How to pay for an MBA
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The modern MBA looks a lot different than it did just a decade ago. The number of fully online MBA programs from accredited business schools has increased by 85% between 2011-2012 and 2021-2022. This makes earning an MBA more achievable for many potential students, but cost can still be a barrier. Top-ranked institutions may cost between $80,000 and $118,000, but some Ivy League schools charge even more.
As of 2018, 40% of graduates from Duke, Dartmouth, University of Michigan, Cornell and University of Chicago took on at least $100,000 in debt to get an MBA.
Thankfully, there are other ways to get funding for your education. Consider grants and employer-funded programs along with scholarships and fellowships in addition to loans.
Ways to pay for your MBA
Don’t let tuition sticker shock deter you from achieving your educational and professional goals. Schools, organizations and businesses all offer programs that can make your degree more affordable, and student loans can fill in any gaps.
MBA fellowships, grants and scholarships
Fellowships, grants and scholarships are types of funding for your education that you do not repay. Many of these programs consider your academic record, but some are need-based or geared toward specific groups of students. Depending on the type of award or fellowship, you may also need to demonstrate your professional experience, volunteerism and community leadership.
Corporations, foundations and schools all offer this type of aid. With some programs, you may have access to career mentors, networking opportunities and summer work experiences in addition to the basic aid package. To find opportunities, you may use a scholarship search engine or check with your state’s or college’s financial aid department.
Many companies recognize the benefits of investing in their employees through tuition assistance programs or scholarships. Statista found that 47 percent of surveyed employers offered tuition assistance to employees in 2020; however, a study conducted by InStride found that only 25 percent of employees even start the application process for reimbursement.
Employers find that these programs not only help develop leaders from within the company but can also serve as a recruitment and retention tool. According to a Gallup survey from 2017, 45 percent of millennial respondents said that they would change employers to take advantage of tuition reimbursement benefits.
Talk with your manager about educational opportunities through the company. Programs may offer upfront assistance or reimburse you for the successful completion of classes. They may also limit educational options to degrees that align with company priorities or require you to continue working for the company for a defined period of time after graduation.
MBA student loans
Most graduate students take out student loans to cover the cost of tuition and fees, and MBA students are no exception. When it comes to borrowing money via federal student loans for a MBA, options include Direct Unsubsidized Loans, which let you borrow up to $20,500 each academic year, and Direct PLUS Loans, which let you borrow up to the full cost of attendance.
Borrowers often turn to private student loans when they surpass borrowing limits with federal student loans or are offered lower interest rates. If you have a high credit score, private student loan interest rates can be competitive, although these loans don’t offer the same benefits and protections as federal student loans.
Business schools often encourage applicants to spend a few years in the workforce before starting their MBA. Professional experience equips students with an understanding of the business world and the practical application of their new skills.
If you begin your professional experience knowing you will return to the classroom, you can start saving toward your goal. Using personal savings can reduce your dependence on loans that must be repaid — with interest.
But use caution when pulling from your savings account. Most experts suggest keeping three to six months of expenses tucked away for emergencies and surprise bills, and paying for an MBA out of pocket is not worth it if you deplete your emergency fund.
Getting an MBA is an expensive endeavor, but it’s also becoming more flexible. An increasing number of online programs could open your options without having to relocate. If you want an MBA and don’t want to take on a lot of debt, consider a remote program. Louisiana State University offers an MBA that costs just $12,474, for instance. An MBA often opens up new career opportunities for people seeking executive roles and could pay for itself in the long run.
Frequently asked questions
How much should you expect to pay for an MBA?
MBA Today reports total tuition fees for top MBA programs from $55,727 to $161,810. However, your price could be higher or lower depending on where you attend school, which type of program you enroll in and how long it takes you to complete your degree. Also, remember that you’ll need to budget for books, room and board, supplies and travel.
What funding options are available to international MBA students?
International students may apply for MBA scholarships and fellowships from their school and other organizations. Certain qualified non-U.S. citizens may apply for federal loans, and some international students can qualify for private student loans with a co-signer. Your home country or institution may offer student support for international study as well.
Is an MBA worth it?
An MBA can qualify you for management positions in your organization and higher pay, but you’ll have to weigh this against the potential debt you’ll leave school with. Ultimately, an MBA program is worth it if it helps you achieve your career goals and makes sense financially.
Why is an MBA so expensive?
Graduate programs require an investment in faculty, research and resources. Business schools also compete for knowledgeable professors with business experience. Several schools, however, have taken steps to rein in costs by implementing guaranteed tuition and tuition freezes throughout a program.
How do I pay for an executive MBA program?
Executive MBA programs tailor their curriculum to executives looking to develop their leadership abilities while continuing to work. The Executive MBA Council’s Annual Member Program 2020 survey found that the average program charges $82,883. You can pay for an executive MBA program as you would any other MBA program — with scholarships, grants, tuition reimbursement and student loans.