The great recession of 2008 pulled the largest control-alt-delete in this nation’s history outside of the depression. The aftermath has left everyone scarred but smarter. Interestingly, the recession had a positive impact on financing an MBA education. On this tenth anniversary year of the big meltdown, let’s take a look at how you can leverage the post-recession economy to benefit your graduate education.
You would think the kind of wealth destruction that took place between 2008 and 2013 would have evaporated any financial aid opportunities along with it. Endowment funds, which are the primary source for scholarships and fellowships suffered tremendously, losing in many cases more than 50% of their value. The slow and steady recovery, however, has been kind to these funds and a fascinating phenomenon has resulted, one which also has another player…you.
That’s right! The fiscally conservative attitude that emerged in applicants after the recession has slowly but surely boosted the amount of money awarded by graduate business schools.
Initially, applications dropped precipitously and schools panicked. A $100,000 education suddenly seemed like a luxury to avoid to the average student, so schools began pulling out all the stops. Generous fellowship offers grew steadily and created a hyper-competitive marketplace, one which continues today.
In fact, top business schools are covering on average 50% of gross tuition across the board.
Of course not everyone gets a fellowship, but this number also includes a number of full rides. Ten years ago, the amount of gross tuition coverage at top schools was closer to 23%. Taking into account tuition increases, this doubling of fellowship offerings represents a staggering amount of money that is being offered to hopeful applicants
A trend of negotiating your financial aid offer has emerged.
A decade ago, it was fairly unusual to push back on a scholarship or financial aid offer and could even have resulted in a school pulling your offer all together. Playing one school’s offer off another was considered bad form. Today, however, it’s common practice to mention your other offers in an effort to get a boost from another school. Schools now expect applicants to negotiate.
Another thing affecting fellowship offers, which could be argued is also an after-effect of the recession, is student loan debt.
Student loans are one of the only debts which survives bankruptcy, so students and graduates who slogged their way through the recession all dragged their student loans with them. Young professionals have been carrying a staggering amount of this debt over the years, and have been reluctant to take on more. This reluctance and the dip in applications that resulted, also forced schools to come up with additional funding.
If you need help navigating the battle ground of financial aid, please don’t hesitate to reach out.