The U.S. Government Is One of the Few Employers Still Funding MBAs

The U.S. Government Is One of the Few Employers Still Funding MBAs

(Bloomberg Businessweek) -- If you want a free MBA, sign up to serve your country. Or just stick with consulting.

In the old days, many companies picked up some or all of the cost of an MBA to develop and retain talent. “All these MBA students would learn new skills and want to contribute in a different way at their companies,” says Sean O. Ferguson, director of the MBA program at the Asia School of Business in Malaysia, a four-year-old school that partners with the MIT Sloan School of Management.

Business schools and companies say this benefit has withered over the past decade as many employers decided the cost was too high and many MBA graduates ended up leaving to work for other companies.

Nonetheless, a Bloomberg Businessweek survey of 10,473 MBA graduates from the class of 2018 at 126 schools around the world found that some sweet spots remain. Of 1,484 students who returned to work to their previous employer after graduating, 35% said that they received at least 75% tuition coverage. Within that group, 57% were paid by consulting companies, financial services companies, or the government, which mostly means the military.

The Mason School of Business at William and Mary said that 20% of its full-time MBA class has come from the military in recent years. Of 1,500 students in Whitman School of Management at Syracuse University’s online MBA program, the military currently accounts for 27%. The school also partners with the Department of Defense in a Defense Comptrollership program that crams an MBA and an Executive Master of Public Administration into 14 months for 30 military finance employees.

The U.S. Army awarded Jered Collins a path to free graduate school a decade ago, when he transitioned from undergraduate ROTC to the Army with a high GPA. “I didn’t even know the award existed until I was getting ready to graduate,” he says. Collins’s intervening years have included 18 months serving in Afghanistan and more recent work as a special forces company commander at Fort Bragg in North Carolina, overseeing 100 personnel providing logistical support for combat forces.

Further promotions require a graduate degree. “It’s strongly encouraged to get an advanced degree,” Collins says. “Lots of generals and admirals have Ph.D.s or other degrees.”

The Army paid for Collins’s $100,000, two-year stint at Mason, where he graduated last year, and he says his military classmates “finished at the top of the class—quite a few of them.” In exchange, Collins agreed to six additional years of service. Should he choose to leave the military before that term is up, he must repay the cost.

The Bloomberg Businessweek student survey found that while the percentage of MBA graduates in the military who are sponsored is high, the largest number of students receiving substantial funding from employers worked in the consulting industry.

At Deloitte, junior staffers can apply for the company’s Graduate School Assistance Program, which includes an application and panel interview. “The GSAP helps us recruit top undergraduate talent,” says Maribeth Bailey, director of Deloitte Talent.

Deloitte pays for MBA tuition but not room and board. The consultants pay all upfront costs and Deloitte reimburses them via taxable yearend bonuses at the close of their first and second years back at the firm.

Stephen Nabinger was working in Medicare and Medicaid systems for a Deloitte client when he headed to Yale School of Management, along with more than a half-dozen other Deloitte consultants. “Some other students had employee sponsorship, but Deloitte was by far the largest on campus,” he says.

Sponsored students with guaranteed jobs don’t face their classmates’ pressures regarding performance, financing, and recruitment. For Nabinger, it all paid off. Now in Deloitte’s public sector practice, he says: “I’m doing work I really wanted to do, and things have been going really well.”

The Bloomberg Businessweek survey found that around one-third of U.S. and international students receive full or nearly full funding. David Simpson, admissions director at the London Business School, says Japanese and South Korean students often receive corporate funding to attend, with more than 75% of Japanese students in his programs sponsored. “In South Korea and Japan, it’s more common to spend a greater percentage of your career with one company,” Simpson says.

©2019 Bloomberg L.P.

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