Is it a twenty million dollar marketing gimmick? Or is it simply the "most innovative business school in the world" being the most innovative business school in the world? Arizona State University's Carey School of Business has announced that a MBA from their school will now come free of charge, no strings attached.
Why would a school do this? The school believes that they will be able to build a better community of students, more entrepreneurial and higher achieving, by making the program free. Amy Hillman, dean of the Carey School of Business, said in a statement. "If someone has a great start-up idea, and they know they would be more successful in their venture if they had the skills and networking that an MBA would give them, they might be concerned about spending the money because it takes away from the capital needed for the start-up venture."
Arizona State is currently 30th best business school in the country according to US News and World Report, so they are certainly no slouch when it comes to producing great MBAs. The average GMAT at the school is 673.
So how much will students save going to Arizona State? Currently, tuition for the full-time MBA program is $54,000 for in-state residents, $87,000 for out-of state residents, and $90,000 for international students. Not too shabby. The school also announced they will grow their class size by about 40% to 120 lucky students. So the total investment by Arizona State will be about twenty million dollars annually. Naturally, the school expects application volume to rise precipitously after this generous offer and hope their yield (number of students who accept enrollment offers) to also rise. They also think they can attract better business school candidates who will do some quick math and see just how much money they attend by perhaps choosing a school that might be a bit lower on the rankings than where they could have gone otherwise. All of this should hopefully pay off for Arizona State by sending them up the business school rankings, much of which is determined by the factors above.
How are they paying for all of this? Well a real estate investor named William Polk Carey made a fifty million dollar naming gift to the school in 2003, which has apparently paid off for Arizona State. "His investment in us can allow us to invest in these students," added Hillman.
What does this mean for business school applicants? Well first of all, you probably want to make sure you consider Arizona State, especially if you were targeting schools in the top thirty of the rankings. While many people might not consider heading west for their MBA, Arizona State has a lot going for it. It is located near Phoenix which has many large employers of business school graduates such as Intel and Honeywell. Finally, I think this is also serves as a reminder to students to really think about the costs of business school. Many educators are starting to think the MBA is just getting to expensive. This is a good time to make sure you do the math before jumping at a school that might be a tad better ranked than ASU, but far more expensive.