5 Ways to Finance your MBA Education
Explore several financial options to come up with a sound plan for affording your MBA—and accomplishing your personal and professional goals.
If you’ve made the decision to pursue an MBA, you’re probably familiar with what kind of return on investment it can offer.
The ROI of an MBA encompasses your skill set, confidence, career trajectory and, quite strikingly, how much you can earn. One survey from US News & World Report found that the average salary plus bonus for full-time MBA graduates was approximately $107,000. The number increased to nearly $174,000 for those at more selective programs.
Of course, the first step toward investing in your future will bring up questions surrounding affordability. And while this is a typical concern, you have options like financial aid that can reduce the total cost of an MBA and give you the flexibility you need to pursue your goals.
Aid is more common than you might think. At Baylor University, more than 75 percent of full-time MBA students receive financial awards in the form of Graduate Tuition Scholarships. Financial assistance is available in other forms, too, like those in the following section.
5 Ways to Finance Your MBA
Here are some of the best financial aid and funding options for your MBA degree.
1. Apply for Scholarships
Scholarships can significantly reduce your MBA tuition costs, and that’s certainly a highlight at Baylor. Full-time tuition scholarships range from 25-100 percent tuition remission. They’re awarded based on work experience, GMAT/GRE score and academic record.
You don’t have to worry about applying separately to be considered for one at Baylor. When you receive your admission decision, you’ll be notified of any scholarship offer at the same time. Both US citizens and international applicants are considered equally for tuition scholarships.
Other MBA students at Baylor have a wide range of scholarship options. In the online MBA and the two Executive MBA programs options—including the EMBA Dallas and the EMBA Austin programs—scholarships are awarded based on academic merit, military service, international managerial experience and affiliate partnerships.
2. Check With Your Employer
You may be surprised to learn that 92 percent of U.S. organizations offer some type of educational benefit, according to a survey from the International Foundation of Employee Benefit Plans. However, they’re highly underutilized.
A report from Inside Higher Ed estimated that only 2-5 percent of employees use tuition reimbursement plans—a type of benefit where employees pay tuition upfront, meet certain requirements (like a GPA minimum and relevant coursework) and employers pay them back later. Other forms of educational benefits include tuition assistance (company pays upfront) and employer-sponsored scholarships.
These types of programs are truly a win-win for both sides. Companies can attract new talent, develop current employees, reduce turnover and boost morale, while employees save money on something that can transform their lives. Plus, there are tax benefits. Employers can take $5,250 per year, per employee as a tax deduction, and employees can receive up to that amount every year free of federal income tax.
Check with your manager or HR department to see if your company offers an educational benefit. If so, make sure you understand how it works, such as when funds are dispersed and what conditions you must meet to receive and keep the funds. If not, you can advocate for one.
Express the benefits of a tuition benefit for the company and emphasize how it can enhance your impact to the organization. Keep in mind that while it might not be the best time for your company to implement one, you might be able to secure some funding for yourself. For instance, if you have access to resources to attend industry conferences, you could persuade your organization to allow you to use those funds for your MBA.
3. Consider Federal and Private Loans
Various educational loans can provide you with some financial flexibility. If you consider them to help finance your education, there are two types of federal loans to consider as an MBA student.
• Direct Unsubsidized Loans: These loans aren’t based on financial aid and they accrue interest immediately. The current origination fee is 1.057 percent for loans disbursed between October 1, 2020 and October 1, 2021. The current (fixed) interest rate is 5.28 percent for loans disbursed between July 1, 2021 and July 1, 2022.
• Direct PLUS Loans: Also referred to as Grad PLUS loans (when made to a graduate/professional student instead of a parent), these loans are designed to pay for expenses not covered by other financial aid. They’re not based on financial aid, but a credit check is required. They accrue interest immediately. The loan fee is currently 4.228 percent for loans disbursed between October 1, 2020 and October 1, 2021. The current (fixed) interest rate is 6.28 percent for loans disbursed between July 1, 2021 and July 1, 2022.
Private loans are another option. It’s true that they’re not typically a strong choice for a lot of students—especially undergrads—but things change at this level. As an MBA student, you may already have a salary and a household budget that can handle student loan payments. Or, if you’re still early in your career, the caliber of the degree can give you confidence in your earnings once you graduate. (At Baylor, early-career graduates have a starting salary of $78,000+ after earning their MBA.)
You may be able to secure a private loan with a much better rate than what undergraduate students can hope for, given factors like your credit history, work history and financial situation. It may be quite a bit lower than the federal loans available to you. That’s especially the case for variable rate loans that can increase or decrease in interest based on market trends (a good option if you play on repaying it back as quickly as possible). Also, most private lenders don’t charge origination fees.
4. Look Into Assistantships and Work-Study Opportunities
For full-time students, there are several graduate assistant positions available for MBA students at Baylor. The role entails working for a faculty or staff member in the Hankamer School of Business for an average of 10 hours per week. If you’re interested in a position, you will be asked if you want to work as a graduate assistant when your application is approved. Positions are awarded in the order requests are received.
A similar option, federal work-study opportunities, also provide a part-time employment opportunity. Work-study eligibility is based on financial need beyond the amount of scholarships, grants and other forms of aid.
5. Put These (and Other) Ideas Together—With Expert Help
You can finance your MBA using additional ideas like grants and existing savings. But remember that all of these ideas can work together to form a cohesive financial plan for achieving your goals.
The critical point is that you won’t get a full picture of your options until you apply. Once your MBA application is approved at Baylor, you’ll be notified of any scholarship offer and asked if you want to work as a graduate assistant. You can then apply for financial aid. Baylor University Student Financial Services will work with you to determine your eligibility for grants, loans and work-study programs.
Once you take the first step toward pursuing your MBA, you’ll have a clearer understanding of the aid available to you and what you’ll need to advance your education.
Is an MBA in your future? To learn more about the Master of Business Administration offered at Baylor’s Hankamer School of Business, explore our detailed program page. Still have questions? Our admissions advisers can help you determine the best path forward. Complete the form below and our team will contact you directly.