US$23.7 million in September, pledging to pay for more scholarships. 

The price of an MBA at a top-flight school has risen by 81% over the past decade. At the same time, bank lending dried up in the aftermath of the global financial crisis, and many international candidates find it hard to get loans because they don’t have a credit rating in the US. Employers are also less willing to fund an MBA. 

This, set against the backdrop of falling applications at US schools, means that scholarships have become a prized method of recruiting top draw candidates to MBA programs. According to GMAC, this year only one-third of MBAs in the US reported increased application volumes; 64% saw declines.

US schools raised US$41 Billion in 2016

Philanthropic donations to schools increasingly provide the money to pay for scholarships. Colleges and universities raised US$41 Billion in 2016 from donors, according to the annual Voluntary Support of Education survey by the Council for Aid to Education. High-profile gifts made in 2017 include the US$150 million given to Cornell University’s Johnson School by H Fisk Johnson, CEO of consumer goods group SC Johnson. 

Iowa State University’s US$50 million gift was pledged by Debbie and Jerry Ivy, executives at Auto-Chlor System, a large US manufacturing company. Ben Allen, the university’s interim president, said the gift will “increase student scholarships and other high-impact educational opportunities”. The university’s business school will be renamed as the Debbie and Jerry Ivy College of Business, pending board approval. 

Harvard targets first-generation college students

Harvard will launch several scholarships targeted at first-generation college students as part of a US$12.5 million donation from Jonathan Lavine and Jeannie Lavine. The pair are Harvard alumni and Jonathan is comanaging partner of Bain Capital, one of the world’s biggest private investment firms. The cash will open access to business education for those who cannot afford Harvard’s nearly $107,000 annual price tag. 

Harvard in July also launched Forward Fellowship, a scholarship program that aims to assist students who come from low-income backgrounds — viewed in by the industry as a push to increase diversity. 

“Fellowships provide the gift of possibility,” said Harvard Business School dean Nitin Nohria. “For many students, being admitted to Harvard Business School becomes a reality only when they know there is financial support available to make it possible for them to attend.”

Approximately 50% of Harvard MBA students receive financial aid from the school each year. Harvard provided US$35 million in financial aid to MBA students in the 2016-17 academic year.

Felix Oberholzer-Gee, senior associate dean of the MBA Program, said: “Our learning community is enriched by diversity in all its forms, and the fellowships we offer make it possible to bring people here from all walks of life around the globe.”

Meanwhile, Alek Safarian, the founder of Australia’s largest private medical research firm, Novotech, has donated AU$1.4 million to fund an ongoing University of Sydney Business School MBA scholarship.

Safarian, who graduated from the University of Sydney with a degree in pharmacy and an MBA, said he was fortunate enough to earn his MBA “through a fully employer funded scheme, which is not so common today”. 

“My academic path, through pharmacy first then an MBA, has served me well professionally and personally,” he said. “Through this gift, I hope to encourage new students to find their own success by going down a similar path, and under the same conditions that I was able to enjoy all those years ago.”