What is a Master of Business Administration (MBA)?

A Master of Business Administration—or MBA—is a graduate degree that offers advanced education in business, management, finance and entrepreneurship. While recent undergraduates can apply for this type of program, many experienced professionals also pursue MBAs to help them reach certain career goals. 

Use this guide to learn more about MBA programs, MBA costs and some potential MBA benefits.

Key takeaways

  • A Master of Business Administration (MBA) is a graduate degree that offers students advanced business skills and knowledge.
  • There are different types of MBA concentrations and programs, and each has different requirements, costs and lengths.
  • The average MBA costs $66,300—but financial aid, scholarships or fellowship programs can help.
  • An MBA is an investment in both time and money, but it can lead to a bigger paycheck, a stronger professional network and more job opportunities.

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What is an MBA and how does it work?

An MBA is a graduate degree that focuses on all things business—from marketing to finance, accounting and more. 

There are different types of MBA programs and concentrations to choose from, depending on your professional goals.

Types of MBA programs

In general, there are different types of MBA programs to choose from:

Full-time MBA

A full-time MBA program includes a full course load—usually at least three three-credit courses each semester—for a total of 12 courses and 36 credits. It usually takes one to two years to complete, depending on the program. But there are other program length options depending on the school.

Full-time programs are usually fully immersive, and some even require students to complete an internship before graduation. Many full-time MBA programs require at least two or three years of professional experience before acceptance, and some may require up to four or five. 

Part-time MBA

A part-time MBA can be done on a more customized schedule so that students can still work—or have time to do other things—while pursuing their degree. But since this type of program is more spread out than a full-time program, it usually lasts at least three years. And it may require less professional experience (usually zero to three years) prior to admission than full-time programs.

Online MBA

An online MBA can be done at least partially remotely and usually allows for a more flexible class schedule. Keep in mind that some programs are fully online, while others may require some in-person days for classes or events. Online MBAs tend to cost less than in-person programs. 

Joint MBA programs

A joint MBA program is geared toward specific leadership positions that require expertise in business management and another field, like education, medicine or law. The resulting joint degree could look like an M.D./MBA (an MBA plus a Doctor of Medicine degree).

Executive MBA (EMBA)

An executive MBA is designed for experienced executives with several years of relevant work history. This type of program can be completed in around two years but can be customized to work around the student’s work schedule.

Types of MBA concentrations

While many MBA programs have a similar core curriculum, the individual classes can vary depending on a chosen concentration. But not all MBA programs require you to pick one.

You can keep your options open by opting for a general MBA. Or you can focus on a specific concentration to gain more knowledge in a given subject, like marketing or accounting.

According to Southern New Hampshire University, you’ll probably take at least some of your core classes before having to pick a concentration. And if you’re having a hard time choosing a specialized path, it might help to consider your career goals as well as any relevant interests. 

Here are some examples of MBA concentrations:

  • Accounting
  • Entrepreneurship 
  • Health care administration
  • Marketing
  • Supply chain management 
  • Finance

Average MBA cost breakdown

According to the Education Data Initiative, the average cost of a full-time MBA program is $66,300. But tuition rates can vary depending on the school. And a part-time or online program can cost less than a full-time in-person MBA. 

In addition to the price of tuition, there are other fees that can impact the total cost of getting an MBA, like:

  • Room and board
  • Meal plans
  • Textbooks
  • Transportation
  • Moving expenses
  • Equipment and supplies

Ways to pay for an MBA

There are different loans available to help pay for graduate school. For example, direct unsubsidized loans or grad PLUS loans are offered through the federal government.  

How to offset the cost of an MBA

There are a few ways to offset the cost of an MBA: 

  • Scholarships: Scholarships may be available directly from each institution based on academic merit, financial need or prior work experience. Private scholarships are another option. And public or private grants can also pay for a portion of students’ studies on an as-needed basis. 
  • Fellowships: A fellowship is a short-term working arrangement. It can be awarded by a government organization, independent association or private organization. During a fellowship, you may be asked to help with research, training or other work opportunities.
  • Federal financial aid: Graduate students can receive federal financial aid based on need, just like with an undergraduate degree. A Free Application for Federal Student Aid (FAFSA®) form must be filled out in order to apply for this type of aid.
  • Employer-sponsored aid: For experienced professionals, employers may pay for some or all of their MBA tuition. But depending on the employer, there may be requirements to take advantage of this benefit, like staying employed with the company for a certain amount of time.

Benefits of an MBA

Getting an MBA offers a number of potential benefits. Graduates might expand their hard skills and soft skills, create networking opportunities and generally advance their careers and earning potential. 

But there’s plenty to consider when deciding if an MBA is right for you. First, there’s the cost. And like an investment, spending thousands of dollars on education comes with some risk. There’s no guarantee that a job or higher pay will be waiting for you after a new degree. Plus, taking a break from work to go back to school—or balancing the two—comes with its own unique challenges.

MBA program applications and requirements

The admissions process can vary depending on the school and type of program you’re applying for. But here are some of the typical requirements:

MBA application forms

Forms might include basic details, like prior education and work history.

Undergraduate transcripts

Transcripts are a way to show your academic track. They might include your GPA and previous coursework.

Standardized test results

Certain MBA programs require test scores from standardized tests, like the Graduate Management Admission Test (GMAT) or the Graduate Record Examination (GRE).

Resume or curriculum vitae (CV)

Because many MBA programs require previous professional or internship experience, a resume or curriculum vitae (CV) is a common admissions requirement. 

Personal essay

Some schools may request a personal essay—or multiple essays—from applicants. A personal essay or statement might give you a chance to explain why you may be a good fit for the program.  

Letters of recommendation

Some MBA programs request letters of recommendation as part of their application. You could consider asking references who will speak highly of your character and professional qualifications, like a former coach or colleague.

Relevant work experience

Some MBA programs require applicants to have multiple years of relevant work experience to be considered for admission.

MBAs in a nutshell

While an MBA doesn’t guarantee a promotion or a bigger paycheck, it can provide specialized experience and other opportunities. 

But an MBA is a big investment in both time and money, so take time researching all your options before deciding on a program. 

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