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How to Pay for an MBA: Business School Funding Options
Free money is the best way to pay for an MBA, but you’ll likely need additional funding to cover business school costs.
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Ryan Lane Assigning Editor | Small business, student loans
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The best way to pay for a Master of Business Administration, or MBA, is with money you don’t have to pay back, like fellowships and employer assistance. If you can build significant savings beforehand, this is also a great way to cover graduate school costs. Lastly, you can consider a part-time or executive MBA program in which you can use some of your salary to pay your way.
The average cost of an MBA in the U.S. is $225,605, according to BusinessBecause, a website that connects prospective MBA students, current students, employers and business schools.
If free aid, wages and savings aren't enough to cover the full cost, you may need MBA student loans to fill the tuition gap.
Before you borrow, use these strategies to pay for business school.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.59-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Variable APR
5.34-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.49-15.49%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
5.04-15.21%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
1. Find MBA fellowships, scholarships and grants
Fellowships, scholarships and grants are considered free money — aid you don’t have to repay — and should be your top priority when exploring how to pay for an MBA.
Many fellowships, grants and scholarships are awarded by business schools and based on merit. For these awards, you generally don’t have to fill out a separate application: You are automatically considered when you apply to a business school.
Students can also apply for scholarships outside their MBA program. Many of these scholarships are merit-based and geared toward diversity and inclusion. The National Black MBA Association, for example, awarded $2 million in scholarships in 2021 to help the Black community excel academically, increase income potential and lower unemployment rates.
An ideal candidate for merit-based awards will show how they have excelled in academics, leadership, community impact and other areas of importance to the school or organization.
2. Use employer aid for business school
If you’re working, your employer can be a key resource for funding your MBA. Workplaces may offer education benefits that partially or fully sponsor a graduate business degree. Consider reaching out to human resources to see what benefits your company offers and the requirements that come with them.
Employer sponsorship
Though rare, some employers — like the global consulting firm Deloitte — pay for all of an MBA. These programs often come with stipulations, like continuing to work for the employer for a certain number of years after graduation.
Tuition reimbursement
Most employers won’t fully sponsor an MBA, but about 47% offer some type of undergraduate or graduate tuition assistance, according to Statista, a market and consumer data company. The reimbursement amount can vary by employer. The most recent data from the International Foundation of Employee Benefit Plans, a nonprofit offering employee benefit research and education, shows reimbursements ranging from $5,000 to $6,000, according to a 2019 study. With these education assistance programs, you’ll likely have to cover costs upfront. Make sure you know your employer’s requirements before relying on this option.
Graduate assistantship
Assistantship jobs can provide money toward tuition as well as a monthly stipend. Business school assistantships may require helping school faculty with tasks like conducting research or grading papers. The number of assistantships a school offers is often limited. And unlike federal work-study, assistantships aren’t need-based — only high-achieving students are typically hired. Contact the school’s employment office for details.
3. Build savings
Many students start MBA programs after gaining a few years of work experience. Depending on how far ahead you’re able to plan, consider setting aside money regularly for your degree.
A common rule is to put about 20% of your money toward debt repayment and savings goals, like paying for an MBA. But tackle this only if you’ve already established an emergency fund.
If you have retirement savings, you may be tempted to tap into an individual retirement account or 401(k) to pay for an MBA. Though you may not have to pay an early withdrawal penalty, you’d likely be hit with taxes on that amount and would have less money for retirement. Consider exploring MBA student loans first.
Graduate business students can cover gaps in costs with federal or private student loans. Federal loans are best if you plan to work for a nonprofit or aren’t sure about your career path.
But if you expect a career in the private sector, are employed or won’t need access to repayment programs, like income-driven repayment, you may be better off shopping around for a private business school loan. Here’s why:
Federal interest rates and fees are higher for grad students. Unsubsidized federal loans come with higher interest rates for graduate students (6.54%) than undergrads (4.99%). Interest rates on federal graduate PLUS loans are 7.54%. Unsubsidized loans come with an origination fee of roughly 1%, but that fee is four times higher for PLUS loans. Most private lenders don’t charge origination fees.
Your work history is likely an advantage. All federal loan borrowers receive the same interest rates. Private loans determine rates based on your financial situation. If you’ve worked for a few years before getting an MBA and have built your credit, you may qualify for a lower interest rate than federal student loans offer. You could also save more by opting for a variable-rate loan if you plan to pay off your loans fast or are confident you can afford payments if the interest rate rises.
All graduate student loans accrue interest. Graduate students aren’t eligible for federal subsidized loans — loans where the government pays the interest during certain periods, like when you’re enrolled in school at least half time. Because only unsubsidized loans are available for graduate students, you wouldn’t qualify to receive these potential interest savings.
You can use a student loan calculator to determine how much your loans will truly cost you. For example, a business school student graduating with $65,000 in MBA student debt could expect to pay $23,721 in interest. That is on top of the $65,000 principal, assuming a $739.39 monthly payment, 6.54% interest rate and 10-year repayment term.
After receiving your degree, you can refinance MBA loans if you think you will qualify for better loan terms.
Executive MBA programs are for seasoned professionals; the average student has been in a management position for about nine years, according to the Executive MBA Council. These students work full time while attending school on a modular schedule, like every other Friday and Saturday.
In 2022, 27.5% of executive MBA students received partial sponsorship, according to the Executive MBA Council, and 16.4% received full sponsorship. Those who don’t receive a sponsorship can use the same types of aid available to other MBA students. Though executive MBAs don’t follow a traditional class schedule, they still meet the half-time enrollment requirement to qualify for federal student loans.
What funding options do international MBA students have?
International students can use many of the same methods to pay for an MBA — except for federal student aid. This is typically available to U.S. citizens and eligible noncitizens only.
International MBA students may be able to take out private student loans, if they have an established credit history or an eligible co-signer. Otherwise, look for lenders who prioritize international students.
Executive MBA programs are for seasoned professionals; the average student has been in a management position for about nine years, according to the Executive MBA Council. These students work full time while attending school on a modular schedule, like every other Friday and Saturday.
In 2022, 27.5% of executive MBA students received partial sponsorship, according to the Executive MBA Council, and 16.4% received full sponsorship. Those who don’t receive a sponsorship can use the same types of aid available to other MBA students. Though executive MBAs don’t follow a traditional class schedule, they still meet the half-time enrollment requirement to qualify for federal student loans.
What funding options do international MBA students have?
International students can use many of the same methods to pay for an MBA — except for federal student aid. This is typically available to U.S. citizens and eligible noncitizens only.
International MBA students may be able to take out private student loans, if they have an established credit history or an eligible co-signer. Otherwise, look for lenders who prioritize international students.
