How to Pay for Business School

Pursuing an MBA degree can be an excellent investment in your future career, but like any investment, it can be pricey. An average Master of Business Administration program may cost a few dozen thousand dollars annually just for the tuition, which is not an affordable option for many.

However, you do not need to pay for your studies right away, and there are ways to lower that price. If you know how to finance an MBA properly, you can save quite a lot and potentially even go with a more prestigious school. In this guide, we will explore all the most viable ways graduate students can reduce the cost of business school, from scholarships to employer sponsorships and beyond.

How do People Afford an MBA?

Many students (especially the younger ones) wonder how to afford an MBA and afford it. The issue is especially relevant in the USA now due to the evergrowing cost of living and tuition. Paying for an MBA in the US involves a combination of strategies and various approaches. Typically, new students rely on financial assistance and loans, but alternative approaches can also help reduce the final budget. For instance, you can apply for a part-time job (which can also give you necessary employment experience), introduce lifestyle changes, or create other funding options.

Assessing the Cost of an MBA

Before exploring all the available financing options, assess the overall cost of the MBA program you choose. Costs may vary depending on the program itself, your lifestyle preferences, and the school’s location, but the major factors remain similar.

Overview of MBA costs (tuition, fees, living expenses, etc.).

The average cost of attendance for an MBA student can vary greatly depending on a number of factors. The estimated range is from $50,000 to over $150,000 per year, and it comprises the following:

• Tuition Fees: Depending on the reputation and the location of your school of choice. On average, it starts with under $15,000 annually for more affordable programs to over $100,000 or even $200,000 for elite universities.

• Program Fees: Technology, administrative fees, library passes, and others can range from $500 to $2,000 yearly.

• Living Expenses: Depending on the location of your school, you can expect different living prices during your pursuit. Urban centers like New York come at around $20,000-$40,000 annually, while suburban areas average $10,000 to $25,000. This includes housing itself, utilities, food, etc.

• Personal Expenses: Clothing, entertainment, commute, and others can come at $5,000-$15,000 annually, depending on your conditions and spending habits.

• Cost of Books and Course Materials: Many universities require you to buy course materials that can come at $1,000-$3,000 yearly for printed ones or $500-$1,500 for digital ones.

• Health Insurance: $1,500-$3,500 annually for domestic students or $2,000-$5,000 for international ones.

• Pre-Program Expenses: Based on whether you are a US citizen or a foreigner, you should expect $1,000 to $5,000 just to get to the location and move into your new housing.

Differences in costs by program type (full-time, part-time, executive, online).

Based on the type of the program, it can come at different costs. Here are the main formats and their approximate costs:

Part-Time, Online, or Mid-Tier Programs: $50,000 - $80,000 per year

Top Programs, Moderate Lifestyle: $80,000 - $120,000 per year

Top Programs, Expensive Cities, Extracurricular Expenses: $120,000 - $150,000+ per year

Note down that lower price usually comes with a reason. While lower-tier schools still offer excellent return on investment, their certificates may have lower value in the job market. In addition to that, living in more rural regions is less susceptible to network building, which is a foundational element of any MBA pursuit.

Scholarships and Grants

MBA scholarships and grants are arguably the most desired and advantageous financing format. They do not require repayment and may help pay for your MBA. If you are a competitive student with strong academic performance, you can expect a fellowship opportunity or a merit-based scholarship from the school. Universities like Harvard also offer  scholarship programs based on student’s financial needs. International students should also explore specialized aid as they may not be eligible for every format of financing an MBA.

Employer Sponsorship

In some cases, employers can contribute to financing your MBA pursuit. Based on their approach, they may offer tuition reimbursement or, sometimes, direct funding. Typically, they count on students staying with the company post-graduation; this is one of the most reliable ways of sourcing promising and loyal talents.

Student Loans

In the US, loans to students remain one of the most common ways of financing an MBA and any other educational pursuit. These are the options you can consider:

Prodigy Finance - great option for financing almost any graduate degree at any university for applicants from any country. While their funding varies by university and applicant profile, they offer up to 100% of funding for Tuition and Living expenses. Prodigy has flexible qualification options and their application is free - you can sign up to estimate your payment. $500 Cash Back:  If you sign up through GMAT Club’s link or use Code RPC0DFAF, GMAT Club will provide you with up to a $500 Cash Back when your loan is disbursed. Learn more here about the Prodigy Cashback. 

Juno - offers low interest rates for US-based MBA programs to applicants with credit history in the US or US-based co-signers.  

$250 Juno Offer: Sign up for a Juno student loan using https://joinjuno.com/p/gmat-club and get GMAT Club’s upcoming MBA HeadStart program (a $250 value) FREE! To redeem, email [email protected] for activation and availability details.

Do your research on the options that are available to you and try to pick the most advantageous one. Which loan format comes with the lowest interest rate? Do you need a good credit history to qualify? Are there any alternatives you can pick?

Personal Savings and Investments

Another way to minimize student loan debt and reduce the need for loans is using your personal savings. Students with a college fund or strategic investments can leverage those to offset some of the educational expenses. This money can be used for financing your MBA tuition, living expenses, or any related costs.

Side Jobs and Freelance Work

MBA curriculums are usually conducive to doing part-time or side work. Many students do freelance, consulting, tutoring, or campus jobs to help cover personal savings. While it may not seem significant at the beginning, these may help cut the cost of studying significantly in the long run. Moreover, this is a great way to gain professional experience that can add to your resume and make you even more desirable. 

Crowdfunding and Alumni Networks

Platforms for crowdfunding can be an innovative method to enlist the help of loved ones, friends, and supporters. Alumni networks may also provide guidance on how to pay for MBA or funding opportunities. Speaking with alumni can reveal information about alternate financing sources.

FAQ

How do most people finance their MBAs at top schools?

Most students at top MBA colleges use a combination of student loans, scholarships, personal savings, and employer sponsorship to finance their education. Federal loans and private loans are especially common due to the high cost of tuition and living expenses.

What is the average cost of an MBA at a top school?

If you want to get an MBA at a top school, its cost can range from $100,000 to $200,000, including tuition fees and living expenses. This varies based on the degree program type and location.

Can I work while pursuing an MBA?

Yes, many students in online or part-time MBA programs work while studying. Some full-time MBA programs also offer flexible schedules or internships to accommodate working students.