How to fund your MBA studies
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Completing an MBA can be a transformative experience, but it comes at a price. Tuition fees, accommodation, food and modest living expenses can total up to £100,000 a year for a student at a top-ranked business school. Even at less expensive institutions, fees alone can amount to £50,000 for an MBA.
Many graduates report a strong return on investment, though the degree requires careful financial planning, says Emily Brierley, head of MBA recruitment and admissions at Cambridge Judge Business School.
“It’s a key part of your MBA preparation. It’s also an investment in your future, so think long term, not just [about] your first job,” she advises.
There are multiple funding sources students can use to pay for their studies; they can combine personal savings with partial or full-tuition scholarships, corporate sponsorship and loans. “We recommend to students that they consider how they are going to fund their studies before applying — and should their scholarship application be unsuccessful,” says Ashley Potter, a spokesperson for Warwick Business School in the UK.
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If potential students plan to study abroad, advises Jan Hohberger, associate dean for the full-time MBA at Esade in Spain, they should first research the funding options available in their home country before exploring those offered by the business schools and host universities. Use the schools’ financial aid offices and try to connect with current students and alumni, he advises. “They’ll be able to explain their experience, guide you through some of the processes and give very useful tips.”
Schools typically offer three types of scholarship: competitive, merit-based and needs-based. The first type is awarded at the end of a competitive application process. The University of Virginia’s Darden School of Business, for example, offers seven competitive scholarship programmes.
“They are designed to identify MBA candidates who demonstrate outstanding academic achievement, professional accomplishments and high promise as responsible leaders with the potential to contribute to the life of the Darden community and the world at large,” says Whitney Kestner, Darden’s senior director of admissions.
Merit-based scholarships are awarded by a committee, usually within the admissions office, based on a candidate’s application as well as metrics and factors around the promise they demonstrate, regardless of their financial status.
Needs-based scholarships and grants are awarded according to a student’s financial situation and are often offered in the hope of promoting diversity. Applications must be made after admission to a programme.
Deadlines for scholarships are, in many cases, different to those for the programme. This requires effective time planning, says Liam Kilby, associate director for MBA recruitment and admissions at the University of Oxford’s Saïd Business School. “It’s also important to research the application requirements for each of those funding options,” he says. “Is there an essay involved, or an extra component in addition to what’s needed to be admitted on to the course? Do they conduct interviews for the scholarship and, if so, when do they happen?”
Candidates in general will be automatically eligible to apply for most options at the school, but it is worth doing research to understand which might “need that extra level of effort in order to meet all of the application requirements”, says Kilby.
The collegiate system at some universities, such as Oxford, might offer additional funding opportunities. Several Oxford colleges have scholarships for incoming MBA students — besides those on offer from Saïd — although applicants will have to compete against candidates from other specialisms.
The majority of students fund their MBA in part, or fully, through a student loan provider. These include banks, finance companies and even governments that lend to nationals of a particular country, while others work across regions. Providers such as Prodigy, Future Finance and Lendwise specialise in educational loans, though repayment terms and interest rates vary.
“If you know in advance you’ll need some financial support from this type of source, it’s very important to initiate conversations with them at an early stage,” says Kilby. Most schools are reluctant to promote particular loan companies, though admissions teams will offer general advice.
Some students are wholly or partly sponsored by their employers. While sponsorship can simply mean an employer allows students to take a one- or two-year sabbatical, some employers also offer financial assistance. Warwick Business School, for example, will provide students with detailed guidance on preparing a business case for sponsorship and how to demonstrate the benefits for their employer.
The number of company-sponsored MBA candidates applying to Oxford: Saïd has increased over the past few years, says Kilby. “If your career plan involves returning to your existing company, then it’s definitely worth having a conversation with them,” he says. “Some companies will have a clearer, more established stance on sponsorship than others, but we’ve also seen several candidates come in who have been the first people to be awarded financial sponsorship from their company.”
The age and experience profile of MBA students means many have had some opportunity to accumulate savings before applying to business school.
“While it’s rare that someone has been able to amass enough savings to cover the full cost of attending business school, it’s certainly common that a proportion of the tuition fees and living expenses can be covered in this way,” says Kilby. At Oxford: Saïd the average MBA student is about 29 years old and has been in full-time employment for five years before enrolling. “Along with potential financial support from family and friends, savings can go a long way to help you attend your target school,” Kilby adds.
Self-funding students either pay the annual tuition fee at the start of each year or can opt to pay in instalments, says Potter at Warwick Business School — adding that, while this does not alter the cost, it can help with budgeting.