MBA News: Sponsorship Terms Optional for Confident MBAs

A full ride to business school and the guarantee of a job after graduation—it sounds like a sweet deal, but it can also mean limiting your options. As The Wall Street Journal explains, MBAs are increasingly opting to pay their way out of corporate sponsorship agreements in favor of pursing other job prospects in an improving market. Many are risking additional debt in hopes of finding more satisfying opportunities or higher pay.

Degree sponsorship, which promises tuition payment or reimbursement, requires employees to commit to a term of post-graduation employment, usually two years, in exchange. MBAs who break this agreement must repay the tuition assistance, with interest, to the sponsoring firm—in many cases, this can accrue to more than $100K.

“The choice of what you do after business school should be based on what you want to do long term, rather than short-term economics,” advised one second-year Harvard Business School student who borrowed $90K to pay his way out of an employment agreement with Boston Consulting Group in favor of a position with a private equity firm. Others, The Wall Street Journal reports, are trying their hand at entrepreneurial ventures. As career possibilities brighten, more students are viewing the employment terms of these sponsorships as more of an “option” than an “obligation.”

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