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

It’s a new year and many economists think the recession is waning. If you’re looking ahead and figuring ways to advance your career, the MBA route might be the ticket. It’s never too late to continue your education! There are various types of programs with innovative specializations and accommodating schedules for busy professionals or for those that want to go full-time. Take the time and do the research so that you can make an informed decision. Too many aspiring students think about the limitations (I’m too old, too young, too inexperienced, not good enough grades or scores, etc.) and never think about the possibilities. The economy is down and you may not think you have the time or money, but taking your education one step further can dramatically increase your earning potential over your career. Plus, it can connect you with other movers and shakers in the business world.

The Financial Times reports that many business schools are learning from the mistakes of the current economy and incorporating new ideas into their programs to teach students how to succeed in business for the future. The thinking is that new ideas will help future economic leaders to avoid another economic debacle from happening. Most business leaders want to be a part of a solution, not part of the problem.

The biggest perceived limitations for interested MBA students are time and money. Are you willing to invest 1 to 3 years for your education and earning potential?

There are 1 year MBA programs, night programs, part-time programs, online programs, and full-time programs. All of these are tailored to your needs. Money is an issue for the majority of MBA candidates. You probably have college debt, personal expenses, etc. However, if you look at your education as an investment, you’ll soon realize that it’s more advantageous to borrow the money now, and pay it back as you earn more over your lifetime. If you’re fortunate enough to have the money or to earn a scholarship, then money is less of an issue. Either way, time and money shouldn’t deter you from pursuing an MBA.

The recession will be over soon and the hope is that the next wave of business leaders will have the tools and resources to perform and succeed in a post-recession economy. If you’re thinking about an MBA program, there may be no better time to act than right now.

Liam Dunfey is an educational consultant with over ten years of higher education experience. He takes pride in helping young professionals advance their careers through graduate school.  He co-created University Advisors Admission Specialists, LLC in 2007. He resides in San Diego, CA.   Liam can be reached via email at ldunfey@mba365.com

Accelerated MBA programs, also referred to as One Year MBA Programs, are full-time MBA programs that generally take between 12 to 15 months to complete. The term “accelerated” refers to the fact that students are able to complete these programs faster than a traditional full-time MBA, which typically requires a two year commitment. While accelerated programs are a relatively new phenomenon here in the U.S., most European MBA programs have traditionally followed this format.

Accelerated MBA Programs have steadily gained popularity in the U.S. due to the growing reluctance of applicants to take two years out of the workforce. Tuition costs for accelerated MBA programs – another major consideration for MBA applicants – are often a fraction of the cost of a two year program. Currently, over 90 accredited business schools around the world offer a one-year MBA program with many schools expected to add the option in the future.

The curriculum in Accelerated MBA Programs typically covers the same material as a traditional MBA, albeit at a quicker pace. Some programs require students to have taken some business courses prior to enrolling in the program to ensure that they will be able to keep pace and manage the heavy workload. Most accelerated programs typically do not offer students an opportunity to do an internship.

The information below shows the student profile of people currently enrolled in Accelerated MBA programs, both in the U.S. and abroad:

Source: WSJ Survey

Recruiters and hiring managers typically view the accelerated MBA degree in the same light as a “regular” two year degree, so anyone looking for a quicker – and cheaper – way to give their career a boost should definitely consider this option.

One of the most important considerations for any potential student, but especially for an MBA candidate, is the cost of tuition and living expenses. With university costs skyrocketing and the job market remaining uncertain at best, a decision to go to business school has serious implications. The difficulty of this decision can be magnified even further depending on a candidate’s individual situation. For example, an older candidate may already have a family who relies on their income and might prefer to stay in their current geographic location. Alternatively, someone who is earlier in their career might have significantly more flexibility when it comes to leaving their existing career and choosing which school to attend.

The increased availability of accelerated and One Year MBA programs means that candidates have more choices than ever and the ability to find the specific program that represents the right combination of academics, location, cost, and time commitment. Regardless of your current situation, however, it is important to keep in mind that the true cost (value) of an MBA goes well beyond tuition, books, and supplies. Furthermore, the true cost of an accelerated or one year MBA can be drastically different and, often, much less than a traditional MBA. Therefore, when evaluating your options, it is important to consider the following:

1) Direct costs. This includes items such as tuition, room and board (if separate or different than your current living situation), books, supplies, etc. Traditionally, one year MBA programs cost about 20-40% less than a traditional MBA, although this varies significantly by school. With total costs for traditional MBA programs nearing $150,000, in some cases this difference could translate into $50,000 to $60,000. When you also consider the increased interest (compounding!) that you may incur as a result of taking on a larger student loan, the gap is even larger.

2) Foregone wages. This is a critical component in making your decision and should be considered in much the same way as any direct cost. Many candidates often get so caught up in how expensive tuition is, that they forget to consider how much more they are giving up in foregone wages by going back to school. Remember, although you may have grown comfortable making $75,000 a year (with all the benefits), all that goes away when you leave your employer. Because of the accelerated nature of a one year program, however, you could be back in the workforce in as little as 12-15 months (as opposed to 2+ years). Depending on your current salary (especially if you are an investment banker or consultant), this difference could be worth more than the entire cost of your MBA.

3) Career path. Are you eligible for a big promotion next year? Does experience mean more than education in your industry (or the industry you want to join after school)? These are questions (and potential costs) you need to consider when figuring out the true cost (value) of an MBA. If you are on the verge of a management-level position, not only are you giving up your salary while you are in school, but also a potential promotion, raise, and bonus to go with it. This can be another advantage of a one year program, as it keeps you out of the workforce for much less time.

Keep in mind that while we would consider the above items as the most critical items, there are many questions you must ask, given your specific situation. Furthermore, there are many benefits of a traditional MBA program (a topic for another article), like potentially better recruiting opportunities, that we have not discussed here. Ultimately, however, for many candidates, the financial and career path benefits of an accelerated MBA program are too large to ignore. What are your biggest considerations as you go through the research and application process for business school?