If you’re a college graduate who’s been in the working world for a few years, you’ve probably entertained the idea of going back to school, possibly for an MBA.
There are a long list of reasons to do it, not the least of which is the fact that you can command a larger salary once you’ve completed the two years of study. You’ll also get the chance of accessing excellent networks and mentors that you can rely on later in your career, as well as a much deeper understanding of the business world – making you highly desirable to employers.
There’s just one problem: An MBA is expensive.
The Challenges of Paying for an MBA
If you choose a top business school like Harvard, you can expect to pay well over $100,000 for two years; that price tag doesn’t even account for living expenses and other bills – all while going to school full-time. Even online schools—far less expensive than the Ivy League or public brick-and-mortar institutions—can cost up to $40,000 per year or more.
While those numbers might sound astronomical, they’re actually in line with the rising costs of higher education in general. Even undergraduate programs have skyrocketed, increasing faster than the rate of inflation. If a bachelor’s degree is expensive, an MBA is more so.
Paying for it out of pocket can be difficult. While you may have enjoyed a steady income before grad school, it doesn’t mean you have the money saved up to go back to college. Even the payment plans that many colleges offer might not be enough to help. You may have a spouse and family now; you might be investing in retirement, saving for a child’s college, alongside making mortgage or rent payments.
Even so, an MBA can lead to greater earning potential; it’s a signal to employers that you’re serious about your career and willing to sacrifice for success. It means you’re better trained than those who took the undergrad degree and said it was enough, and you’ll have the contacts and added maturity that comes with two more years of learning. Is an MBA worth it? In short, yes, it certainly can be. Now you just need to figure out how to pay for it.
Solutions to Paying for an MBA
There are plenty of options available to you to help defray the cost; you won’t need to simply whip out your checkbook or credit card. Each solution has its pros and cons; let’s take a look.
Getting Your Employer to Contribute
Many college graduates looking at an MBA program forget that employers have a vested interest in their success—even if they don’t quite know it yet. Many companies have tuition reimbursement programs or even vouchers where the school bills the employer directly. If you maintain an A or B average, you can get your MBA at a significantly discounted rate—or even for free.
Just make sure that you’re not planning to take another position anytime soon. If employers are going to invest in your education, then they’ll expect you to stay there for a set period of time after you finish your MBA program. If you don’t, then you may need to pay back the money your employer paid for your schooling. Talk to your manager or Human Resources professional to see what’s available, and make an effort to understand the stipulations regarding a tuition program.
Looking for Scholarships
You should be doing some research on scholarships as well. In fact, scholarships should always be a priority when it comes to paying for school. There are hundreds of thousands of dollars available for students paying for an MBA. Furthermore, scholarships do not require repayment – they’re free money. Well, they may not be completely free. These opportunities are highly competitive and require effort, but they’re worth your time to look into if you can knock off a chunk of your tuition. Each one has its own criteria for eligibility; you’ll have to research extensively to see what you qualify for and what the requirements are for each opportunity.
Resorting to Student Loans
Finally, you can’t have a discussion about paying for tuition without mentioning student loans. If you need to go that route, then you may want to look into federal student loans first. Get the ball rolling by filling out the Free Application for Federal Financial Aid (FAFSA), and you’ll see your main two options: a direct unsubsidized student loan or a graduate PLUS loan. The FAFSA will tell you how much aid you qualify for – these loans come with interest rates of 6 and 7 percent, respectively, making them relatively competitive.
If you’ve maxed out your federal aid and still see a tuition gap, then you may want to check into private student loans. They’re offered by banks and financial institutions, meaning you must pass a credit application for approval. Good to excellent credit and high income are required in order to be approved (you may need to think about a co-signer if you can’t qualify for a private loan). Given the number of banks, interest rates and offers vary considerably, so it pays to do some research to find the best deal. Keep in mind that private loans come with fewer benefits than federal loans, so they should realistically be a last resort.
There are many reasons to get an MBA; aside from the higher marketability and earning potential, you’ll gain excellent knowledge and experience. Being able to pay for it can be complicated, but with the different options available, you have a good chance at finding the right sort of funding for your ambitions.
By guest author Andrew Rombach, a Content Associate from LendEDU – a consumer education website and financial product marketplace. Since graduating from college in 2016, he’s written about personal finance extensively and spearheaded the establishment of LendEDU News – an authority on all personal finance news.