MBA Meltdown: Schools Slash Tuition as AI Shakes Degree Value

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MBA Meltdown? Schools Slash Tuition as AI Shakes Degree Value

Many MBA programs are significantly cutting tuition – by as much as 50% – because fewer people are applying this year. Schools considered to be mid-range are bearing the brunt of this decrease, while the most prestigious programs are either maintaining or increasing their prices.

The recent changes in the MBA market are leading people to wonder if it’s facing a major decline, or if it’s just adjusting its prices. Most tuition discounts are happening at business schools that aren’t considered top-tier. Additionally, the rise of artificial intelligence has diminished the value of the practical skills that an MBA used to guarantee.

MBA Tuition Cuts Cluster at Mid-Tier Programs

Purdue’s business school is significantly lowering tuition by 40%, bringing the cost down from $60,000 to $36,000 for new students. Johns Hopkins is offering half-tuition scholarships to students in all programs. And UC Irvine is cutting prices for its Flex and Executive programs by 38%.

According to the Wall Street Journal, these discounts are happening because demand has decreased, leading to the company scaling back its operations.

This year, many U.S. graduate programs have seen a 20% to 30% decrease in applications. Some schools have experienced an even steeper drop in international applications, with numbers down as much as 43%.

Many business schools are significantly reducing MBA tuition, with some cuts reaching 50%. For example, Purdue has lowered its tuition from $60,000 to $36,000, Johns Hopkins is offering 50% scholarships, and UC Irvine has decreased tuition by 38% for its Flex and Executive MBA programs. Despite these cuts, MBA applications are still down 20-30% overall. Interestingly, the schools offering these discounts aren’t among the top 20 business schools.

— Gagan Dhillon (@neuracap) May 14, 2026

New federal loan limits starting in July 2026 will cap graduate school borrowing at a total of $100,000. This change could create financial challenges for many two-year programs, which often cost $150,000 or more *before* factoring in everyday living expenses.

The U.S. Department of Education recently announced that new loan limits, made possible by President Trump’s Working Families Tax Cuts Act, will take effect this summer. These limits are designed to prevent overborrowing and encourage lenders to carefully review their expenses.

Signal Stays, Skill Gets Repriced

Investor Gagan Dhillon believes the recent changes aren’t a failure, but a necessary adjustment in how MBA programs are priced. He explains that traditionally, MBA programs have bundled two separate offerings together at a single cost.

Traditionally, an MBA has offered two main benefits: proving your abilities to employers and actually improving those abilities. Now, AI is making it possible to gain those skills without the cost of an MBA. This means business schools focused solely on teaching skills are struggling, while those known for their prestige and networking opportunities are becoming even more valuable.

Top business schools like Harvard, Stanford, and others are maintaining or increasing their tuition costs for the upcoming year. Interestingly, the schools that *are* lowering tuition aren’t ranked among the top 20, according to recent data.

Despite this, recent surveys show that the demand for MBA graduates among recruiters has decreased from 92% in 2019 to 71% in 2024. The number of entry-level job postings has also dropped by approximately 35%.

In my research, the Wall Street Journal presented a more comprehensive view of the factors contributing to the current pressures on tech workers than, for example, Vivek Dhillon did. They pointed to issues like visa complications, restrictions on lending, and typical downturns in hiring cycles, in addition to the impact of artificial intelligence.

The upcoming application season will reveal if top-ranked schools can maintain their appeal even with fewer entry-level job opportunities. If not, tuition increases could spread to schools beyond just the lower-ranked programs.

MBA programs used to guarantee a clear path to a job, but that’s changing. Over the past two years, top firms like McKinsey, Goldman Sachs, and Bain have significantly reduced their hiring of MBA graduates – by as much as 40% – because artificial intelligence is now handling much of the work previously done by entry-level analysts. As one person pointed out, even a big price cut for the MBA degree itself won’t solve the problem if there aren’t jobs available for graduates.

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2026-05-14 16:26