How Can I Pay for My MBA?
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- An MBA can increase your salary potential, but many programs aren't cheap.
- Common funding sources include student loans and scholarships.
- Public schools usually offer the lowest tuition rates, particularly for in-state students.
- Online MBA programs may offer tuition discounts.
How Much Does an MBA Cost?
Many factors affect the cost of a master's in business administration (MBA), including the type of school, location, and program format. Tuition rates vary widely, but the National Center for Education Statistics (NCES) reports that the average cost of tuition and fees for graduate programs was $19,792 per year in 2019-2020.
Business students can often save money on their MBA by paying in-state tuition at a public college. Some public schools may also offer reduced tuition rates to online learners.
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Paying for Your MBA
Wherever you enroll, you'll likely need to make decisions about how to finance your education. Research potential funding options before you apply to schools, as this can help you decide which programs to apply to.
MBA candidates can choose from many different options to fund their studies, with the most popular including scholarships and student loans. This list highlights several common MBA funding sources.
Apply for Scholarships and Grants
Both scholarships and grants offer higher education funding that students do not need to repay. These awards rank among the most desirable sources of financial aid, but they can also be competitive. Scholarships typically consider student merit, such as academics and extracurricular activities, while grants primarily consider financial need.
Many types of organizations offer MBA scholarships, including private businesses and nonprofits. Grants may be harder to find, and federal awards, such as the Pell Grant, don't cover graduate education in business. Certain scholarships and grants may serve students specifically pursuing business degrees or certain career fields, while others serve students from specific backgrounds.
Apply for Financial Aid
Applying for financial aid is another relatively simple way to fund your education. Your school's financial aid office can answer questions about financial aid and funding sources.
Completing the FAFSA is the first step toward obtaining both merit- and need-based aid. Merit-based aid considers grades and other extracurricular activities, while need-based aid only considers your income. After receiving your financial aid offer, you may be able to appeal your financial aid decision if you think you need more funding.
Online students apply for financial aid using the same process as on-campus students. Many schools and organizations offer financial aid and scholarships specifically for online learners.
Apply for Fellowships
MBA scholarships and fellowships provide academic funding that does not require repayment. However, fellowships more commonly fund graduate education, including master's and doctoral programs. While scholarships usually offer aid for a single year, fellowships may cover the entire duration of your studies. Some fellowships even offer a living stipend along with tuition funding.
Given the amount of funding they provide, fellowships are often more competitive than scholarships. The application process for fellowships may also include extra components, such as a research proposal or an interview.
Some fellowships require participation in research projects or apprenticeships. Pay close attention to the requirements listed for grantees, so you're aware of what you may be required to do to maintain your fellowship award.
Common fellowships for MBA students include:
- Forté Foundation MBA Fellowship
- Goldman Sachs MBA Fellowship
- Reaching Out MBA Fellowship
- Harvard Business School Forward Fellowship
Find a Teacher's Assistant Position
Some MBA programs offer teacher's assistant positions, which provide a stipend in exchange for teaching or assisting in college courses. At some schools, working as a TA also comes with tuition remission.
TAs work part time while in school — usually no more than 20 hours per week. Payscale data from February 2022 reports that graduate teaching assistants earn an average annual salary of about $21,000. As a TA, you may also receive employee benefits, such as health insurance.
Seek Employer Sponsorship
Many companies fund their employees' education as part of professional development initiatives. While hardly a universal practice, it never hurts to ask your employer about potential education sponsorship opportunities. You may be able to receive full or partial tuition coverage for your MBA.
Employer sponsorship programs may include certain requirements, such as attending a specific school or studying a specific MBA concentration. You may also need to agree to remain with your employer for a set amount of time after they fund your degree. Similar to employer sponsorship programs, some companies may help you repay your student loans after earning a degree.
Take out Student Loans
Even the most affordable online MBA programs may require you to borrow student loans. Many MBA candidates take out student loans to cover most of the expenses associated with education, including tuition, housing, textbooks, and transportation.
You may need to use a mix of federal and private student loans to finance your education. In general, federal loans offer more lenient repayment options, but they may not cover the entire cost of your education. Private loans feature more strict repayment policies, which can penalize you for lack of payment.
NCES reports that MBA students in 2015-2016 graduated with an average of $65,090 in student loan debt. Many MBA students take on debt to earn a degree quickly and a higher salary after graduation. With higher earnings, MBA graduates can often pay off their loans quickly.
How Can I Save Money on My MBA?
Find a Part-Time Degree Program
Many affordable online MBA programs offer part-time enrollment options to accommodate working students. Part-time programs take longer than the standard two-year completion time for an MBA, but you may be able to work full time while you're in school. Part-time enrollment can help you earn an advanced degree without greatly affecting your current income.
Part-time students typically receive less financial aid than full-time students, but they can still apply for student loans and other aid opportunities. Schools typically offer part-time courses in the evenings and on weekends, so attending classes may not affect a work schedule. While part-time enrollment creates flexibility for working professionals, it also keeps them in school longer than full-time students.
Find an Accelerated Degree Program
Some schools offer accelerated programs that let you complete a heavier course load each semester to graduate faster. Schools may host accelerated MBA programs both online and on campus, but these degrees are particularly suited to online learning. Some asynchronous and self-paced online programs allow you to move through coursework as quickly as you're able to.
Accelerated programs usually require full-time enrollment, meaning you can still receive financial aid and student loans. Tuition rates vary widely among programs, but you may save on tuition expenses if the program charges by the semester or by the year, rather than by credit.
Opt for a Public College or University
Choosing a public college rather than private college can help you reduce your overall education expenses. NCES reports that graduate students in 2019-2020 paid an average of $12,400 in tuition and fees at public colleges and $26,597 at private colleges. Public schools may also charge lower tuition rates to in-state students, which can help you save even more.
If you enroll as a fully online student, you may receive special tuition discounts, even if you're not a state resident. To attract students, some colleges offer in-state tuition to online learners regardless of where they live.
Frequently Asked Questions About Paying for Your MBA
Can you get paid to get an MBA?
You have many options to fund your MBA, and it's possible to receive money to earn your degree. Fellowships may provide full tuition funding along with a stipend, effectively paying you to go to school. It's also possible to fund your MBA through employer sponsorship, though these opportunities vary widely among employers.
MBA scholarships can also provide enough funding to offset the cost of tuition. But scholarships may only fund tuition, leaving you to cover other living expenses. Working as a teacher's assistant can also help you receive income while you earn your MBA.
Is the cost of an MBA worth it?
Even the cheapest online MBA programs can result in significant student debt. However, most MBA candidates weigh the cost of the degree against higher future earnings made possible by advanced education. Payscale data reports that the average annual salary for MBA-holders was $92,000 as of June 2022.
Salaries for MBA graduates vary widely by factors such as the school attended and the industry of employment. Graduates of top-tier programs may command higher salaries, while graduates of less selective programs may obtain lower starting wages. MBA candidates must decide if the cost of tuition is worth the potential to earn a higher salary in the future.
Can I use my 401K to pay for my MBA?
You can withdraw funds from your 401k or other retirement accounts, such as an IRA, to finance your MBA. While making early withdrawals from these retirement accounts usually results in a penalty, funds withdrawn to pay for an MBA may be covered as "Qualified Higher Education Expenses" and not subject to withdrawal penalties.
Withdrawing funds from your 401k comes with some drawbacks. Taken out of a retirement account, your money will no longer grow through investment. However, most students see the MBA as a professional investment. Withdrawing from a 401k may be a practical choice if you know you'll be earning a higher salary after graduation.
Check with your tax advisor or 401k administrator to understand the potential fees, tax liability, and penalties associated with this strategy.
Are specialized MBAs more expensive?
Many schools offer specialized MBA programs with concentrations in areas such as healthcare management or information technology. These programs build industry-specific skills that can help MBA graduates obtain high-paying jobs after graduation. A specialized MBA usually does not cost any more than a general MBA. But the number of schools that offer them may be limited, reducing tuition and program options.
Students who earn a specialized MBA may be able to distinguish themselves in a competitive job market and land a position with a higher salary. Even the most affordable online MBA programs may offer specialization options, and it doesn't hurt to investigate a program's concentration offerings.