Getting your MBA acceptance letter is a once-in-a-lifetime experience. But submitting your deposit for business school is a thrill of a different kind. After you decide where to attend, you’ll only have a few months to get your finances in order. It’s never too early to assess which MBA funding source makes the most sense.
Scholarships and fellowships:
It’s worth noting that scholarships for MBA students have increased in recent years. As we shared with Find MBA, the number of scholarships awarded to our clients overall has risen by 10 percent annually over the past three years.
In fact, our client pool received $4.8 million in scholarship dollars last season. About 20-25% of SBC clients receive scholarship packages ranging between $10,000 to full-ride offers valued at $200,000. Also, we have had countless clients who received merit scholarships from 2+ schools upon admit notification.
Your application quality on its own can invoke a windfall of scholarship dollars. Diligence and strategic planning in developing your MBA application pays off, as we mentioned in Find MBA.
However, fierce competition for these scholarship dollars means you’ll benefit greatly from having the time to build a strong pitch for why you deserve a coveted spot in the program.
The key is to know your own niche relative to the cohort in which you’re competing. Then, identity and showcase ways you are unusual relative to your industry’s applicant pool. The savviest students receive multiple offers and can leverage them to negotiate a slightly larger offer.
Remember, you may have to submit a different application or essay for each fellowship or scholarship. Look beyond your business school, too, to organizations such as the Forte Foundation or Consortium for Graduate Study in Management. Both offer highly valuable scholarships for MBA students.
If you’re one of the lucky few with a sponsorship offer, make sure you know what you’re getting into before you accept this MBA funding source. Sponsorship often comes with an obligation to return to the company after you complete your degree.
Therefore, you’ll want to take a step back and assess whether you’re confident you wish to return. Breaking such an agreement after you earn the degree can lead to strained relationships with former colleagues. It can also leave you with a mountain of unforeseen debt.
If you plan to return to your company but don’t have sponsorship, it never hurts to ask about options. See if you’re eligible for any reimbursement given the new skills you’ll bring to the table.
This less obvious MBA funding source comes with a few extra considerations. First and foremost, you should always think hard before touching funds set aside for retirement. However, those who have saved aggressively already and plan to continue doing so may find it worth it to take some money out for the short term.
You’re exempt from the 10 percent penalty for early withdrawals when you put the funds toward qualified higher education expenses, of which attending business school is one. You’ll still face income tax on this money. But the tax burden will likely be less when you’re in a graduate student tax bracket.
The U.S. government offers at least two loan options for each academic year: the Stafford Loan and the Grad PLUS Loan. To tap into this MBA funding source, you can apply for these loans online via the Free Application for Federal Student Aid. Also, the Department of Education is an excellent resource for information on rates, fees, eligibility, and more.
This summer, Nerd Wallet published a roundup of their favorite federal and private MBA student loan options for 2020. Check out their recommendations as a jumping-off point.
When you’re looking for the right loan, it pays to shop around. Find a lender you trust at an interest rate you like. Private loans can provide customized options to help you save, sometimes at rates even lower than the federal government’s. If you’re looking to augment your other MBA financing, seek a lender with excellent customer service and ask about what loan options can maximize your savings.
Finally, use an online MBA student loan calculator to organize your costs and see how loans with different interest rates can work in your favor. Your MBA is a significant investment. Make the best use of the months ahead to make sure you have all the funding you need.
This previously published post has been updated with new information in 2020.