Your dream came true! You got into the MBA program of your choice!
You’re already fantasizing about the stock options you will get as a CEO, and the amazing opportunities you will have. There’s only one little thing to sort out… you’re going to need to figure out how you will pay for this whole deal. A U.S. MBA plus living expenses can run up to $200K, not to mention forgone salary, so even if you were born with a silver spoon in your mouth, that can still be quite a hefty sum.
Ideally you have been saving up for a few years and developed a nice golden nest egg. But even if you haven’t, don’t worry! There are still many ways to fund your MBA.
Some combination of loans and savings is the most common way to fund an MBA. Things are slightly different for U.S. and foreign citizens, so let’s have a look at each separately:
Loans for U.S. Citizens:
U.S. citizens have the option to apply for a few different types of student loans: There is the Federal Perkins loan, which is a school-based loan program for undergraduates and graduate students with exceptional financial need; the Federal Unsubsidized Stafford loan, through which grad students can borrow up to $20,500; and the fixed-rate federal PLUS loan, which can cover the entire cost of tuition. There are also a number of other fully private loan options.
Loans for International Students:
International students are, for the most part, ineligible for any of the U.S. federal loans described above. That having been said, your own government might have loan or scholarship schemes. Private loans ARE an option, however the vast majority of private loans offered by U.S. institutions require a U.S. co-signer. Time to sweet talk those U.S. relatives and friends! Some schools offer official loans without the need for a U.S. resident co-signer with good credit, and in many top programs, the school itself is willing to act as the loan guarantor. In general, the costs of borrowing are higher for international students.
Pretty much every MBA program in the U.S. offers merit-based scholarships. For the most part there is no need to apply for anything here. When you get your acceptance offer, you will get a scholarship as an enticement to choose their school.
There are tons and tons of targeted scholarships out there. Some are run by government institutions (for example, we have had clients from Saudi Arabia and Indonesia attend B-school on full government fellowships) and some by private organizations. However, most are run by a specific school. Many of these scholarships are focused on a specific demographic – MBA scholarships for women, candidates from a specific country, military veterans, needs-based candidates, candidates with strong community service, etc. For example, Stanford offers the “Reliance” scholarship specifically for students from India and Yale has a large slate of offerings at its school of Business. Outside government and the schools themselves, you have organizations like the Forté Foundation, which focuses on women leaders, or The Consortium, which focuses on minority scholarships. There are many, many options out there, each requiring detailed and in-depth research depending on your specific situation. Harvard’s external funding page is a good place to start.
3) Sponsorship From Employers
Many employers will offer scholarships or support for their workers. Most famously, some banks and big consulting firms, like McKinsey, Bain, and Boston Consulting Group, all have official channels through which candidates have their tuition covered. Some companies, like Microsoft, have official channels that don’t “pre-sponsor” (you need to get in first, and ask for the tuition coverage once you have the acceptance). Even if your workplace has no official channel to provide funding for an MBA, we have found that it can often be good to ask. Many companies will free up some money for tuition in exchange for a promise to return. Keep in mind that money from employers does often come with a condition to remain at the company for several more years.
4) Loan Forgiveness
Those making little money post-MBA in socially beneficial industries (like education or nonprofit) can in some cases, and at some schools, be granted loan forgiveness. Stanford and Yale, for example, have loan forgiveness schemes for graduates who work in nonprofits.
5) Funding For Military Candidates
Primarily through the GI Bill, veterans have the opportunity to have the government fund their MBA (fully, at some schools). Since the launch of the Yellow Ribbon Program, veterans have even more options – many schools (Yale, for example) fund tuition expenses that exceed the highest public undergraduate tuition rate in the state, offering more funding for more expensive programs.
Whatever your situation, there IS a solution out there. Most MBA programs do not want financing to be an obstacle to your attendance, and many schools will work hand-in-hand with international students to help them secure their loans.
A U.S. MBA is expensive, but instead of seeing this as “money spent,” it is better to see it as an investment. For many students from abroad who plan to work in the U.S., an MBA can mean an immediate quadrupling of their salary. U.S. students make back their money over a slightly longer timeframe, but an MBA is still a fantastic investment with great returns. So once you get over the initial sticker shock, start digging into some of these options!