Acquiring an MBA qualification is an investment in your career. Unless you have been saving for your MBA for long, the cost of attendance can be quite significant.
Tuition fee is perhaps the biggest cost of the MBA. Living expenses need to be taken into account while doing the MBA outside your home country or doing a residential MBA within your country.
Add to it, the cost of an international study trip, the cost of doing an exchange semester at a partner school, and the cost of books. A two-year MBA is sure to make it even more expensive.
Not to forget the cost of MBA applications, the cost of preparing for and taking the GMAT and IELTS tests, and the cost of visa and return flights if you are studying abroad.
Here are the 7 common ways to fund your MBA program:
1) Self Funding
If you are clear about eventually doing an MBA, it is important to start preparing for it right away. Ensure that a percentage of your salary is automatically diverted to an MBA savings account.
If you have a 5 or 10 year horizon, you can invest this amount in mutual funds and reap benefits of a corpus which can partly or fully fund your MBA.
2) Family Support
You can borrow money from your parents or siblings to partly or fully fund your MBA. The advantage is zero interest rates and flexible repayment schedule.
If you get lucky, your parents might offer to completely waive off the cost. However, it pays to pay back your family members and own the entire cost of doing the MBA.
3) Fee Help
Governments of some countries provide a facility to their citizens to defer the cost of education in the form of a loan upto 100% of the tuition fee. The Government pays the University directly.
After your MBA, once your income reaches a minimum threshold for repayment, the tax office includes the annual compulsory repayment amount in the income tax notice for that year.
4) Corporate Sponsorship
Many companies support their employees in acquiring a part-time or full-time MBA to gain the strategic skills and networks which might help in the growth and profitability of the company.
The company offers to pay the tuition fee in exchange for a commitment by the employee to work for a certain number of years or repay the amount if they exit early.
5) Bank Loan
Applying for an education loan is the most obvious way of funding your MBA. Banks which offer flexible interest rates and a longer repayment window are preferable.
The advantage with bank loans is that they cover the tuition fee as well as the living expenses. Moreover, you can claim a tax deduction on the interest paid on the education loan.
This is the most desirable way to fund your MBA and avoid a student debt. The scholarships can range from a partial waiver to a full waiver of the tuition fee.
Business Schools offer scholarships based on criteria like GMAT score, diversity, and work background. The parent University of the school might offer region/country specific scholarships.
7) Private Lending
An alternative and relatively new way of funding the MBA is through private financial companies that specialize in education loans and operate globally.
Unlike banks, companies such as Prodigy Finance have a simple procedure, don’t ask for collateral or co-signer, and follow a community-based lending model.
Last Updated: 17 June 2017