Paying for a Master of Business Administration (MBA) can include paying anywhere from $ 50,000 to over $ 200,000, the approximate low and high end of total tuition and fees for an advanced business degree. Even more funding may be required when cost of living and course materials are taken into account.
Discouraging? Yes, but don’t let the high price discourage you. According to the National Association of Colleges and Employers, those with an MBA make an average of $ 20,000 more than graduates with a bachelor’s degree in business. Five years after graduation, MBA graduates typically earn between $ 90,000 and $ 120,000 per year. These numbers are even higher for graduates from more selective schools.
To reap the rewards, one of the first decisions MBA seekers must make is how to pay for everything. So let’s take a closer look at how we can best put it together.
7 ways to pay for an MBA
1. Find free MBA money
Funding an MBA begins with finding scholarships, scholarships, and grants that typically don’t need to be repaid.
This type of “free” money is typically given to MBA students on a merit rather than a financial need basis. As such, qualifications are often tied to GPAs, GMAT scores, and job performance. Even if you think you might not qualify, these are worth exploring. According to Poets and Quants, an online publisher of MBA programs, scholarship offers for business schools have increased 30% over the past three years. The prices are $ 200,000.
This money usually comes either from school or from external business and professional associations. Everyone has their own application and selection process with different requirements. For example, all students admitted to Columbia Business School will be considered for the school’s earnings support, and educational institutions participating in the prestigious Forte Fellow will automatically consider all eligible applicants. However, students interested in the Riordan MBA Fellow at UCLA must submit a separate application.
When searching for schools, ask about Scholarship Applications and Qualifications, Scholarships, and Scholarships, and consider applying to schools that have programs that you may qualify for.
2. Use employer funding for MBAs
The skills gained through an MBA can benefit your current job, so employees in good standing may be able to obtain funding from their employers.
There are two types of employer funding that aspiring MBAs can receive:
- Reimbursement of tuition fees
- Employee sponsorship
Tuition reimbursement is the most common type of employee-related assistance for MBA students. This is the case when an employer reimburses an employee for training costs. So you still need to find a way to get school fees and other school expenses covered upfront. Every employer has its own requirements that must be reimbursed, such as: B. Working hours, GPA requirements, or coursework that must be relevant. So be sure to ask.
Employee sponsorships are less common if an employer agrees to pay part or all of the MBA in advance. As a rule, they are only offered if the employee agrees to certain conditions, e.g. B. staying with the company for a certain number of years.
According to the US News and Report, MBA funding is provided by employers in competitive, fast-growing industries such as technology and healthcare, and often comes from consulting firms or large corporations. Check with HR or see the employee handbook to see if your company has a program.
3. Apply for federal financial aid
The federal government receives financial support for an MBA through the free application for federal financial support (FAFSA).
There are up to four types of help MBA students can get:
- Federal and state grants
- Federal work study
- Unsubsidized direct loans
- Direct PLUS credits
The FAFSA has the keys to needs-based assistance such as scholarships or federal work studies that typically offer part-time work in a job related to your MBA through school.
Unsubsidized direct loans are available to all graduates and students alike, although advanced graduate students get higher amounts – up to $ 20,500 per year. It comes with a low fixed rate that is set annually by Congress and stays the same for the life of the loan, and it offers federal repayment options like income-based repayment.
If additional funding is needed, a Direct Grad PLUS loan can be taken to fill the gap. Direct Degree PLUS loans have a fixed interest rate but are typically higher than direct loans and require that the applicant not have an adverse effect on their credit rating.
Applications for FAFSA open each October for the following school year and remain open for 18 months.
4. Take out a private student loan
Private student loans, which come from private lenders like a bank or credit union, are designed to help students fill a funding gap after exhausting other financial aid options such as scholarships, grants, and federal student loans.
Private loans can cover up to 100% of school attendance costs. They come with either fixed or floating interest rates set by each individual lender based on the applicant’s credit and financial history. While the fixed rates remain the same for the life of the loan, the floating rates can fluctuate with the market.
MBA seekers with good financial records or who are applying with a co-signer with strong credit can qualify for interest rates that are competitive with Federal Direct PLUS loans. Hence, it is a good idea to compare both interest rates.
Private lenders also have their own repayment terms. Look for lenders with multiple repayment options for more flexibility in balancing the total cost of the loan and finding a monthly payment that fits your budget.
Learn more about private MBA student loan options.
Apply for a private student loan
5. Get an MBA assistantship
An MBA student assistantship involves devoting a set number of hours to assisting the school faculty with research and administrative tasks in exchange for money to cover tuition fees. In contrast to the Federal Work Study, which is a needs-based federal grant, university assistants are awarded to high-performing students. However, each school has its own qualifications. So be sure to ask.
6. Use your savings
Any dollars left on a 529 account that is normally set up to pay for basic education can be used to pay for an MBA with no tax penalty.
Using savings to pay for an MBA can help reduce future debt. However, if you mine too much, money will drain your safety net, which can lead to other financial problems later. It’s about finding a balance that works for you. So before using up your savings, you should weigh your ability to repay loans and how much emergency savings may be required.
7. Go part time to get an MBA
Part-time employment for an MBA takes longer to attain this high-income degree, but can reduce the immediate financial burden associated with cost recovery.
When fewer credits are awarded, the tuition fees are lower, and spreading the credits over time can create a schedule that allows you to keep a high-income job. This way you can cover some of the costs out of pocket, borrow less and also spend a lot of time on schoolwork.
To Pay for an MBA: Plan Ahead
It is not easy or quick to gather all the necessary resources. It requires research, dedication and luck for you, business acumen.
To get money that doesn’t have to be paid back, focus on submitting great applications for the school and applying for programs that match your qualifications and goals. Work, school, business associations, and the federal government may all have options.
Then, consider using savings, whether visiting full-time, part-time, or taking out loans. Play around with a student loan calculator to find out what the prices and terms really are, and start devising a repayment strategy.
Appreciate your student loan
If you do it right, you can get an MBA degree that will help you make more money and pay back loans quickly.
How to Pay for an MBA first appeared on College Ave.