Tracking Down the Funds: How to Pay for Your MBA

Tracking Down the Funds: How to Pay for Your MBA

An MBA is expensive. Here are some tips for getting the money together to do one

Let's face it: an MBA is expensive - substantially more than most master's programs. And when you start adding up living expenses, books and transportation costs, the total price tag can be enough to make some potential MBAs think twice.

A high price tag, however, doesn't have to be a deal breaker. One reason is that many MBA programs will pay for themselves in the long run. 

When considering an MBA program, “in a large respect you're going to look at costs, but you have to look at costs in the context of the return on investment,” says Salomon Medina, associate director of financial aid at Rice University's Jones School of Business.

According to Keegan Pierce, associate director of international admissions at ESADE Business School, to make that investment, a potential MBA student should ask herself, “what is it that I can contribute through my own sources, and what is it that I can get through the school that I'm applying to, and how can the school help me out?”

Beyond savings and family funding, support generally comes in two forms: scholarships and loans.

Scholarships

For many budget-conscious students, scholarships based on merit are the holy grail of MBA financing, because they don't have to be paid back. They're usually highly competitive, and many are restricted to certain groups of applicants. For example, many business schools offer scholarships just for women or students from specific countries.

For business schools, these scholarships are a way of recruiting a more diverse group of students. For example, Bath School of Management offers a “third sector” scholarship specifically for participants who come from NGOs and non-profit organizations. 

According to Rachel Foster-Borman, the school's MBA admissions and marketing director, the school offers this scholarship because it values people from the sector, but finds that “roles in the third sector are typically not as lucrative as [similar] roles in other industries.”

To determine an applicant's suitability for this type of scholarship, business schools will usually look at a variety of factors. 

“It's not just looking at GMAT scores,” says Jones' Salomon Medina.“They're looking at everything: they're looking at experience, they're looking at recommendations, they're looking at career trajectory.”

ESADE's Keegan Pierce would agree. “For us, there's no one specific factor that tends to trump all others,” he says. The school looks “closely at the essay and the arguments that you put forward for why you are deserving of the scholarship.” 

Furthermore, business schools are looking for students will will add something to the incoming MBA cohort, whether that's being an active classroom participant, or organizing student clubs or social outings.  

According to Pierce, “we look for people who we feel like are going to be outstanding in a number of ways, and not just they happen to look good on paper.”

Loans

After scholarships, loans are another main funding source for MBA students. In the US, student loans have traditionally come from the federal government's department of education, but as that funding shrinks, banks and other private financial institutions are increasingly filling these needs. 

“On the government side here in the US, they're really limiting funding for graduates to student loans,” says Jones' Medina. However, Medina notes that some states (such as Texas, where Jones is located) also offer loan programs that are separate from the federal government.

However, in the US (and many other countries), international students who would like to take out loans will usually require a citizen or permanent resident to co-sign.

Many business schools also have arrangements with banks, who can provide loans to students. In some cases, international students may be eligible for loans trough these partner banks, sometimes without a co-signer.

Other funding sources

Beyond personal savings and help from family members, some MBA students find that their employers might also be willing to foot some of the bill, although it might take some convincing. 

“The important thing is to make the case to your employer as to what value the degree will bring back to the company,” says Salomon Medina.

Often, this kind of arrangement might come with a caveat that the student will have to return to the company, MBA in hand, for a certain amount of time after graduating.

Additionally, a summer internship or project can be a good way to bring in more money. Typically, the summer between the first and second years of a two-year MBA program “is when people get back to earning money, which can go towards their living expenses and their tuition,” says ESADE's Keegan Pierce.

“And often times those internships continue on a part-time basis into the final portion of the MBA.”

General MBA financing tips

• Apply early: Applicants who apply in early application rounds usually have access to more scholarship money.
• “Look for competitions linked to your MBA program with financial prizes associated and opportunities for funded final projects,” according to Bath's Rachel Foster-Borman.
• Be transparent: According to ESADE's Keegan Pierce, asking about scholarships shouldn't be the first point of contact with a school, but if you intend to apply for a scholarship, it's good to communicate that early on.
• Ask about payment options – you might not have to pay all at once.
• According to Jones' Salomon Medina, MBA applicants “can look at professional or civic organizations that they're involved in,” who might not advertise that they have education funding programs.

Landing a Job After Your MBA

Even before you start an MBA, take steps to maximize the chances of getting a great job when you graduate.

It goes without saying that for the vast majority of MBA students, the primary goal is to get a great job after graduation.

A job certainly isn’t something that is handed to you when you get your diploma, but there are concrete steps you can take to maximize your chances. Here are five things you can do, starting right now, to get the best job you can after you graduate.

Landing a post-MBA career takes a bit of direction

1. Start early

It’s never too early to start the process.

Thinking about your motivations for pursuing an MBA, and considering what you want to do after you finish, is a good way to start, even before you apply to MBA programs.

And indeed, many business schools can help with this process, even before you set foot on campus.

“We try to engage with our students right from the minute they apply for the program,” says Sue Thorn, the director of “CareerPlus,” the career development department at Warwick Business School.

Before they start the program, students enrolling in the MBA at Syracuse University’s Whitman School of Management participate in a series of self-assessment activities that are designed to help them analyze their strengths and prepare for their career search.

“It's really helpful for students to do a lot of self-reflection and engagement in research on career choices prior to actually coming into their MBA program,” says Angela Petrucco, the assistant dean for career services at Whitman. Because once you start an MBA, having clear career goals will help you make important decisions, such as which electives to take and which networking events to attend.

Starting early has the added benefit of helping to narrow down your MBA search. For instance, if you know you want to work in the United States after graduation, you might decide to focus on US-based business schools, rather than those in other countries.

Think about what you want to do after your MBA

2. Know yourself

“For any individual, the first step in successfully managing a career is knowing what you want, and if you have the skills needed to get it,” according to Yvonne Li, the director of admissions and career services at China’s CEIBS.

Indeed, knowing what you can offer to potential employers can help you hone your career path. But it’s also about knowing what you want out of a job, as well as what workplace aspects you’re not prepared to compromise on.

According to Warwick’s Sue Thorn, a prospective MBA should ask herself, “If I had a blank piece of paper, what would my starting point be? What would my ideal role be?”

To do this, there are a variety of tools, such as the Keirsey personality assessment test and other career assessment tests, which can be helpful.

Business schools' career services departments can help with the nuts and bolts of landing a job

3. Set realistic career goals

Armed with a better sense of self-awareness, you can start thinking about what you want to be doing after you finish your MBA. Take somebody who has been working as a scientist, for example. The scientist might ask herself what her assets and transferable skills are.

The scientist might decide that, based on her interests and having accrued a set of analytical skills in her work, she might be best equipped to go into marketing, or perhaps another quant-heavy field like finance.

For some students, it can be challenging to think outside of the box.

“I think one of the biggest challenges,” says Warwick’s Sue Thorn, “is following their own career path rather than following the crowd.”

“It's quite easy to get swept up in thinking that, 'oh, everyone is applying for investment banking or consulting, perhaps I should do that.’”

In this sense, it’s important to research a number of different career paths and even meet with people working in a variety of different fields, in order to get a sense of what’s out there.

4. Leverage internships and other hands-on experiences

For many MBA students, internships are one of the most effective ways to land a job. Indeed, according to a recent corporate recruiters survey from GMAC, some 85 percent of the surveyed companies who had MBA interns last year ended up offering full-time positions to these individuals.

This is because many companies see the internship almost like an “extended interview” where you can actually prove your worth on the fly.

But perhaps more importantly, an internship can be used to add skills to beef-up your profile.

For example, Whitman’s MBA students can take advantage of consulting projects with real companies, where “they're applying the business skills that they're learning in the classroom to real-life problems, and they're gaining experience that they didn't have prior,” according to Angela Petrucco.

Job fairs and networking events are great places to get leads on a post-MBA job

5. Stand out by taking advantage of b-school resources

All legitimate business schools have some kind of career services support. This can include everything from leadership-development seminars to networking events.

Networking, in particular, can be a great way to generate career ideas and find job leads.

Networking can start early on in your studies. For instance, each September, CEIBS’ career development center organizes a “Career Exploration Day” for incoming students.

“We invite business leaders/CEIBS alumni to share their expertise on various industries/functions, individual career planning and job searching strategies,” according to Yvonne Li.

Many career services departments will also help with the nuts and bolts of the job search process: the resume prep, the cover letters, and even the interviews. According to Angela Petrucco, staff at Whitman’s career center will do one-on-one mock interviews with MBA students; and students even have the option of using an online system to record their interviews and review them later.

These and other resources are there for every MBA student, and taking advantage of them during your program will help give you a leg-up during your job search. Because landing a job, in the end, is about more than just the degree.

“Most recruiters post-MBA are not just looking for someone who gets high academic marks,” says Warwick’s Sue Throne, so “take as many opportunities as you can to meet as many people, and really embrace everything that the MBA can offer you.”

“Because what you're trying to do is stand out, rather than just say that you have an MBA.”