There’s no way around it: an MBA is expensive. But it’s an investment: usually, the financial cost of undertaking an MBA is going to pay off throughout the rest of your career. But you still have to find a way to fund your MBA studies, not to mention living expenses and other costs.
Most MBA students end up cobbling together a combination of funds from various sources, including scholarships, loans, savings, and more. Here we cover the most common types of MBA funding.
Scholarships from universities and business schools tend to be based on one of two factors: academic excellence, financial need, or both.
For the scholarships based on academic performance, schools will often look at a combination of factors, including GMAT score and undergraduate GPA. For need-based scholarships, your profile will be evaluated based on your background, your financial situation, and what you can contribute to the MBA cohort.
Some business schools additionally offer scholarships for students pursuing particular subject areas or industries, often backed by alumni endowments.
Applications for program-specific scholarships usually run parallel to MBA applications, with the scholarship deadlines often coming a little earlier than the final program deadline. This is one reason it pays to get your MBA application in before one of the earlier deadlines: there can be a better chance at winning a scholarship.
Schools usually publish their available scholarships online. Some also share information about external scholarships relevant to their study programs; if you don’t fit into one of the scholarship categories above, then an external scholarship—funding offered by organizations outside of the business school—might be right for you.
But with such a myriad of external scholarships available, it can be hard for schools – let alone potential students – to keep on top of them all.
Creative MBA students have found funding from all corners of society, from the Fulbright Scholar program, to research institutes, to cultural institutions they’re connected to.
There are also scholarships for international students from particular countries, students from specific cities or states, students with disabilities and, increasingly, women in business.
Loans for MBA students
If you are privileged to have the option, then personal loans from family and friends can be a relatively affordable way to fund your MBA studies. The people who love you and care about your future are much more likely to offer favorable interest rates than the bank. Although the bank is still an option worth considering.
Many countries have student loan schemes, often funded through governmental organizations. In the US, schemes like the Stafford loans are designed with students in mind, and generally offer more lenient terms than private loan institutions.
State-backed loan schemes tend to only offer support to domestic students, or to international students who can have a resident co-sign for them. For international students without a resident co-signer, finding loans can be much tougher.
One organization that aims to make this easier is Prodigy Finance. Started by a group of MBA grads, Prodigy offers loans to international students who have been accepted to top MBA programs around the world.
Another is IEFA, which offers loans to international students in the US who are backed by a cosigner in the US.
If you’re fortunate to be able to save up the tens of thousands of dollars generally required to pay for an MBA, then congratulations! For most of the early-to-mid-career professionals looking to start an MBA program, they’re not yet at a place in their careers where this is an option.
However, saving up a smaller chunk of funds is still an option. Perhaps you can use your savings in combination with one or several of the other funding options to cover the study fees and supported costs of your MBA.
An MBA won’t only add value to your résumé but also to your employer’s business.
If you are expecting to stay with your employer following graduation, then it could be worth asking your employer whether they would be willing to contribute to the costs of your study.
They will benefit from the connections – often international ones – you will make during the program, as well as your new skills. And if you are an international student wanting to use your study time to hone a second language, perhaps English or Mandarin, then it won’t only be you but also your employer who reaps the rewards of your increased ability to do business in another language.
Employers may agree to cover an employee’s tuition fees and perhaps also living costs with an expectation of loyalty: that the employee will stay with the firm for a certain amount of time following graduation. MBA students and their employers sometimes make agreements that if an employee leaves the company earlier than expected, they will pay back a portion of the MBA costs.
In order to give yourself the best shot at gathering funding for your MBA, it pays to do your research and start early.
Financial aid offices within business schools often have tried and tested ideas for funding, so if you’re having difficulty, remember to make use of their support.
Image: Money by khrawlings CC BY 2.0 (cropped)