10 Financial Aid Tips for MBAs

As with MBA scholarships and grants, receiving money from your family or company can help lower your dependence on MBA loans. That’s why you should consider asking your family and/or company for help towards paying for your MBA. Whether or not asking for money is a good idea, however, depends on your own situation, particularly when it comes to sponsorships. Lopez states that sponsorships are “a good option when someone knows that they’ll be going back to that company and they’re comfortable making that decision.”

In addition to paying for your program, you also need to have money for a place to live, food to eat, plus other living-related expenses that come up during your MBA. In fact, the cost of living is the second-highest cost associated with attending an MBA program. While your MBA program will provide you with a suggested budget which includes tuition, fees and living expenses, those factored-in living expenses are moderate. That’s why, according to Botoulas, “anything that could be considered a lifestyle choice should be reviewed carefully.”

“Before committing to business school, students should research the kind of salaries they can expect to receive, post-MBA, in their chosen industry and position,” states Botoulas. Estimating your post-MBA salary is the first step towards being able to evaluate you capability to pay off a loan, as well as the maximum amount you should borrow in the first place.

“We recommend that students contact the financial aid department as soon as they’re admitted,” states Lopez. After that, “any point a student has confusion about the process is a good time.”

There’s a common misconception that financial aid offices are only open when classes are in session when, in fact, most offices are open year-round. Indeed, Lopez says that summer is a particularly busy time for Berkeley-Haas’ financial aid department.

According to Botoulas, students should look at the following factors in order to evaluate whether or not an MBA loan is right for them: “Origination fees, interest rates and whether they are fixed or variable, the term (length) of the loan, grace period but also whether a loan product offers repayment flexibility for economic hardship or unemployment, income-based repayment, loan forgiveness for death or total disability as well as for working in a nonprofit or government agency.” Another major factor to consider is the maximum loan amount.

According to Lopez, it’s “really critical” that students apply early instead of waiting for the final round. Individual business schools only have a certain amount of scholarship money available each year and some fellowships are likely to be awarded very early in the admissions cycle. Even if you are a superstar student, applying late could mean that you will miss out on a scholarship you might have been able to get had you applied earlier.

When it comes to MBA financing for international students, Lopez advises students to look to MBA scholarship and grant options in their own country before looking at options within their intended host country. International students may be competing with domestic students for scholarships and fellowships, so it’s important that they know the full array of options available to them.

In the US, for example, international students can’t apply for a federal MBA loan, which puts them at a disadvantage. At the same time, however, international students shouldn’t rule out private MBA loans entirely, since some business schools (such as Columbia and Berkeley-Haas) will act as a co-signer. Some business schools are more hands on about helping international students find financing than others, so it’s important to find out what services your school provides.