Originally published by John A. Byrne on LinkedIn: Rising Cost Of An MBA Impacting School Choice

The ever escalating sticker price of the MBA degree is causing more applicants to modify their target list of business schools, according to a new survey out today (June 15).

One in five responding candidates this past year said they switched out MBA programs during the application process based on cost and access to financial aid, while 41% said their initial choice of schools was “partly influenced” by affordability. That’s according to an online open survey of applicants sponsored by Association of Independent Graduate Admissions Consultants (AIGAC). The trade group said that in 2009, when it started its applicant survey, financial aid and program costs were ranked the least important factors.

Just two years ago, New York University’s Stern School of Business crashed through the $200,000 barrier for the total cost of its full-time MBA program. It was the first time any business school advised incoming students to budget more than $200K for MBA tuition, fees, room and board, and other expenses. Four business schools now meet or exceed the $200,000 threshold, including Stanford, Wharton and Columbia. The cost of getting an MBA has become so high that some are sounding the alarm that the price tags on full-time, two-year MBA programs are approaching a danger zone. Elizabeth Ziegler, chief innovation officer for Northwestern University’s Kellogg School of Management, last year warned that “we are pricing ourselves out of the market” (see Full Cost of MBA Keeps Rising).

“Though applicants seem bullish about their career prospects, cost seems to be coming up more in terms of the investment,” says Scott Shrum, chief operating officer for Veritas Prep and secretary for AIGAC. “Comparing their answers back to ’09, the two least popular responses were program costs and access to financial aid. That is not what is coming back to us this year. Cost is on their minds. It’s feeding into their decisions and, in some cases, it is causing them to choose one school over another.”

While cost has become a bigger factor, however, some things apparently never change. The survey found that MBA program rankings, a proxy for reputation, remained the most influential factor in school selection. Some 74% cited rankings as critical to their school choice, compared to 48% who cited the impact on their careers, 46% city/geographic location, and 38% school culture. Some 30% of the respondents considered the net cost (program cost/availability of scholarships) when evaluating specific schools.