5 ways to pay for your MBA

Pursuing an MBA is no small feat or investment. Congrats! The excitement around advancing your career and envisioning the enormous potential for the future will have you feeling like you’re on top of the world. The discussion about ways to pay for your MBA does not need to be the complete opposite. Do not stress, just keep reading to avoid losing those feel-good vibes. We are here to help you figure it out.

Scholarships & Fellowships

Scholarships – we love free money. Ideally, you could apply for and secure enough scholarships to barely feel the MBA dent in your wallet. But where do you even find them? Some are school-specific, some are country-specific, and some are for everyone to apply to and hopefully win. Let’s break them down:

• Need-based scholarships & fellowships are offered at many business schools (these may be scholarships or fellowships, and you might need to apply separately); for example Harvard Business School has the HBS Fellowship which will not cover the full cost of your program (they view financial aid as a “shared investment in your future—and a shared responsibility”) but offer varying amounts to roughly 50% of their students. The Fellowships are typically funded by HBS alumni and amounts are calculated by looking at assets you own, your income from the last three years, and if you’re married/have children, they’ll consider your higher cost of living as well as any income your spouse/partner brings in.
• Merit-based scholarships are competitive and will vary in amounts offered but your GMAT will play a big role in eligibility (as will your GPA and experience). GMAT score ranges that’ll help you get a scholarship vary by program, but it’s safe to say that a score in the high-600s or anywhere in the 700s will help you secure some MBA funding (emphasis on the “vary by program” part – do not let a “lower” score discourage you from applying anywhere. Many of our MBAchic members themselves can attest to that. Do not hold yourself back.). There are merit scholarships purely for academic performance, some for special interests (career paths, industries), some for demographics (female students, students of color, LGBTQ students), and more.
• Outside scholarships & fellowships – many organizations will receive GMAT scores from GMAC (Graduate Management Admissions Council) and others will require you to submit proof of your academic performance. There are tons of scholarships offering different ways to pay for your MBA (check out our Scholarships bank); they can be country-specific, company specific, completely open to all, definitely spend time researching and finding these gems.

Student Loans & Payment Plans

Student Loans. Don’t we love it. Ok, if you cringed. I completely understand. Especially if you’ve still got students loans from undergrad, this is going to be something you take time to think through. There are options to consider, and you can get creative using this as one of the ways to pay for your MBA:

• Federal Student Loans are enticing because they offer income-driven repayment, and depending on the field you enter, you might be able to take advantage of loan forgiveness. They’re reliable, and sort of the standard. Personally, I took out a small federal loan at the start of my MBA and wound up paying it back less than a year after graduation. It was a pretty simple, no-frills borrowing experience.
• Private student loans are tricky, in that I find conflicting advice all the time. Some will tell you to max out your federal loans first, then go private, and others will recommend private loans for the low rates and support they offer. There are some perks associated with private lenders, including career coaching, referral bonuses and charitable work. Our 1,000 IG Giveaway sponsor CommonBond offers MBA borrowing rates lower than the government, all while supporting students in need with Pencils of Promise. We also recently learned about Prodigy Finance, which is geared toward international students pursuing their degrees. I’d definitely recommend to shop for private loans on price/rates first, and then check out the perks and support they offer.
• Payment plans, if you’re a part-time student, might make a lot of sense, too. Some schools will let you pay part of tuition before classes begin, and then pay the rest at some later point(s) during the semester. If your company has only partially-sponsored your education, and the rest is coming out of pocket, or whatever your situation is, sometimes an interest-free extension is all you need to make it happen. Find out what your school offers in terms of flexible payment options.

Bonus ideas that came up while working on this post, that are meant to help provide student loan relief / more ways to pay for your MBA:

• Student Loan Assistance from employers – there are plenty of companies who are starting to do this, and even if this wasn’t offered when you started your current job, you should find out if it’s a new offering. Companies realize some of us are torn between paying our loans or putting cash away for this idea of “retirement” we keep hearing about… and they’re trying to help us out. This can come in the form of a monthly contribution (Sotheby’s offers $150 a month to students paying loans back – parents borrowing money for your school are also included in that.). This can also come in the form of a 401k matching – if you’re contributing 2% of your income to student loans, Abbott will provide you with a 5% match to your 401k). There’s a partial list of employers offering assistance linked here (same article as the first sentence).
• The State of New Jersey considered a lottery for student borrowers, which is probably one of the most creative ways to pay for your MBA… (please do not rely on a lottery to fund your studies)
• Relocation to states offering relief – The state of Maine is providing student debt relief to graduates who live and work in the State, by subtracting their student loan payments from their tax liability.

Tuition Reimbursement / Company Sponsorship

It’s not uncommon in consulting or financial services; if you can make a case to your employer that you and your company both would benefit from you pursuing your MBA, go for it! It’s certainly happening in other sectors like technology, consumer goods and energy, too. Take a look around your company – do middle-managers and senior management hold an MBA or Masters-level degree? Does your company tend to invest in employees for training and other educational programs that would suggest they’ve got the funding in their budget? If so, it’s worth a shot.

Try to build a case for them to pay for your schooling (put together a real proposal), or to sponsor you in some way. For full-time MBAs, sponsorship might mean paying for your schooling and holding your job with the stipulation that you go back and remain with them for a certain number of years (or else you might be risking some clawbacks). For part-timers that might be paying for some or all of school and providing some kind of work flexibility if you need to attend evening classes and travel for them, and for executive MBAs, that might even mean sponsoring you to take Fridays off for travel or for classes, while funding your MBA studies. Offerings will vary by school and by employer, and I’d definitely speak to a trusted friend at your company who has been in your shoes (or someone on MBAchic who has been there) to find out more about how they made it happen.

Update! Read Valerie’s guest post on Employee Sponsorship here and stay tuned for more points of view.

Loan Forgiveness

If you’re heading into Public Service after graduation, you might qualify for the Public Service Loan Forgiveness Program, which will help you after you’ve made 120 qualifying monthly payments on your student loans. Basically, if you’ve been consistently paying off your loans for ten years while working in public service, they will help forgive loans. What’s interesting is that the payments don’t need to be consecutive (so if you hop into private sector for a couple of years, and then back to a role at qualifying employer, you don’t have to start back at zero).

This doesn’t just mean heading into a government job, public service seems to be a broad term, in that as long as you’re working for a public service employer, you could quality. We haven’t yet spoken to anyone who has done this, but you could serve as a director of a non-profit, a senior manager in a non-profit hospital or medical group, or even work in higher education in your field of study. Because I can’t speak from experience here, I’m including the Federal Student Aid website here, so you can dig into this yourself. If you’ve done this, would love to hear more from you.

Savings & Your Own Network

Good old-fashioned savings. You could ask why this is even listed as one of the ways to fund your MBA (because it’s… obvious?), but in reading up on this, and speaking with you, we’ve seen a few good ideas and wanted to share.

Sometimes, the scholarships, fellowships, whatever sort of assistance you find out there… it’s not going to cover everything. Then the decision to pursue an MBA becomes a personal one. Is this the right move for you, based on your academic and professional goals, and your earning potential for the future? It’s obviously something you’re not going to take lightly, but there are some other options to consider.

Some of you shared how you funded your MBA while completing MBAchic BSchool Profiles for your programs (please consider responding to our questionnaire here if you’re currently pursuing an MBA or recently graduated). It was great to see the variety of responses which included: scholarships and grants, personal savings, small loan from parents, parents offering to cover it, employer sponsoring the degree (some also said as a university employee, the degree was free), selling major assets to assist in funding, and more.

Also, don’t underestimate the power of a side hustle; if you can make it work, and help cover your COA (cost of attendance), why not? We are also hearing more about pre-MBA internships, which aren’t as long as formal 8- or 12-week summer internships, but allow you to try out a new industry while making a couple of extra bucks. Would love to chat with someone who has done that and how that impacted your recruiting season / post-MBA job prospects.

How did you fund your MBA? Are you thinking about going to business school? What else is missing from this list? If you’ve got more to add, we’d love to share with the rest of our community.