Financing an MBA
An MBA is a significant investment, and financing an MBA can be a challenge. To make it a bit easier for you, we have outlined what you need to think of when budgeting for your MBA. We also covered where you can find financial support for funding your MBA.
How to finance an MBA?
As said it is not easy to gather ample funds to do an MBA, especially when you go abroad and additional costs occur. In this article we help you to consider every step along the way of getting your MBA funded properly.
Draw up your budget
Before you start looking for funding, you need to know exactly how much you will need for financing an MBA. There are a few factors to consider when drawing up your budget:
MBA costs: Tuition fee
While the cost of an MBA is more than its tuition fee, the obvious place to start is the tuition fee. Make sure that you are familiar with the most updated tuition fee amount. It is good to look at the school website directly and not rely on secondary sources of information as these can be outdated. It is also important to note how the tuition fee is being presented. Some programs will state the full tuition fee, while others might state fees per semester or per course.
You will find that tuition fees vary greatly between different programs. There is little information available on how the tuition fees are set. Some programs have additional curriculum elements such as personal coaching and additional certification opportunities embedded in the program that might add to the tuition fee. The location of programs could also have an influence as some countries are more expensive than others to run the program. In certain instances, business schools might receive a form of state or government funding that could translate into lower tuition fees. The length of the program might also influence the tuition fee as can the scale of the campus facilities.
MBA costs: Program format
The program format will have an implication on any additional costs you may incur.
These kind of programs might require you to buy certain software and equipment to support your learning. Depending on the structure of the program, you might also need to attend certain modules on campus. Check whether the flights to the campus destination are included in the tuition fee (in most cases they are not) and whether accommodation on campus is for your own expense (this varies between programs).
This kind of MBA requires you to be on campus for the duration of your program. You will, therefore, need to account for relocation costs if you are coming from abroad, and living costs while you are on the program. Most schools have an outline of what the estimated living costs per month will be, taking things such as accommodation, food, and transport into consideration. It is very important to double-check whether the stated average amount would suit your needs.
A good way to do this is to reach out to recent graduates in situations similar to you (i.e. those that came with or without a family to the program or those that came from the same region as you) to get a sense if you will be able to live within the suggested living costs estimate. You can find MBA student ambassadors from around the world on MBAGRADSCHOOLS.com! It is also good to check if there are program expenses outside of the tuition fee (e.g. flight costs to study destinations and travel costs to internship locations).
MBAs like this are mostly offered part-time, so you won’t need to take living costs into account. However, it is still good to check what your potential travel costs to and from campus will be for when you need to attend on-campus modules and, as is the case with other MBAs, whether there are any costs incurred for compulsory parts of the program such as study trips that fall outside of the tuition fee.
MBA costs: Learning materials
Most programs require you to use specific learning materials. These are laptops with certain requirements, software, books, case studies, etc. Sometimes it is included in the tuition fee, sometimes not. You’ll need to check per program if and what you need to buy.
MBA costs: Country-specific requirements
Depending on the country in which your MBA school is based (e.g. Germany), you might incur additional costs such as compulsory health insurance which is sometimes required even if you are doing a part-time MBA.
Financing an MBA
Financing an MBA using your own funds
A good place to start is to look at your own funds to help finance your MBA. Do you have savings that can pay for at least part of your MBA? If you are planning well enough in advance, you could save specifically for your MBA to ensure that you have some personal funds available. While there are a lot of funding options for prospective MBA students, they rarely cover everything you will need. Some students also gather financial support from family and friends to supplement their own funds. This option, of course, depends entirely on your personal situation and whether you are comfortable asking.
Financing an MBA with loans
There are numerous loan options available. Student loans are specifically available to those wishing to pursue (further) studies, often with favorable interest rates. Some loans are specifically aimed at MBA students.
Some loan schemes have a partial loan/scholarship construction. This means that you receive a loan which is turned into a (partial) scholarship as and when you successfully complete your modules. You can also consider a general loan that is offered by financial institutions and open to any eligible applicants to be utilized for any purpose.
All these loan options have specific eligibility criteria, so it’s good to check if and to which ones you can apply. You need to check if you need a co-signer or guarantor and whether you can obtain the required documentation to apply for the loan. The requirements differ per loan option and are often country-specific. The choice you make depends on where you can get the best interest rates from the loans that you are eligible for.
Financing an MBA with a scholarship
There are a wealth (pun intended!) of scholarship options available to help in financing an MBA. Understandably, you might be a bit uncertain if you are eligible, but it is definitely worth exploring all scholarship avenues. Every little bit helps!
Most business schools have their own MBA scholarship options available. Some are needs-based (also called financial aid) and are awarded based on your personal financial situation. You often need to show proof of income and other financial statements as part of your applications. Some are merit-based. This means that the scholarships are awarded if you hold a certain minimum threshold (e.g. GPA score or GMAT score) or if you have achieved something remarkable in your career to date.
What exactly constitutes as “remarkable” is quite subjective and mostly decided by a scholarship committee, but most schools provide scholarship eligibility criteria. It is helpful to note that extracurricular activities (i.e. volunteer work outside of work and/or purposeful activities not related to your work) can also be considered. Some are based on certain demographical criteria. These could be scholarships aimed at female applicants, applicants who are entrepreneurs, applicants working in NGOs or social enterprises, and so forth. Information on the school-specific scholarships is available on school websites, often with contact details of the financial aid or scholarships office for getting further detailed information.
There are also available scholarships that are not linked to the specific programs you are applying to. Some might be based on your nationality with the purpose of enabling students from your region to attend business schools. Others might be in the form of sponsorships from a philanthropic organization or an organization targeting specific populations. You’ll need to check whether these scholarships are linked to specific partner schools, meaning you are only eligible if you apply and get accepted into those schools or whether you can apply to any school and still be eligible.
Financing an MBA by working part-time
If you are considering a part-time MBA, you will most probably be staying in your current job while studying and you could potentially use part of your income to finance your MBA. If you are thinking of a full-time MBA, you could consider part-time work to supplement your funds. In some cases, the business schools themselves offer academic support roles to students or you could look for part-time jobs in the region, also considering potential freelance or project work.
It is important to check if and how many hours of student work is allowed in the country you are studying in.
Financing an MBA through company sponsorship
It is quite common for companies to support or sponsor students on an Executive MBA. Most schools can provide you with information on the percentage of their EMBA students who receive some form of sponsorship as well as tips on how to approach your employer. For full-time MBAs, this option is less relevant. In some cases, employers give students a form of sabbatical (i.e. “releasing” them from work for the duration of their MBA after which they will return to the company). With any form of company sponsorship, there is often a post-MBA time commitment to stay at the sponsoring company attached, so it’s good to check and assess this in the context of your long-term career goals.
Financing an MBA with payment plans
Some schools offer payment plans to support you in financing an MBA. This means that you can pay the program in installments. Depending on the school, this could be on a monthly or quarterly basis. In some cases, you can start paying part of the tuition fee after you graduate and have started working, but this is rare. Depending on the location of your program, if there are any tax-deductible benefits to education, programs might spread payment installments over numerous tax years to allow you to utilize the maximum tax benefit.
How do I get an MBA scholarship?
Automatic grants vs. application-based scholarships
Just as there are hundreds of MBA scholarship options available, there are also hundreds of different application methods associated with them. Some are automatic grants, meaning you cannot apply for the aid option as it is automatically awarded. In most cases, this means that your MBA application will be taken into consideration as your MBA scholarship application. Good to note: with some business schools, you have to indicate if and which scholarships you would like to be considered for on the application form.
Others are application-based scholarships meaning that you need to complete separate applications for the scholarships on offer. These applications sometimes require a scholarship essay and/or supporting documents. Some schools have both automatic and application-based scholarships available, so you need to carefully check per program how to go about this.
MBA scholarship selection process
Every MBA scholarship has a distinct selection process. Some are purely paper-based, in which the MBA application is taken as a reference to scour for aspects (e.g. merit, employment history) related to the scholarships and ranked among other applicants. As mentioned, some require additional essays that are reviewed and ranked among other applicants.
In some cases, you might need to provide, for example, a business plan if you are applying for an entrepreneurship scholarship or a letter of reference from those you have supported in some service activities if you are applying for an NGO scholarship, for example. In rare cases, you’ll need to attend an interview as part of the selection process.
Whether you are pursuing a part-time or a full-time MBA, looking to self-fund, secure a loan, or apply for scholarships (or all of the above!), we hope that you now have a clearer idea of where to start when it comes to financing an MBA. The key is to budget well and ensure that you look carefully at any and every option available to you, including the exact eligibility criteria and application process related to each one.
Written by: Maryke Luijendijk
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