Make a plan to pay for an MBA
Business school is an investment. Using a 1-2-3 approach to paying for business school, however, can help you be more in control of its costs.
- Start with “free” money. Supplement your savings with money you don’t need to pay back. Apply for scholarships, grants, fellowships, and assistantship positions.
- Apply for federal student aid. Fill out the Free Application for Federal Student Aid (FAFSA) to see if you qualify for government loans and grants as well as state and school aid.
- Consider a responsible private student loan. A private MBA loan can help pay for any leftover expenses you may have.
1. Start with “free” money
You can use your savings to help pay for business school. Talk to a financial advisor if you have questions about how much of your savings you want to use for school.
Business school-based scholarships and grants
Some business schools may have scholarships, grants, or assistantships that their students can apply to. Grants are often need-based while scholarships can be need- or merit-based. Assistantships are typically merit-based. Students may be able to get tuition remission and/or a stipend for 10 – 15 hours of work on-campus. Look at the websites of the schools you’re applying to and talk to their financial aid offices to find out more.
Some business associations offer scholarships, fellowships, and grants for MBA students. You can reach out directly to the organizations for more information or ask school department heads for recommendations on which scholarships, awards, or grants may be right for you. Here are a few of the organizations with scholarship programs:
- Forté Foundation for Women: Full-time and part-time female business students can apply for fellowships through this program. Students must be enrolled in one of 50+ partner schools to qualify.
- National Black MBA Association: Through this association, graduate students can compete in the National Black MBA Case Competition for the opportunity to win a $50,000 prize and gain access to job opportunities in the business field.
- Prospanica: Graduate business students of Hispanic or Latino heritage are eligible for $5,000 or $2,000 awards from this organization.
You can also search thousands of scholarships by visiting our free Scholarship Search tool.
If you’re already in the workforce, you may be eligible for a company-sponsored MBA. The New York Times reported that 85% of employers had a tuition funding program for MBA students as of 2010. Part-time tuition reimbursement or remission programs tend to be the most common, but select companies like Deloitte and Bain & Company offer full-time options.,
In these programs, companies will pay for some or all your MBA program’s costs. In exchange, you must return to the company and complete 2 – 3 years of work once you’ve graduated. To qualify for these types of programs, you usually need to have worked at the company for 2 – 4 years and have proven yourself to be a high-performing worker.
If your employer doesn’t currently offer tuition sponsorship or remission, you can try talking to management and the HR team to see if they would consider it. Many businesses see the value of an MBA and may be willing to contribute to school costs.
2. Apply for federal student aid
To see if you qualify for any federal loans and grants, you’ll have to fill out the Free Application for Federal Student Aid (FAFSA).
The FAFSA can give you access to the following types of federal, state, and college aid:
- Federal Direct Loans: These loans (previously called “Stafford Loans”) offer fixed interest rates and are unsubsidized, which means you’re responsible for paying all the interest on them. You can usually borrow up to around $20,000.
- Direct Graduate PLUS Loans: If you need additional help covering expenses, you may qualify for PLUS Loans. These loans are credit-based and typically have a higher interest rate than Federal Direct Loans.
- School-based aid: Your school may distribute additional aid based on the FAFSA. You could qualify for loans, scholarships, or a Federal Work-Study position, which allows you to work on campus part-time to earn money for your living expenses.
- State aid: Like school-based aid, state financial help varies. You’ll find out what your state offers when you file your FAFSA.
3. Consider a responsible private student loan
After you’ve considered your options for “free” money and financial aid, you can apply for a private MBA loan. Private student loans can help pay for any gaps in your school tuition, fees, or living expenses.
Private MBA loans are available through a bank or credit union. These loans are based on your credit—the better your credit, the better the chance you’ll be approved. Private student loans are available with fixed or variable interest rates.
For example, the Sallie Mae MBA LoanSM is available with a fixed or variable interest rate. It also gives you the option to make payments while you’re in school or defer until after you graduate. If you’re a highly qualified loan candidate, you may receive a lower interest rate than with a Federal Graduate PLUS Loan. As with federal student loans, you’ll have to pay back the money you borrowed, plus interest.
Deferring undergraduate student loans
If you have private or federal student loans from your undergraduate degree, you can consider deferring them while you’re in business school so you have one less bill to pay. Contact your loan servicer to find out what options you have. Be aware that although you won’t have to make monthly payments on these loans while you’re studying, they will likely still accrue interest.
How to borrow responsibly
Borrowing is often a necessary part of getting the education you need to start or further your business career. But it’s important to borrow responsibly so you can pay back your loans on time after you earn your degree. Limit your borrowing to the amount you’ll need for the cost of tuition and related expenses. Evaluate what your anticipated monthly loan payments might be versus how much you expect to earn in your post-school career. You can research your potential salary through professional associations and the U.S. Department of Labor, which lists the median pay for many fields.