Completing an MBA can be a transformative experience, but they do not come cheap. There is no such thing as a ‘free MBA.’ It’s more than the tuition fees: especially when combined with the cost of supplies like textbooks, accommodation, food and modest living expenses, the total cost of an MBA can add up. Full-time students also need to factor in the opportunity cost of not working and earning a salary for one or two years.
Many MBA graduates report a strong return on their investment, but the degree requires careful financial planning. There are multiple sources of funding that students will use to pay for an MBA; they can combine their own savings or family assistance with partial or full tuition scholarships, corporate sponsorship and loans. It is important to know how you’ll pay for the degree before applying and to have backup options in place in case your scholarship application is unsuccessful.
Business schools employ financial aid teams that can help guide you through the process. These offices can be valuable resources in the hunt for sources of money for an MBA, and they may be able to tell you about some of the more obscure grant and scholarship opportunities out there. Sometimes even a quick browse around a business school website can raise awareness about funding possibilities.
Paying for an MBA with scholarships and grants
Many business schools will discount the cost of tuition through scholarships, which have been increasing in recent years as schools compete to attract the best and brightest students or those from diverse backgrounds. Often, students with the most competitive profiles can even negotiate a higher scholarship offer.
There are two types of scholarships: merit-based and needs-based. Merit scholarships are awarded at the end of a competitive application process or by a committee, to MBA candidates who demonstrate outstanding academic achievement, professional accomplishments and leadership potential, regardless of their financial situation. Needs-based awards are based solely on a candidate’s financial status and are usually designed to promote greater diversity.
There are many other grants that are offered to a limited range of MBA students, typically those of a certain religion, ethnicity, nationality, or academic interest, for example.
External organizations will offer other options, such as governments and private foundations. Some scholarships, such as those offered by the US-based Fulbright Commission, are highly competitive. So it’s worth checking the deadlines for scholarships and researching the application requirements for each.
FIND MBA has an MBA Scholarship directory, though we do not officially endorse any these institutions or creditors, nor can we vouch for the accuracy or quality of the information and/or services they provide. The resources below might still be of use to prospective MBA students:
- Fulbright Commission
- British Council
- British Foreign and Commonwealth Office
- DAAD - German Academic Exchange Service
- Nuffic (Netherlands)
- Erasmus Mundus
- educationUSA - United States State Department Guide for International Students
- Institute of International Education (IIE)
- Ford Foundation International Fellowship Program
- American Association of University Women International Fellowships
Corporate sponsorship: your employer pays for your MBA
Prospective MBA students already working in the business world may also be able to persuade their employer to finance part or all of their MBA program. Bigger companies will sometimes have assistance programs for their employees who seek to broaden their knowledge and skills, including many of the large consulting firms as well as some banks and consumer goods companies. Even companies that do not have established programs may offer support. The key to securing corporate sponsorship is demonstrating how the MBA will benefit the employer.
In return for sponsorship, the employer usually requires the candidate to commit to staying at their firm for a set number of years after they have finished the MBA, or agree to pay some or all of the fees back. Before agreeing to such an arrangement, have a think about whether a binding employment contract fits with your long-term career objectives and personal ambitions.
MBA loans for financing your degree
Even after securing some assistance through scholarships, grants, and employer sponsorship, many MBA students will still find it necessary to take out a loan to finance part of their studies and living expenses. There are several banks, private institutions, and online lenders that offer student loans. These include Prodigy Finance, Future Finance and Lendwise, which specialize in educational loans.
It is important to note that the terms, conditions, and rates that apply to these loans will vary. Some loans, such as Stafford Loans in the United States or Career Development Loans in the United Kingdom, can be subsidized by the government if the applicant can demonstrate financial need, for example. Other options include Chase Student Loans,
Sallie Mae Student Loans and National Education loans.
Using personal savings to pay for an MBA
Because MBA students will have amassed at least a few years of professional work experience, many have had the opportunity to build up savings before applying to business school. It is rare they would have enough stashed away to cover the full cost of the MBA, but it is common for students to combine savings with loans, scholarships and other funding sources to cover the tuition fees and living expenses. In addition, some students may find financial support from family and friends.
Photo: 401(K) 2012 / Creative Commons (cropped and rotated)