Thinking about pursuing your Master of Business Administration (MBA)? If so, then you may be understandably wondering how you are going to pay for it. After all, the average cost of an MBA in the United States now comes in at about $61,800—which is no small sum of money.
At the same time, you should not let the up-front costs of an MBA program deter you from pursuing this degree opportunity. Having an MBA could significantly expand your career opportunities due to your greater education. The key is to understand what your options are when it comes to paying for your schooling. From grants and scholarships to private and Federal loans, there are plenty of ways to take the sting out of paying for an MBA.
Understanding the Cost of an MBA Program
While the average cost for an MBA program hovers around $55,000, there are many factors that influence the cost of this type of degree program. By understanding these influencing factors and the type of return on investment that you may see from an MBA degree, you can have a better idea of what to expect as you embark on this new journey.
Factors Influencing MBA Tuition and Fees
According to US News, some of the top schools for MBAs in the nation charge more than $100,000 for an MBA program. Meanwhile, some schools fall well below the national average, charging around $30,000 (or less) for the same degree.
Ultimately, the most important factor that will affect the cost of your degree is the price per credit hour. Most MBA programs require around 40 credit hours, so you will need to look at the program’s cost per credit hour and multiply it by the number of credit hours required for the program. This will give you your total tuition costs.
In addition to tuition, you may need to consider other expenses related to an MBA program. This includes additional fees such as registration fees and technology fees. Meanwhile, the cost of materials (such as textbooks and supplies) can also add up and will vary from one program to the next.
What Is the Return on Investment of an MBA?
As daunting as it may seem to spend tens of thousands (or even hundreds of thousands) of dollars on an MBA, it is important to remember that you are investing in your future. In many ways, your initial MBA cost may pay for itself many times over when you consider the additional career opportunities and potential for higher earnings that you may enjoy after you graduate.
Many factors can affect the kind of return on investment (ROI) that you might expect from an MBA. However, according to the Princeton Review, the 10-year ROI for an MBA from a top-rated school can exceed 325%! Many people who obtain an MBA could be eligible for higher-paying work, including higher starting salaries and even signing bonuses.
Different Types of Financial Aid for MBA Students
Still wondering how to afford an MBA? There are several different types of funding available to graduate students pursuing this type of degree. Take some time to explore these options and consider which may be most suitable for your needs.
Business School Fellowships
A fellowship refers to funding offered through a college/university’s business school or another corporate partner (usually a donor or a foundation). Recipients of a business school fellowship do not have to pay the money back. Fellowships typically cover a portion of a student’s tuition (though some larger fellowships may cover the entire cost) for a semester, an academic year, or an entire program.
As you can probably imagine, this type of funding is quite competitive. Fellowships are typically awarded on merit with applicants required to submit proof of their previous academic performance (such as transcripts), a formal application, and possibly even a written essay. In exchange for fellowship funding, students may be required to complete a special research assignment or perform other related work to make a difference in their respective fields.
MBA Scholarships
Scholarships are another form of funding to consider. A scholarship can be awarded by a school or a third-party, such as a company or organization. As with a fellowship, a scholarship never needs to be paid back. However, this type of funding can be either merit-based or need-based—and it can cover any amount of a student’s tuition and fees. Some smaller scholarships may cover $500 for a single semester, whereas others may be offered in larger amounts and may even be renewable from one semester to the next.
If you are considering an MBA, it is a good idea to explore scholarships offered directly through your school of choice. If you qualify, you may need to submit an application. If you are applying for any third-party scholarships, be sure to follow the required steps to complete your application in order to be considered.
Graduate Assistantships
Many business schools also offer a limited number of graduate assistantships to students in an MBA program. Specifically, a graduate assistantship is a type of financial aid that provides a paid stipend to a student in exchange for part-time work at the school. In a business school setting, graduate assistants may serve as teaching assistants for 100-level business classes or research assistants for instructors and professors. Assistantship positions are typically offered to students for the entirety of their programs, though some may only last for a semester or a single academic year.
Regardless, working as a graduate assistant can be a great way to build some relevant work experience while earning some money to offset the cost of your degree. An assistantship can also look good on a resume, which may help set you apart from your competition in the job market.
Employee Sponsorships
If you are already employed and will be pursuing an MBA while you are in school, inquire with your HR department about employee sponsorship opportunities or tuition reimbursement. Specifically, an employee sponsorship refers to funding that is provided directly by a student’s employer to help cover tuition, fees, and other expenses related to the degree program.
Not all employers offer sponsorships, but if yours does, this can be a great way to reduce out-of-pocket costs during an MBA program. The idea here is that you will be gaining valuable skills during your MBA program that will help you better serve your employer—so it makes sense that your employer may want to help sponsor your education.
Federal and Private Student Loans
For students who qualify, loans are available through the federal government and private entities, such as banks and credit unions. It is important to note, of course, that student loans must be paid back (in addition to any interest accrued) within a certain period of time. Some lenders may not require repayment until after you graduate, but depending on the type of loan, you may still be accruing interest on your loan while you are in school.
Subsidized federal student loans tend to have the best interest rate and deferment options available, but this can vary. If you plan to apply for any federal funding for your MBA, make sure you complete your FAFSA for each academic year.
Government Grants for MBA Students
Grants are yet another type of student funding that does not need to be repaid, and there are several grants available to MBA students through the government. Many of these are based on financial need, though this can vary. Government grants can be funded by the state or federal government—and they may be renewable or one-time only.
GI Bill® for Military Service
If you have served in the United States military, be sure to look into your GI Bill benefits. Specifically, the GI Bill is meant to cover tuition (up to a certain dollar amount) for graduate studies (including an MBA program). In many cases, this funding is enough to cover the total cost of tuition for an MBA program, so be sure to take advantage if you qualify.
Leveraging Personal Savings for MBA Tuition
In some cases, you may also be able to put your own money to work to help pay for your MBA program.
Utilizing Individual Retirement Accounts and 529 College Savings Funds
If you have an Individual Retirement Account (IRA) or 529 College Savings Fund, you can use the money from these accounts towards your college tuition, fees, and related expenses. If you plan to use money from an IRA to help you pay for school, make sure you understand any tax implications or withdrawal penalties you may incur.
Is It Beneficial to Approach a Business School for Support Early?
If you know which school you wish to attend, it is never too early to reach out for help with financial aid and other funding opportunities.
Strategies to Show You Deserve Funding
Start by reaching out to your school’s financial aid office directly. These professionals can help match you to scholarship, grant, and fellowship opportunities for which you may qualify. You may also want to get in touch with your department head directly with an explanation of your marketable skills and qualifications; there may be a graduate assistantship available with your name on it.
Discover Financial Aid, Scholarships, and More From Post University
It is no secret that graduate school can be costly. And when you already have student debt from an existing degree or certificate program, the thought of potentially adding tens of thousands of dollars to your student debt may leave you feeling uneasy. The good news? There are plenty of ways to make paying for your MBA program a little easier on your wallet.
At Post University, we are committed to helping our students succeed with a cost-effective Master of Business Administration program designed to provide the learning opportunities you could use to move ahead of the competition without draining your finances. Likewise, our MBA program is offered in both online and on-campus formats to suit your unique needs. And if you are looking for financial aid, we have a dedicated team of advisors ready to help you explore scholarships, federal aid, grants, and other options for which you may qualify. Get in touch with our team today to learn more about our program offerings, financial aid opportunities, and payment options.
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