Does getting an MBA feel out of reach? While the rewards of having a Master’s in Business Administration are numerous, for many, figuring out how to pay for an MBA all but takes it off the table as an option. Others worry that the benefits of having an MBA won’t be worth the costs, both in terms of finances and in terms of the huge amount of time and effort spent getting a degree.
An MBA can absolutely be worth it if you plan wisely. A recent survey by the Graduate Management Admission Council reports a median salary of all MBA holders of $115K, which is $50K higher than the $65K median for those who just hold a bachelor’s degree. The same report had a positive forecast for the growth of employment opportunities for MBA holders over the next five years. But many who are just beginning to consider business school are still stuck figuring out how to pay for it in the short term and anxious about taking on the large debts that it can require.
It’s true that paying for an MBA can be daunting, but there are ways to ensure that you’ll get a valuable business school experience without necessarily breaking the bank.
By creating a budget, tracking down funding opportunities, and educating yourself about the many loan options that are out there, you can take the reins on your MBA experience so that you can focus on getting the most out of your degree.
Creating a Budget for Your MBA
For those who are seriously considering applying for an MBA, it’s crucial that you design a thorough budget that accounts for as many costs as possible. This means a full breakdown of tuition as well as the other, smaller expenses that can build up greatly over two to three years of school. It can be hard to foresee what a new program will involve, but the more detail you’re able to come up with, the better, and it’s better to (slightly) overestimate how much things will cost than underestimate it.
Some of the budget items that every MBA candidate should create a budget for are:
- Tuition / costs per credit hour, which vary greatly depending on your school of choice
- Technology fees, which may be required at your university
- Instructional support fees such as tutoring, network and career services, and other advising services the school might offer, which are worth investing in
- Textbooks and access keys, which again may be required at your university
- Other personal costs including new computers or other software
In planning a budget, it can be helpful to speak to someone doing the same MBA program or a similar one to yours. If you have access to such a resource, ask about the specific unexpected costs that have come up throughout the year, as well as how much time they have had to continue making an income while putting themselves through school. The answers may be sobering or inspiring, depending on your mood, but the insight you’ll gain will give you a much stronger basis for making an informed decision about your schooling. Ultimately, talking with others about they’ve decided on how to pay for an MBA will prove beneficial in the long run.
Finding Outside Funding for Your MBA
When you create your MBA budget, you are doing so with the assumption that you’ll be taking on 100% of the expenses. Fortunately, many options exist to help support students through grad school, from awards like fellowships and scholarships that cover part or all of a student’s expenses to loans that can greatly reduce the immediate financial pressure of getting an advanced degree.
Fellowship, Scholarship, and Grant Opportunities
There are numerous awards that can greatly reduce the costs of an MBA program, covering, at most, enough to make tuition free of charge. While many of these fellowships, scholarships, and grants are focused – either on an area of specialty, a shared student background, or a particular school – there are plenty of options out there.
It’s worth applying to every scholarship that you are a good candidate for, because beyond the funding itself, each award adds to your resume, which in turn gives you a leg up in applying to other programs for more funding.
It’s not worth applying to programs where you aren’t a viable candidate, as most applications have fees that are not worth paying if you fall outside of an award’s criteria. Don’t worry, though: there are options out there for everyone.
Military GI Bill
Those who have served in the military are eligible for funding through the GI Bill, which provides financial assistance to qualified veterans as well as their family members who want to pursue higher education. The GI Bill has existed since 1944 and can cover a portion or all of the cost of how to pay for MBA programs across the country.
If you are a veteran pursuing getting your MBA, GI Bill programs should be your first stop as a funding resource. Since the fund is focused exclusively on military personnel, it makes for a much smaller applicant pool, and it exists specifically to help veterans pursue further professional training after completing their military duty.
For more information about the GI Bill’s benefits as well as other resources for veterans, take a look at the US Department of Veterans Affairs website.
Even with the many scholarship and public funding options out there, many who pursue an MBA need to look to loans to make the economics of grad school possible. There’s nothing wrong with taking out loans for school, and in fact in some cases receiving a loan can have a ripple effect, encouraging other programs to provide you further loans or even direct funding. What’s important is that you take out loans from legitimate resources who are offering you an agreement that’s actually viable for you (again, another reason why your budget will be so important).
For a list of the best public and private loan options, take a look at NerdWallet’s list of the 8 Best MBA Student Loans.
FAFSA (Free Application for Federal Student Aid)
Any US citizen looking for a loan for grad school should apply to the FAFSA, which is the largest provider of financial aid for college in the US. FAFSA offers a variety of loans and even scholarships, with awards of up to around $10,000. The application is free and puts you in the running for a variety of financial aid options, including Federal Pell Grants as well as subsidized and unsubsidized student loans.
Beyond the federally-supported packages available through FAFSA, many private loans exist to help students navigate how to pay for an MBA. These loans generally take your credit score into consideration, and typically can lend as much as the full cost of attending school. These loans can sometimes offer lower interest rates than comparable federal loans. It’s imperative when considering one of these options to do your research on the organization and ensure that they are offering fair, well-structured loan agreements whose payment plan is sustainable for you.
As you assess which funding option will be most beneficial to you, don’t hesitate to reach out to the financial aid officers at the schools you’ve chosen. Their job is to help both prospective and new students make informed decisions about budgeting for grad school.
When searching for funding, there is nothing more useful than a one-on-one conversation with a knowledgeable administrator.
If you decide to reach out to a financial aid officer, be upfront about financial constraints, as you will benefit most from a realistic discussion of your needs. Beyond packages the school might offer, financial officers are likely to know about other awards and loan options that you can choose from.
One last perk of speaking to a financial officer (and it’s a big one): admissions experts have revealed that students who make the effort to reach out and educate themselves about financial aid offers are more likely to receive generous funding packages. The effort to connect with financial offers shows dedication and purpose, and by introducing yourself, you’ll be more than an anonymous application.
Taking the Next Steps
Once you’ve thought through a budget and the means by which you’d like to find funding for your MBA, it’s time to start looking seriously at business programs to figure out where you like to apply. This is one of the most important steps in charting your academic and professional future. For more information, be sure to check out our list of the best affordable online MBA programs.
For those still assessing if an MBA program is right for them, take a look at our Online MBA by the Numbers guide and our article “Is an Online MBA Worth It?”