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MBAs are not cheap. Big international schools are incredibly expensive. But you probably already
knew that. If you're planning to find the cash, what are your options?
Grants and Scholarships
This is free money, money you don't have to pay back. Sure, you have to fill in loads of
forms but it's free money. (Are we clear on that point?).
Specialist Loans
Many countries have some kind of loan scheme which provides loans for business school
courses at below market rates. These vary from country to country and here we mainly look
at the UK and US.
General Loans
There are other loan options such as adding the cost to your mortgage and unsecured loans.
Specialist loans are usually a better bet, but these do represent an alternative.
Employer Sponsorship
This is more common for executive, part time and distance learning MBA courses, but some
employers will sponsor or part-sponsor full time programs. For part time MBA programs there
may also be strings attached (lock-in periods, etc) so the money is not always entirely
free.
We have more detailed guides to loans and scholarships for the UK and USA in these articles:
MBA LOANS & SCHOLARSHIPS IN THE UK
MBA LOANS & SCHOLARSHIPS IN THE USA
Your options
You'll probably want to look carefully at all of the options listed here. As soon as you start
looking at doing an MBA you need to think about how you're going to fund it. For grants and
scholarships especially there are a lot of hoops to jump through and deadlines to meet. We know
it's obvious, but don't miss out on grants because you miss the deadlines.
If you're looking to your employer to fund all or part of the cost you need time to plan your
campaign to get the funding.
There are also a number of other options which can help to pay for your MBA. The main ones are:
work-study in the US, paid consultancy projects carried out as part of a full-time MBA, and sign
on bonuses when you start your new job. Most business schools will also be able to provide
you with information on funding options from their admissions office.
Grants & Scholarships
This is free money (did we mention that?). Therefore make sure you look at all the options.
The major source in the US are the business schools themselves. Qualifying criteria vary
but they are usually related to test scores, financial need, life experiences, etc. What
the grants cover also varies, perhaps including tuition, some living expenses or a
proportion or fixed amount toward each. There are also some independent bodies which
offer grants to business school students. We've collected some of the key ones together, both
in the individual sections for the UK and USA, and in
MBA FUNDING RESOURCES
Specialist Loans
Your country will often have a loan scheme for business school students. This usually means
that you won't have to start paying back the money until after you graduate, and also that
you'll be paying less than market rates in interest. In some cases individual schools have
partnered with finance providers to offer a similar service to any student attending their
program, whichever country they are from (eg Harvard). In nearly all cases these loans do
not require any form of security.
General Loans
While the specialist loans should be considered first, there are other alternatives. If you
have equity in your home, this may be a cost effective way of raising money. Unsecured
loans (personal loans) or non-mortgage loans secured on your property usually have
significantly higher rates of interest than the other loans discussed here and should
usually only be considered as a last resort.
Employer Sponsorship
This sounds like the dream option. You get an MBA and someone else pays for it. But, yep, there are
drawbacks.
i) Many organisations are reluctant to sponsor full time courses. This is understandable as they
are probably only willing to front up the cash for their more impressive employees and a full
time course means they don't get the benefit of their skills for a year (or two). Some employers
who have a lot of experience in employing MBAs (such as the big consultancies) are wiling to
sponsor full time courses. Employers are usually more willing to fund (or part fund) part time
courses. These can take the form of evenings, block residential, distance learning, etc. We go
into more detail on these different types of courses in the Types of MBA section.
Probably the biggest fear of employers is that they pay for the course,
you finish your MBA and then wave goodbye as you get a job at double your previous salary with
new employer. Which brings us on to the next point.
ii) Lock ins. If an employer is wiling to sponsor you, they may stipulate that you have to work
for them for a number of years after you complete your degree. If the employer isn't as clued
up as they should be on all the new skills that you now (hopefully) have then you may find
yourself going back to a similar role, rather than the career step change you were looking for.
There are different opinions over whether lock in contracts are legally enforcable, they
probably aren't so it's really down to your own conscience (or lack of it).
iii) The "company" MBA. Some companies have developed their own company MBAs in conjunction
with a business school. This means they can give a broad management education, while also
developing particular skills or knowledge they view as being core to their business. This sounds,
and often is a great idea. The main potential drawback is the quality of the school chosen,
and therefore the perceived transferability of the MBA. Most of the schools that do this are
strong "national" schools, but are rarely the major internationals. Depending on what you hope
to gain from your MBA, this can be a great option or it lessen the value of your time and work
investment.
In addition to the financial contribution from your employer there is another major advantage,
which is that most employers, having invested in your MBA will also be more willing to
provide you with study time and be more understanding of study-work conflicts. This tends to
be especially true of company MBAs.
Work - Study
Some schools (mainly in the US) offer part time employment in work-study programs. These
don't offer huge amounts of cash, but may help to contribute to living expenses. If you have
the right experience, these can include teaching and research opportunities. If you don't
have that kind of experience, "d'ya want fries with that?"
Sign-on Bonuses
Many employers will give a sign-on bonus to new graduates with an MBA. The amount of the bonus
varies considerably by employer, starting salary and job function. These are, of course,
only available when you have graduated so are mainly a quick way to repay your loans rather
than a funding option (alternatively do what most people do and
blow the cash and pay back the loan in the normal time).
In-Company Consultancy
Many full time MBA programs have a period of paid consultancy with a company. The rates for
this are usually fairly good (several thousand dollars a month) and can provide a useful
cash boost mid-term. Even so the amount of cash realised means this is mainly a help with
living expenses rather than a major contribution to the overall cost.
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