|
MBAs are a very big investment. An MBA from a big school can easily cost $100,000 in fees and
living expenses, even without the opportunity cost of no salary for 2 years.
There are a number of ways you can pay for the MBA, the main ones being grants and scholarships,
loans and employer sponsorship.
There are a number of grants and scholarships available in the US, and a good source of
information on these is the admission departments of the business schools themselves. Most
scholarships have a lengthy application process so be sure to start looking at your funding
options well in advance of being acccepted. This is especially true if you are looking at studying
outside of your home country.
The main loans available for MBA students are the Federal Stafford Loan, William D Ford
Federal Direct loans and Federal Perkins loans.
studying in the USA for non-US citizens
If you are thinking about studying in the US but are not a US citizen or resident you will
not be eligible for any government-funded schemes. There other loan and grant schemes
available and, again, the individual schools' admission departments are often a good
place to get this information. Further information can be found at
MBA SCHOLARSHIP AND FUNDING LINKS
studying in the USA for US citizens
The federal government provides assistance by insuring the loan providers against default
by the borrower. There are a number of loan programs like this such as the Federal Stafford
loans, William D Ford Federal Direct loan program and the Federal Perkins loan.
Do make sure that you arrange your finances as soon as possible. Apply for financial aid,
even if you just happen to have all the cash under your mattress. The process can easily take
several months. Applying for an MBA is a tough process and you don't want the extra hassle
of worrying about whether you'll have the money to start the program. By applying early
you'll give yourself the chance to make a good application and you don't have to commit
yourself to whatever loan you are offered.
There are a number of other organisations which also provide assistance.
Federal Stafford Loans
Federal Stafford loans are the most widely available loan program. A bank loan insured
by the federal government, Stafford loans feature a low interest rate that is capped
over the repayment period; payments that are not due until six months after graduation;
maximum borrowing limits. Students who demonstrate financial need can receive subsidized
Stafford loans. Generally, and to be used as a benchmark, keep in mind that a $10,000
Federal Stafford loan borrowed at 8 percent over ten years will cost about $121 per month.
For those students the government may pay the interest that accrues on the loan while the
student is in school.
William D Ford Federal Direct Loan
Federal Direct loans are similar to the Stafford loans, but are made to the student
directly from the federal government through the university. Terms and conditions are
generally the same for Federal Direct and Stafford loans, but universities participate
in one or the other program. Check with each school to see which program they offer.
Federal Perkins Loan
The Federal Perkins Loan is another loan program funded by the federal government.
However, it is awarded by schools based on financial need. Participating schools have
only a limited amount of Perkins loan money. The loans feature 5 percent interest rates,
no origination fees, and interest that does not accrue until the repayment period begins.
Payments are not due until six or nine months after graduation.
A $10,000 Federal Perkins loan borrowed at 5 percent over ten years will cost
about $106 per month.
Financial Need
A useful concept to understand is Financial Need as several loan providers base the
loan amount on this. Broadly, this is the difference between the amount you can contribute
to your education and the total cost of that education as well as the criteria upon which
many types of financial aid are awarded. Your financial resources play a significant role
in determining the amount of financial aid available to you. These resources could include
your income, as well as the income of your spouse if you are married. Your assets may also
be considered. To determine how each school calculates financial need, you must contact the
school(s) of your choice directly.
Most schools consider graduate students independent adults for purposes of calculating
resources. Some schools may require financial information from parents or guardians in
order to determine a student's eligibility for some types of financial aid, and may
expect parents or guardians to contribute to a student's expenses.
Not all financial aid is based on need. While some schools may award scholarships
based only on financial need there are others that will base financial aid on merit
alone or on a combination of the two. You will need to find out what information
each school uses to make financial aid awards. Speak to an admissions officer about
your financial aid concerns at each of the schools you are interested in attending.
The admissions staff can provide information about scholarships, fellowships, teaching
assistantships and other sources of financial aid that may be available through the school.
To apply for need-based assistance, you must file one or more need-analysis forms.
These are used to determine your ability to contribute to the cost of your graduate
education. In an effort to standardize financial aid applications, all federal student
aid programs now require that you file a Free Application for Federal Student Aid (FAFSA).
In addition, many schools require an application to determine eligibility for school
scholarship, fellowship, and loan programs.
In addition to the required forms, some schools may ask for supplemental documentation
to support your application for financial aid, such as your most recent U.S. income tax
form. You may need to provide copies of these forms before you can be awarded financial
aid. If tax forms are a specific requirement, be sure to specify which exact form for
which fiscal year.
Complete information and application forms (including the standard FAFSA) are available
from each school's financial ad office. Be sure to read very carefully any information
about the process for applying at each school! The process may be different at each school,
so do not assume anything about how to apply at a particular school.
The various required financial aid forms and required supplemental attachments are used
to determine your "student contribution." That contribution reflects your financial
ability to pay for your application. (Do not confuse your student contribution with
your out-of-pocket expenses. They are not the same.) Because your ability to pay for
school is based on your income and assets, it is important to inform the financial aid
office in writing if you have special circumstances that will affect your ability to pay
for your education-related expenses. This may lower your student contribution and thus
increase your eligibility for some types of financial aid.
After you have been admitted to a school, that institution will determine what kind of
aid and how much you will receive. The standard formula subtracts your student
contribution from the total cost of education to determine your eligibility for
need-based aid. Then, the financial administrator may consider you for non-need
based programs such as the unsubsidized Federal Stafford loan.
Each school to which you are accepted will send you a financial aid award letter
that will inform you of its decision on aid. If you have been awarded a loan, you
must fill out loan applications and promissory notes. Lenders will send checks directly
to your school. Under the Federal Direct Loans program, the school processes the loan
application, promissory note, and loan check.
In most cases you must apply for financial aid for each year you will be in school
and wish to receive funds. Make sure that you apply for all types of financial aid
for which you are eligible.
MBA Scholarships
A number of organisations offer grants and scholarships to American citizens or to
other nationals studing in the US. More information can be found
MBA SCHOLARSHIPS AND GRANTS IN THE USA
Credit History
The story here is pretty similar to that for other loans. If you have a good credit history
you'll find it easier to get a loan and also you'll often get a lower interest rate (as
you're seen as a lower repayment risk). Very few of us have a perfect credit history but
at least we can find out what the credit rating agencies have on us. You can apply to
the main credit rating agencies (for a small fee) to receive a copy of your credit file. The
websites of the main agencies can be found
CREDIT RATING AGENCY LINKS
|
