There are three major questions for any MBA prospective student:

1.       How to get in?
2.       How to get out?
3.       How to pay for it all?

Getting into a program of your choice is only the beginning because completing the program, within your desired time frame, is the ultimate goal.  How about the third question – how to pay for it all?

If you’re not independently wealthy or your company doesn’t pay for your higher education, you have to think creatively on how you’re going to invest in your MBA education. Here are four ways to prepare, pay for, and/or payback your MBA education:

-save money;
-earn grant funds;
-take out loans; and/or
-use current wages

Saving money is a very effective way to fund your MBA education. Just take a look at the indebtedness of students (hyerplink - http://grad-schools.usnews.rankingsandreviews.com/best-graduate-schools/top-business-schools/debt) and you will soon realize that many graduates from top programs are in debt over $50,000. Saving money takes planning. Since most MBA candidates work for at least three years first, there’s a golden opportunity to save at least 10% of your earnings for an MBA program. There are very few reasons why you couldn’t save at least $10,000 for the first year of an MBA program.

Earning grant money requires a solid to exceptional transcript. The grades you earned in college can be a big plus for your MBA scholarship consideration. If you’re already out of school and aren’t satisfied with your performance in college, don’t fret. There are still ways to earn grant money. Since each school is different in their grant considerations, you should inquire within.

Taking out loans is the most common way to fund an MBA education. In order to qualify for federal loans, a FAFSA form needs to be filled out. Private loans should be avoided or used as a last resort. Always read the fine print to a loan and understand how it works before signing it. My advice with loans is to not take the money until you absolutely need it.

MBA students can opt to attend their program part-time, and thus, continue to earn a living. This is an attractive option financially because you can use your current wages to fund your education. However, you must also consider the lost financial opportunity and time if you were to quit your job, finish your program in half the amount of time, or earn more upon completion.

Funding your MBA takes time, commitment, and hard work. Consider all of your financial options and respond accordingly. Remember, it’s your money and time and there’s no greater investment you can make for yourself than continuing your education.

Liam Dunfey, M.A.
MBA Admission Consultant

I have been asked by MBA 365 to shed some light on several topics: MBA tuition financing and who should apply to international MBA programs.

MBA Tuition Financing

Unfortunately I can’t generalize for all European business schools but it appears that most schools offer financing alternatives. What I can tell you about ESADE is:

“ESADE offers MBA Student Loan Agreements for all nationalities through exclusive arrangements with large Spanish banks to specifically meet your needs. The majority of MBA candidates finance their tuition fees through student loans from lending institutions around the globe. Spanish banking institutions show their commitment to ESADE Business School by providing optimal lending terms to all ESADE MBA candidates (regardless of nationality). Our partner banks cover up to 100% of the tuition fees.”

My US classmates who have gone through La Caixa bank to obtain their loan have told me that the process was very simple and seemingly only required a signature. The ease of the process and the fact that the loan is denominated in Euros instead of US dollars, thereby eliminating the currency conversion factor, has led the majority of my US classmates to choose financing arrangements through the Spanish banks.

International Programs

My decision to attend a European MBA program was primarily driven by the pursuit of post MBA employment in Western Europe. I saw the large European alumni network and the proximity of the school to major European cities as a major advantage. What I realized upon arriving at ESADE is that international programs don’t just facilitate employment in a given location; it provides you the unique experience of being in an international community of students. When ESADE states that 47 countries are represented from the student body it is not a statistic liberally adjusted through creative ways of assigning student body countries of origin, but an accurate representation of people’s nationalities.

Yet, aside from all the soft intangible, we are here to find jobs after the MBA and to be quite frank, those wanting US based jobs will be better off attending an American MBA. The alumni network will be stronger in the US and access to recruiters will be better. That is not to say it isn’t possible to obtain a job in the United States from a European business school. I and several others have been able to obtain summer internships in the US but I feel that if you are set on living and working in the US, it would be more advantageous for your career development to attend a US MBA program with an extensive US based alumni network and corporate recruiter relationships.

Bryan,

ESADE Class of 2011

A Business Week Article recently discussed the increasing costs of funding an MBA degree and ideas on how to help pay for tuition and other expenses. It was an interesting article and focused on how students need to be cost conscious regarding any decisions they make while attending school. Keeping a close tab on your budget and what your expenses might be before even attending school is something that MBA students should be doing from the start. Most students just assume that once they finish up school, they will immediately obtain a high paying job, in which they can pay off their student loans overnight. While I agree that most students achieving an MBA degree have a better chance of finding a higher paying job upon graduation, in this economy nothing can be considered a sure thing.

The article also noted that students should be aware of any of the scholarships and financial aid programs that each MBA Program is offering. The author recommends “keeping financial aid folders for each of the schools to which you applied”, which we would also consider to be a very important step in your application process. Many of today’s MBA programs offer considerable amounts of financial aid and students would be amiss to not take advantage of the services that many of these schools offer.

Another important step noted is to keep a close eye on your expenses while both applying and attending business school. As previously noted, students should not make the assumption that some high six figure salary job will fall in their lap following graduation. Expect the worse and the better off you will be. So, as the article notes, it’s probably best to “Bring a brown bag lunch, nix your Starbucks habit, or quit hanging around the mall on sale day”.

Something that many students often overlook while trying to decide between business schools are the in-state costs and hidden expenses. While tuition costs are the biggest expense incurred, things such as “traveling for the job search, purchasing business attire, and attending networking events” are all expenses that can truly add up. Compare the various schools you are considering, making these “hidden” expenses a part of your overall budget, and you’ll be ahead of the game.

Lastly, the article speaks to determining how much money it is that you will have to borrow. After exhausting any potential scholarship/grant money (it is noted that it is tougher for MBA’s to get scholarships), look to what loans are available. The article recommends notes various options of aid for students one of which is a federal loan which is provided at fixed interest rates. “Graduate business students can take out up to $8,500 in subsidized Stafford loans, which are based on need, do not accrue interest on the loan while your are in school, and come with a fixed interest rate”.

Funding your MBA is certainly a challenging proposition and we would recommend that students certainly look into all of the options (including aid, scholarship and grants) available at each particular school they are considering. Cutting back on expenses before and while attending business school while also tempering salary expectations upon graduation are steps that every potential MBA student should consider.