One of the first hurdles you’ll face after deciding to go to business school is how to pay for it. The average cost for an MBA program is anywhere from $70,000 to $250,000; the more prestigious the school, the more it’s going to cost you. When I was applying for my MBA, I had no idea how I was going to afford it. I assumed I would have to take on significant debt, so you can imagine my surprise (and delight) when I learned that I had received a full scholarship.
Obviously, the fingers-crossed, hope-for-the-best approach isn’t really a strategy, and when it comes to financing an MBA, it pays off to have a strategy planned out. Over the years, I’ve learned a lot from classmates, peers, and my own students about the breadth and depth of funding opportunities for MBA candidates.
Here are my top tips for finding funding for your dream MBA program:
Find fellowships, scholarships, and grants.
The best way to pay for an MBA is with money that you don’t have to repay. I’m talking about free money, otherwise known as fellowships, scholarships, or grants that can be applied to your educational costs. And, unlike undergraduate financial aid, which is often based on financial need, MBA scholarships and fellowships are usually awarded on merit alone.
When awarding aid, business schools will take into account your credentials such as undergraduate GPA, GMAT score, or professional achievements. You may automatically be offered this kind of financial aid upon your admittance to a school or you may have to apply separately. Contact your business school’s financial aid office to find out what scholarship opportunities you may be eligible for.
While business schools themselves award the majority of fellowships and scholarships, private MBA scholarships or grants from businesses, associations, and advocacy groups are available. This is a great option for students who are historically underrepresented in MBA programs. I know many women, minorities, and LBGTQ individuals who were able to receive funding through Consortium, a leading diversity network that connects high-performing students with top-tier MBA programs and awards merit-based fellowships to MBA candidates. Similar sources of funding include Management Leadership for Tomorrow, Forte Foundation, and Fulbright for students interested in studying overseas. Grant funding may also be available through local agencies and government programs, including funding for veterans.
Apply for a graduate assistantship and local funding.
Even with a full scholarship, I had to work throughout my MBA program. Besides tuition, you have to cover the costs of books, supplies, and living expenses. I was able to continue working for a company that I worked for prior to my MBA, but if that’s not an option for you, there are on-campus options you can pursue. A graduate assistantship is a popular option for offsetting some of these costs and often provide money toward tuition as well as a monthly stipend. As the name suggests, business school assistantships require students to assist faculty members with research or grading papers. The advantage of assistantship programs over federal work-study is that they aren’t need-based; high-performing students are usually rewarded with assistantships. The disadvantage is that the number of available spots in the program are typically limited. You should reach out to your school’s student employment office to learn more.
Take advantage of employer aid.
If you currently have a job, you may qualify for education benefits through your employer. Many companies offer funding through sponsorship and tuition reimbursement programs that cover all or part of your MBA. Sponsorships usually cover more of your costs than a reimbursement program, but they also come with strings attached - after graduating from business school, you agree to return to the company for a certain number of years. Employer sponsorship programs are also rare with only 10% of full-time MBA students expected to receive this kind of aid.
Tuition reimbursement programs typically offer between $2,000 and $5,000 toward eligible expenses. Amounts vary depending on the employer, and since it is a reimbursement, you must cover the upfront costs yourself, either through savings or business school loans.
Use your savings.
You should start saving before you even apply to business schools. Most students applying to business school are in their late 20s and have already been working for a few years. If possible, it’s a good idea to put away some of your salary to cover the cost of your degree - this is an investment in you after all!
An ideal budget includes allocating at least 20% of your savings towards long-term goals... like getting an MBA. A friend of mine saved money for business school by maintaining a strict budget for living expenses; she downsized her apartment to keep her rent low and would even return uneaten food to the grocery store. Your budget doesn’t have to be that strict; earmarking even a little money for business school will go a long way to easing the financial burden.
HOWEVER, while investing your own money in an MBA is smart, I do NOT recommend using money from your retirement accounts or emergency funds to pay for business school. Only use money that you’ve specifically set aside to cover business school expenses.
Maximize your time now.
Applying to business school may still be a year or more away for you, but it’s never too early (or too late for that matter) to start financially planning. Business schools are offering more and more scholarship money, and since these awards are most often merit-based, it’s a good idea to sharpen your test-taking/writing skills and seek out leadership roles at work or in the community.
GMAT scores are heavily considered in business school scholarship awards and are especially important if you’re trying to make up for a less than stellar undergraduate GPA. (So you partied a little harder than you studied - no judgement here!) Now is the time to take a lot of practice tests or sign up for a GMAT prep class.
While you’re preparing for the GMAT, you should be honing your essay-writing skills. Not only do you have to complete an analytical writing essay for the test, but you also have to write essays as part of your business school application and for many outside scholarship opportunities. Get to know what kinds of questions will be asked by reading a prior year’s application and practicing your written responses. If your writing skills have gotten a little rusty, JEM offers support services to help you with essay-writing and personal statement development.
You can further improve your chances of getting scholarship money by taking advantage of leadership opportunities through your job. Ask to be placed on a high-level project or talk to your boss about taking more of a leadership role on your team. Or maybe you seek out a career mentor or coach who can help you navigate and take advantage of career-building opportunities. You could also book a consultation with a JEM expert who can help you think about your MBA plan.
Finally, community service is a merit-based activity that even the most overworked individual can find time for. Get involved with local community organizations and groups. Find ways to elevate the community work you’re already doing. Your employer may also sponsor community service opportunities that you can easily participate in. In or out of work, leadership activities are assets to your application and make you a more scholarship-worthy candidate.