Earning a Masters of Business Administration (MBA) degree isn’t cheap, but the investment can easily pay off. After all, a graduate degree can help you qualify for a broader range of advanced careers or to learn the skills required to build your own successful business.
To pay for an MBA, you may want to apply for fellowships, scholarships or loans. You may also be able to take advantage of employer-sponsored programs. Read on to learn more about some of the best ways to finance your degree.
MBA financing options
There are several strategies you can use to pay for an MBA while you finish your degree or after you’ve graduated. Some are “free” money, while others must be paid back over time.
MBA fellowships, scholarships and grants
When it comes to paying for an MBA, fellowships, scholarships and grants should be pursued first, since you don’t have to pay back this type of aid. Many fellowships and grants are given by business schools, though you may need to meet requirements based on merit or financial need. You’ll also find MBA scholarships that could be offered based on a professional organization you belong to or a profession you plan to join.
Some elite schools even offer full scholarships to applicants who meet their criteria. For example, Rice University’s Jones Graduate School of Business offers qualified applicants the chance to pursue a MBA with their tuition and fees covered, plus stipends for books and living expenses.
In many instances, top employers will pay for their eligible employees to pursue an MBA while they continue working full time. Not all employers offer this perk, so make sure to inquire about workplace scholarships when you are considering jobs.
Also keep in mind that this perk may be offered in the form of a tuition reimbursement program, which will help pay for costs once the degree is attained. In this case, you would cover tuition and fees through other means like an MBA loan, then use any tuition reimbursement assistance you qualified for to pay yourself back.
Because many people pursue an MBA later in life, it’s not uncommon for individuals to fund their education with money from a savings account. In this case, you would use cash you already have to finance MBA tuition and fees.
While it’s okay to pay your way through school, it’s likely not worth it to deplete your emergency fund to pay for an MBA. Most experts suggest keeping three to six months of expenses tucked away for emergency situations and surprise bills, and you may need an emergency fund more than ever if you pursue an MBA while you work full time.
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 to take advantage of lower interest rates. With private student loans, interest rates can be incredibly competitive, and that’s especially true if you have a high credit score.
The bottom line
If you’re worried about how to pay for business school, remember that you don’t have to do it alone. You can seek out scholarships and financial aid that can lessen the cost, and MBA loans can be used to cover the rest. Ideally, your future salary with an MBA will be more than enough to repay any money you have borrowed, plus interest that accrues.
Also note that, once you graduate with a MBA, you may be eligible for loan forgiveness plans that let you pay less toward your loans on a monthly basis before forgiving your balances altogether. Public Service Loan Forgiveness (PSLF) can be a good option if you plan to use your MBA to work in the nonprofit sector, as this program lets you repay your loans on an income-driven plan for 10 years while you work in an eligible position before forgiving your remaining loan balances. Meanwhile, income-driven plans like Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE) let you pay a percentage of your discretionary income for 20 to 25 years before forgiving whatever loan amounts are left.