Most students who want to get an MBA wonder how they’re going to pay for it. While the return on investment is attractive, the thought of managing the actual payment, and yes, the accrued debt, can be intimidating.
But if planned with the business savvy that most MBA students should possess, some of that debt sting can be softened. And debt isn’t the only option. Scholarships, employer assistance, part-time jobs, and teaching assistantships are among the resources that can help make the cost of an MBA more palatable.
“After you’ve been accepted to a graduate MBA program, you need to investigate your financing options as soon as possible,” says Gordon Berridge, associate director of graduate admission at Bentley University. “That’s especially true if you’re going to start school within the next couple of months. But even if there’s a longer lead time, you want to make sure that you know where the money is going to come from so that your plans don’t get derailed.”
Here are five resources to investigate:
- Loans, public and private.
The federal government offers two loan programs in particular that are often used to help finance graduate study. The Stafford loan is “unsubsidized” and is limited to $20,500 a year. The Plus loan can cover the entire cost of attendance, minus any other financial aid you might receive.There are a variety of private loan programs, many developed by banks in cooperation with colleges and universities. Sometimes these programs have stipulations such as residency requirements. Often they have options that include variable rates based on whether you’re still in school or have graduated. You can also negotiate whether you want an interest-only or deferred payment program. Needless to say, interest rates vary in accordance with the particulars of the loan repayment schedule you choose.
- Merit-based aid programs
Most schools offer at least some merit-based scholarships. Selection criteria can be varied, ranging from test scores and grades to demonstrated expertise to specified interest in an area that is funded by individual or corporate donors. One example is Bentley’s Leadership Scholar Program. Operated in conjunction with a variety of partner organizations, it recognizes academic achievement along with a demonstrated commitment to leadership and social responsibility.
- Graduate and teaching assistantships, tuition remission, and other institutional options.
At Bentley, for example, full-time graduate students are eligible to compete for graduate assistantships that feature partial to full tuition remission. Serving in these positions, graduate assistants help faculty and administrators in a variety of research, educational and administrative activities.
Another way to take advantage of institutional largess is to get a job that meets the criteria for tuition remission simply as an employee benefit. Some schools may offer the benefit not only for its own programs but for others offered in a consortium to which the institution belongs.
- Employment
As much as a full-time study can also be a full-time job and more, don’t rule out part-time employment, either (as noted) at the university you’re enrolled in or with a private employer. Many graduate programs have connections to companies and agencies that want to hire graduate students for part-time work and are sensitive to the need for flexibility and the complexities of student life.
- Savings
If you’ve managed to sock away a little nest egg or a rainy day fund, this may be the perfect opportunity to put it to good use. And that thought extends to any funds that your parents and spouse may want to direct your way. After all, you’re worth it!
Also, you may want to consider tapping retirement savings, although you obviously need to be very careful. When you use the money for graduate business school, you don’t have to pay the 10 percent penalty for early withdrawal, although you do have to pay the normal income tax (because the money was initially tax deferred). The silver lining is that, as a struggling graduate student, you’re probably going to be in a very low income tax bracket anyway.
What legions of graduate students have discovered is that where there’s a will, there’s a way. The type of program in which you enroll, the cost per credit hour and the number of credit hours you need to accumulate to graduate, along with the pace at which you accumulate them, can all have a big impact on how much you pay and over what length of time. On the revenue side, available options like those above can help make your MBA not only affordable but an extremely wise investment, given its impact on your future career.