Students who enroll in the UC Davis Graduate School of Management's online MBA program in early 2022 will have an opportunity to defer half of their tuition at zero interest until after graduating as part of a new pilot program.
University of California Davis announced the new pilot program Thursday. It will be offered to new online MBA students enrolled in the program, MBA@UCDavis, in the January and April 2022 cohort.
By offering the opportunity to apply for interest-free deferred tuition, the university's aim is to reduce the financial barriers to pursuing an MBA. UC Davis is believed to be the first nationally ranked business school to provide such a program, said H. Rao Unnava, dean of the Graduate School of Management.
"Our hope is that this is perhaps a groundbreaking way of doing things, because in a sense we are reducing the cost of education and therefore there will be many universities that will be following this lead," Unnava told the Business Journal. "We are really glad that UC Davis is the one setting the pace for this."
Eligible students will pay tuition for the first half of the program and can defer tuition payment with zero interest charges for the second half of the program, net of any scholarship funds, until after graduation.
After graduating or withdrawing from the program, the students will pay 10% of their annual gross income as monthly payments. Those participating will have 10 years to pay off the deferred tuition.
Unnava said the Graduate School of Management's largest program is its online MBA offering. Since it was launched in fall 2019, approximately 550 students have enrolled.
Currently, there are nearly 60 students from the Sacramento region that are participating in the program. One hope for the pilot program, he said, is to draw even more students from the Sacramento area and surrounding regions.
"Even though online programs are technically supposed to be neutral in terms of where its students come from, up to 75% of students typically come from within a 150 mile radius, and that is true of our online MBA program as well," Unnava said.
The pilot program is a partnership between the UC Davis Graduate School of Management and EdAid, a provider of deferred tuition options for higher education. It is also being supported by the school's partner, 2U Inc. (Nasdaq: TWOU), which operates the portal for the online MBA program.
"This model of shared investment in student outcomes is the future of higher education funding," said Tom Woolf, founder and CEO of EdAid, in a news release. "As we emerge from the global pandemic, UC Davis, 2U and EdAid are committed to widening participation to ensure big, bold thinkers have the on-ramp to solve society's biggest challenges."