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.
