{"id":36564,"date":"2017-03-24T06:55:16","date_gmt":"2017-03-24T13:55:16","guid":{"rendered":"https:\/\/gmatclub.com\/blog\/2017\/03\/top-tips-for-financing-your-mba\/"},"modified":"2017-03-24T06:55:16","modified_gmt":"2017-03-24T13:55:16","slug":"top-tips-for-financing-your-mba","status":"publish","type":"post","link":"https:\/\/gmatclub.com\/blog\/top-tips-for-financing-your-mba\/","title":{"rendered":"Top Tips for Financing Your MBA"},"content":{"rendered":"

Before you apply for an MBA is the best time to begin planning your financing. After all, you\u2019re opting to forego your annual salary just as you\u2019re committing to one of the biggest financial investments of your life. The FT recently reported<\/a> that the average Stanford GSB student will spend about $218,000 over two years while giving up an estimated $200,000 in compensation. As for other top tier programs in the US, annual fees for tuition and living expenses exceed more than $100,000. But the FT also cites that, on average, MBAs studying among the world\u2019s top b-schools expect to double their pre-MBA salary within three years.<\/p>\n

If one of your key considerations is cost, you can find a vast array of financing options to fund your program. But step back to understand your options and set a strategy before you dive into the details. How to best finance your MBA is tied to your particular circumstances and profile\u2014your nationality, personal resources, credit history and chosen program are all elements that can impact your approach. At Fortuna Admissions<\/a>, we\u2018re experienced at navigating financing options and advising candidates on scholarship applications. Having personally led INSEAD\u2019s Admissions & Financial Aid office, I\u2019m offer some guidance to help you get started:<\/p>\n

Define a savings strategy.
\n<\/strong>It\u2019s never too soon to save for your MBA. In fact, you should start as soon as you decide to apply. While need-based aid does exist\u2014HBS reports that 50 percent of its MBA students qualify for need-based support\u2014in reality it can be difficult to obtain without genuine financial hardship. (Blowing your savings on a big wedding doesn\u2019t count.)<\/p>\n

So get serious now about adjusting down your expenditures; now is a good time to reel in your Starbucks habit. If you\u2019re earning a chunky disposable income and accustomed to spending without much thought you\u2019re not alone\u2014especially if you\u2019re a young professional without kids or a mortgage. Take it from me\u2014it can be a shock to reenter a student lifestyle. It\u2019s better to start the budgeting conversation with yourself now.<\/p>\n

Speaking of, get acquainted with the potential costs surrounding your program and project a realistic budget for its duration. Beyond the hefty tuition, your costs will include living expenses, books and materials, extracurriculars and study trips. Because it can be difficult and time-consuming to refinance mid-course, don\u2019t underestimate your potential expenses. And you want to be in a position to make the most of pop-up opportunities, such as career treks and study trips, or travel for interviews.<\/p>\n

Finally, explore your target schools\u2019 financial aid resources. Most programs have useful online info, and if you get in, you\u2019ll likely receive a bevy of options related to loans (public and private), flexible payment terms, scholarships and favored sources of other financing. Programs that accept you actually want you to find the money to go; it is a blow to the admissions office when promising students decline because of lack of financing.<\/p>\n

Find your fit for scholarships.
\n<\/strong>Forty eight percent of two-year MBA students were scholarship recipients, according the FT\u2019s 2017 ranking<\/a> data. While they can be highly competitive, scholarships are often tailored to specific profiles\u2014from personal traits to gender, service and academic or industry distinction.<\/p>\n

It starts with your application\u2014know it can position you to qualify for a merit scholarship, not just MBA admission. All candidates may be automatically considered for merit-based aid, and most schools regularly (if selectively) distribute fellowships. At INSEAD, so-called \u201cspot scholarships\u201d are given to the very best admits, although the bulk of funding is allocated after candidates submit specific aid or scholarship applications. Top tier schools (especially HBS and Stanford GSB) have extremely deep pockets. There\u2019s often no separate paperwork to be eligible for MBA merit scholarships, but it\u2019s advantageous to submit your admissions application in earlier rounds before they\u2019re allocated.<\/p>\n

Other need-based financial aid requires a separate application (so make careful note of deadlines). An impressive array of outside groups offer some level of funding, from clubs and industry associations to ethnic associations and athletic groups. This funding scene is continually evolving, so start your research early and keep yourself informed. New scholarships are announced regularly: This year NYU Stern released its Advancing Women in Business Scholarship<\/a> to increase gender equity, which covers the first year\u2019s tuition, while Fort\u00e9 fellowships<\/a> are awarded to outstanding women applying for various MBA programs. INSEAD recently launched its Mexico Excellence Scholarship<\/a>, driven by its values for diverse cultural viewpoints and \u201copen borders.\u201d<\/p>\n

Occasionally reciprocity is involved\u2014the Boustany Foundation, which offers a two-year award to HBS with priority given to candidates of Lebanese descent<\/a>, expects post-grads to fulfill an unpaid internship at the foundation, while a Stanford GSB fellowship funds MBAs committed to generating economic development in the Midwest<\/a> US for two years minimum. NYU Stern\u2019s new Fertitta Veterans Program levels annual tuition to a flat fee of $30k for US military veterans, while former service members at participating schools may qualify for special funding and fee waivers through the Yellow Ribbon Program. The HBS website maintains a comprehensive and well-chosen sampling of outside funding opportunities<\/a> across a multitude of categories.<\/p>\n

Follow the evolving landscape of loans.
\n<\/strong>Student loans comprise the bulk of education financing. But while scholarships are often borderless, where you live usually determines your loan eligibility . The lowest interest loans for US citizens are often provided by the government (whether you\u2019re studying overseas or domestically). To qualify for US state and federal financial aid, you\u2019ll need to fill out the Free Application for Federal Student Aid (FAFSA).<\/p>\n

Then there are private loans, and some U.S. banks allow international students to borrow if they have a qualified cosigner (usually a creditworthy U.S. citizen). But alternative options are on the rise, many of which offer a non-cosigning option\u2014from innovative investment models to school-based partnerships with credit unions (such as Duke Fuqua and Wharton). Prodigy Finance<\/a>, a financing venture founded by MBA alumni from INSEAD, is challenging the traditional lending industry through a predictive model, which takes potential future income into account (not just your credit history); Prodigy\u2019s non-cosigner loans have directed some $250M to 6,200 students from 118 countries.<\/p>\n

Explore creative tactics.<\/strong>
\nMore than a few enterprising students are turning to Crowdfunding their MBA<\/a> on platforms such as Indiegogo<\/a> or GoFundMe<\/a>, making a powerful pitch to their community about investing in their future potential through helping to fund an MBA degree. It\u2019s a DIY fundraising tactic that may be appealing if you\u2019re someone with marketing and social media savvy.<\/p>\n

On the more practical side of the spectrum: Some countries allow tuition to be deducted from your personal taxes, such as Canada, Germany and France. That said, things in the US are both particular and complex, since any tax deduction must meet narrow legal definitions in terms of an MBA being required by your employer or improving or enhancing the skills necessary to do your job. Fortuna\u2019s Matt Symonds provides more specifics in this Forbes story, Is Your MBA Tax-Deductible?<\/a><\/p>\n

If you\u2019re pursuing a career in the public or nonprofit sectors, loan forgiveness may be a possibility. Yale SOM purportedly has the oldest and most generous Loan Forgiveness Program<\/a> among b-schools, which supports grads who go on to pursue \u201cpublic interest\u201d jobs around the globe.<\/p>\n

Finally, don\u2019t overlook employer sponsorship\u2014some industries, especially consulting, consider MBA education a worthy investment. According to the FT, 9 percent of MBA alumni who graduated from a top 100 program in 2010 received employee sponsorship in some form.<\/p>\n

All told, most students will combine multiple sources of funding to round out their package\u2014integrating loans, personal savings, and, if you\u2019re lucky, a well-appointed scholarship. \u201cThe value of an MBA, like the cost, is about more than the money,\u201d says Fortuna\u2019s Judith Silverman Hodara, former head of Wharton admissions, who cites innumerable benefits such as a school\u2019s alumni network and first-row access to bleeding edge industry insights. \u201cWhile it is mission-critical to get practical about costs, the array of financial assistance that exists means that dollars shouldn\u2019t stand in your way.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Before you apply for an MBA is the best time to begin planning your financing. After all, you\u2019re opting to forego your annual salary just as you\u2019re committing to one…<\/p>\n","protected":false},"author":160,"featured_media":0,"comment_status":"open","ping_status":"1","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,1831,775,243],"tags":[],"class_list":["post-36564","post","type-post","status-publish","format-standard","hentry","category-mba","category-fortuna-admissions","category-admission-consultants","category-blog","entry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts\/36564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/users\/160"}],"replies":[{"embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/comments?post=36564"}],"version-history":[{"count":0,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/posts\/36564\/revisions"}],"wp:attachment":[{"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/media?parent=36564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/categories?post=36564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gmatclub.com\/blog\/wp-json\/wp\/v2\/tags?post=36564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}