If you’re already wealthy enough not to have to worry about financing your MBA program then you could ask yourself if business school is necessary for you at all. And if you haven’t asked yourself that question yet, perhaps your lack of business acumen isn’t right for business school in the first place.
When MBA candidates initially look at the business school fees at most of their preferred programs, it can cause a degree of shock. After all, MBA fees at the top schools can figure in the high tens of thousands of dollars.
When one factors into this the year or two out of earnings, depending on the length of the full-time MBA program, as well as living expenses, study expenses, travel and so on it is hardly surprising that, for a percentage of candidates, the business school trail ends right there.
However, while MBA programs are not for everyone, successful MBA students are those who perceive business school not to be a cost at all but an investment.
Whether you are a ‘career-developer’ staying within your chosen career or an MBA ‘career-changer’, most MBA programs are designed to help you progress financially after you graduate.
You probably will not earn mega-bucks immediately after you leave business school. Regardless, MBA graduates earn, on average, more than any other graduate and, with perhaps 30-40 years of work ahead of you, the return on investment of most MBA programs is extremely high.
Return on investment (ROI) can be calculated by the increase in salary over a career lifetime after graduating. An easier way to look at it is to calculate how quickly your course will pay for itself.
There are no strict rules for this as there are too many variables, such as what your current earnings are, what your expected earnings will be and so on. However, if it will take more than ten years to get a return on your investment, something in the equation needs to be looked at closely before you sign the check for those course fees.
Paul Danos, dean of Tuck School of Business at Dartmouth, says: “We look all around the world for the best talent. A lack of money never stopped the right candidate coming to Tuck.”
This is a reference to most business schools’ internal departments, which are designed to facilitate MBA students’ passage through the course; helping them finance their MBA programs.
While the business school itself is unlikely to literally dig into its own pockets to pay a student’s way, the best schools will provide a wealth of methods to get the student through their MBA.
MBA scholarships, particularly in the US, are a favored method. There are ways the school can help guarantee loans or be aware of other avenues of funding, especially for international students, that they may not have been aware of themselves.
“I spent almost as long on my scholarship research as I did on finding the right business school,” says one MBA student.
Indeed, MBA scholarships are written into the fabric of business schools in many countries. There are scholarships which are school-specific, often named after the benefactors or alumni who offered the money for the scholarship initially. There are scholarships for MBA candidates from certain backgrounds too, which are usually much harder to find.
Additionally there are international scholarships, not specific to any school in particular, such as QS’ very own Leadership and Community Scholarships. These total US$30,000 and are awarded to seven candidates who apply individually by stating their case for why they feel they have achieved enough to be offered the award. Candidates have to attend one of the many QS MBA events and be accepted to an attending business school in order to qualify.
In addition there are other scholarships available worldwide that can be found with good research. However, not all scholarships are absolutely genuine and a lot of background work is recommended before applying for these. The general rule is if something sounds too good to be true, it probably is.
For some years, loans have seemed like a dirty word in some parts of the world.
Even now, banks in the UK and USA are less inclined to offer loans to students from their own countries, let alone from overseas, and in many cases the repayment rates can seem extravagantly high for those loans.
Despite this, money is available and it is worth looking at all the options available in the country you’re choosing to study in.
Some banks are more aware than others in this regard and, as MBAs tend to earn decent salaries when they enter the workplace, one would think banks would consider them a safe bet. To some extent this is still true, although it is a fact that loans are harder to come by, and more expensive, than they were some years ago.
Likewise, with loans, for any MBA student who bankrupts themselves by taking on a loan at a terrible rate of interest or repayment criteria, business school may not be ideal for them in the first place.
In 2008-2009, company sponsorship for MBA programs had all but disappeared as corporations tightened their belts in the face of an international recession. Training and development is often the first thing to go in such straitened times.
However, by the summer of 2011 the situation looked a lot less bleak and it appears that companies are starting to look again at their education budgets. After all, if they feel they have a person worth investing in, in order to keep them with the organization, it is likely to be more cost-effective to develop that person at business school and retain their talents than to let them go, having to then reinvest in a new and untried staff member.
One such person, an MBA candidate at American Express in the UK, said that her boss was “more than encouraging” and even brought the idea of business school to her rather than the other way around.
If you feel your communication levels with your current company are good, then it is worth asking them what their opinions are on the issue. You may find that your boss is more amenable to this than you first thought.
Whatever the methods you choose to pay for your MBA fees and to cover your costs while attending business school, the return on investment financially is usually very persuasive.
Other returns, such as career flexibility, networking and amazing business advice are well worth the investment, most MBA business school alumni agree.
In terms of understanding how to finance an MBA program, try exploring the links below for more advice and resources: