MBAs Can Cost More Than $50,000 a Year
While earning an MBA can advance your career path and future earnings, few people can shoulder the upfront cost. Tuition among the top b-schools can soar above $100,000 for the entire program.
Even attending a public business school can be costly. For instance, a few public b-schools charge more $50,000 a year for both in- and out-of-state tuition, according to 2016-2017 tuition data reported to U.S. News in an annual survey.
For prospective MBA students, here are 10 areas to explore to help pay for an advanced business degree.
1. B-School Fellowships
A few business schools offer generous fellowship awards. These awards are similar to scholarships, since this is grant money that doesn’t need to be repaid.
Harvard Business School, for example, offers need-based fellowships to nearly 50 percent of each class. According to the school’s website, the average HBS fellowship is around $37,000 a year — or $74,000 in total.
2. Graduate Scholarships
“Most schools, including Bentley, offer a number of merit MBA scholarships that don’t involve a work component,” says Gordon Berridge, associate director of admissions at the McCallum Graduate School of Business at Bentley University in Massachusetts.
Berridge says graduate scholarships are based on previous educational achievements, GMAT or GRE scores and also what the student is likely to contribute to the incoming class.
3. Graduate Assistantships
Working as a graduate assistant while enrolled in an MBA program is another way to pay for business school. These assistants typically work alongside faculty or administrators in either research roles or in educational or administrative activities.
“These positions are generally only offered to full-time graduate students with limited work experience and are awarded for merit,” says Berridge of these assistantships at McCallum.
4. Industry Scholarships
Business school experts say when MBA students are looking at external scholarships, they should consider exploring niche awards.
“If you’re interested in taxation, research what types of scholarship are available for people looking to pursue a taxation degree,” Berridge says.
5. Employer Sponsorship
Some companies offer sponsorship to help employees earn an MBA, but expert says this usually involves some type of contract or obligation, such as returning to the company upon degree completion. Around 8 percent of prospective MBA students plan to use either employer reimbursement or sponsorship to pay for b-school, according to a 2016 survey by the Graduate Management Admission Council, which administers the GMAT.
Other forms of employer sponsorship include tuition reimbursement with a maximum allowable amount per year. “Read your employee handbook or talk to human resources to find out if your company has a standard tuition assistance or sponsorship program in place,” says Dennis Yim, director of academics at Kaplan Test Prep.
6. Federal Student Loans
At least two federal student loan options are available each academic year for U.S. students: the Stafford loan and the Grad PLUS loan. The Stafford is limited to $20,500 for a year, while the Grad PLUS is available for the school’s cost of attendance.
Typically, the interest on these loans are higher than the rates offered to undergraduates. Currently, the loan interest rate for a graduate Stafford is 6 percent and 7 percent for Grad PLUS. To apply for these loans, students must complete the Free Application for Federal Student Aid.
7. Private Student Loans
Private lenders can provide customized options, such as loans at a variable or fixed rate.
Oftentimes these loans are at rates even lower than the federal government. For instance, Citizens Bank and CommonBond, to name a couple, offer specialized MBA loans at lower interest rates compared with Grad PLUS.
8. Retirement Savings
According to IRS guidelines, those who make an early withdrawal from a retirement account, such as an IRA Roth or 401(k) account, are exempt from the 10-percent penalty so long as the funds are put toward a qualified higher education expense. Attending a business school qualifies for this exemption.
But account holders who make an early withdrawal will still face income tax on these funds.
529 College Savings Funds
While tax-advantaged 529 accounts are typically thought of as a popular way to pay for college, you can use these funds for grad school.
A family, for example, can decide against tapping these funds for undergraduate expenses and save the money to cover an advanced degree.
10. Special Government Grants
A few programs exist at the government level that help students pay for an advanced business degree overseas, such as the Fulbright Business Grant.
One of the awards under Fulbright for business grad students provides funding to recipients to study a one-year MBA program in Spain.
Learn More About Applying for an MBA
See the complete 2018 Best Business Schools rankings, and check out our MBA admissions blog to find advice on applying to business schools.
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10 Ways to Find Money to Pay for an MBA originally appeared on usnews.com
