Financing an MBA
If you’ve decided an MBA is the best option to further your career, it’s time to get smart about paying for it. A two-year MBA program at the most prestigious schools can cost $100,000 or more for tuition, books, and living expenses. This doesn’t even include the cost of lost wages. Even schools with less name recognition are going to cost you tens of thousands of dollars.
Fortunately, there is plenty of financing help available for MBA candidates. Knowing your options is the first step to researching in-depth solutions for financing your MBA ambitions.
How to Finance an MBA- Using Student Loans
No one enjoys the prospect of going into debt, but there are few better reasons to do so than enhancing your earning power with education credentials. Federal loans are typically managed by B-schools and only require you to fill out a FAFSA. These loans carry a fixed interest rate, and repayment is made as painless as possible. Paying interest while still in school is generally a good way to keep costs down and federal loans also extend a grace period and the opportunity for income-based repayment should you hit a bad patch.
Private loans take more effort to manage, but they can be better in the long run. Your credit history will be most important here. Repayment is not as flexible, and interest rates can be variable. Variable interest is definitely a bonus in a bad economy.
Finance an MBA with Scholarships and Fellowships
If it’s time for you to get an MBA, you should not hinge moving forward on the limited number of highly competitive fellowships. But it is still a good idea to apply for all options that are available. Paying for education with scholarships and fellowships looks great on the resume. It shows a potential employer you have the confidence in yourself to put in extra work without a definite reward.
Enlisting a Corporate Sponsor to Finance Your MBA
Since a higher education makes you more valuable to your employer, some employers have funding mechanisms in place in their Benefits program to help employees finance an MBA. Although, not all employers will pay for tuition, those who do, will certainly have a set of stipulations for you to qualify for the MBA financial assistance. These requirements often include agreeing to work at the company for a set number of years, repaying a portion of the funds, finishing the degree in a specified time, and/or continuing to work a set number of hours during the school year. Carefully weigh your options unless you are absolutely sure you want to remain with the company for several years after graduation.
A current company is not the only resource. Some companies may be willing to help settle your MBA debts retroactively. To find them, check with the prospective schools, begin asking about their in-house corporate recruiters. Contact these recruiters to find out which companies provide educational benefits for new hires.
Using Personal Savings for Your MBA
Tapping into a retirement account is always a bad idea, but other savings accounts were created with the idea of being able to handle major expenses. Paying for an MBA is definitely a worthwhile reason to cash out some savings or investments. Your increased earnings after graduation will make it possible to add savings back at a greater rate.
Financing an MBA can seem daunting at first. The overall price is likely more than two years of your salary. Research these options thoroughly before deciding on a specific program.
About the Author:
Chad Thatcher writes for several higher ed blogs. To read more about MBA degrees and financing options click here.
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