If you’re applying to MBA programs, it’s probably not a surprise that it is a major financial commitment.
Not only will you forgo two years of potential earnings, but you’ll also have to pay for accommodations, supplies and tuition. On average, this means giving up approximately $200,000 in earnings while paying about the same amount for tuition and other school expenses. It’s a big investment, but also one that can pay off in a big way—many graduates double or more their pre-MBA salary after graduation.
So how can you make your MBA more affordable? Here are some tips from MPOWER Financing, a team of former international students working to remove barriers to higher education in the US.
1. Save Now
The surest way to soften the financial blow of an MBA is to start saving while you’re still working. MBA students often leave well-paid jobs to go back to school, but that doesn’t mean all prospective MBA students have a large savings cushion available to pay for business school. As soon as you decide to get an MBA, start cutting your expenses and putting away money for school. There’s an added benefit to this strategy—it will ease the transition from well-paid professional back to a student lifestyle, which can be a shock for some MBA students.
2. Research Scholarships
Investigating scholarship funding is another thing you should do well before you even apply for MBA programs. Some scholarship deadlines are even earlier than admissions application deadlines, so the earlier you start looking for scholarships the more likely you are to be successful. Many business schools have a section on their website that lists outside scholarships, but do your own research as well to find the most potential scholarship options. Look for scholarships that are a particularly good fit—many scholarships are targeted specifically to women, to people with specific work experience or to people from certain places.
3. Look for Country-Specific Financing
If you’re an international student, make sure to look for both loans and scholarships that are specifically targeted to people from your home country. Some examples of financing that are country-specific:
- Loans or scholarships offered by your government for students getting an MBA abroad;
- Programs like the Fulbright Scholarship offered by the US government to encourage international students to study in the United States;
- Scholarship programs offered by schools that are available to people from specific countries;
- US-based lenders that specifically work with international students.
4. Choose Loans Carefully
Even if you take advantage of personal savings and scholarships, you’ll likely need to consider loans to finance your MBA. When you’re looking into loan options, it’s important to understand the terms each lender offers. Here’s a short list of factors to consider:
- The interest rate, and whether the interest rate is fixed or variable;
- Origination fees;
- The length of the loan term;
- The approximate monthly payment once the loans are in repayment;
- Deferment or forgiveness options for periods of unemployment and/or for public service.
You should also realize that the lender with the best terms in your first year of business school might not have the best terms for your second year. So plan on repeating the loan application process in your second year of business school… if you find another loan that is a better deal, it could save you a lot of money in the long run.
Finding a way to pay for your MBA is essential to getting the education you need to advance your career. Most students end up using a combination of savings, loans and scholarships to finance their MBA. Making the most of scholarship opportunities and ensuring that you understand the loan terms sets you up for success not just during your MBA, but in your life as a businessperson.
MPOWER Financing is a US-based student lender with a mission to enable high-promise global citizens further their academic and financial aspirations.