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How do you fund your MBA education?

Diligent research will pay off your efforts, from loans and scholarships to savings and sponsorship.

Achieving an MBA can be an empowering experience; However, it comes at a cost. Fees for tuition, accommodation, food and small living expenses can add as high as PS100,000 per year for a student attending an elite business school. Even at lesser-cost institutions, the cost of tuition alone could be up to around PS50,000 in the case of an MBA.

Many of the MBA students report a positive return on investment. However, according to Emily Brierley, the MBA requires meticulous financial planning, head of MBA admissions, and Cambridge Judge Business School recruitment.

“It’s an essential part of the MBA preparation. Also, it’s an investment into your future. So think in the long run, not just the first day of your position,” she advises.

There are various funding sources students can utilize to fund their education, and they can mix savings from personal savings, partial or full-tuition scholarships, corporate sponsorships, and loans. “We recommend to students that they consider how they will fund their studies before applying — and should their scholarship application be unsuccessful,” states Ashley Potter, a spokesperson for Warwick Business School in the UK.

Suppose prospective students are planning to pursue a degree abroad. In that case, suggests Jan Hohberger, associate dean for the full-time MBA at Esade in Spain, should first look into the funding options in their country before investigating the ones offered by host universities and business schools. He advises utilizing the schools’ financial aid offices and attempting to get in touch with students and alumni currently studying. “They’ll be able to explain their experience, guide you through some of the processes and give handy tips.”

Scholarships

Schools usually offer three kinds of competitive, merit-based, and need-based scholarships. The first one can be granted after a competitive application process. In the United States, Virginia’s Darden School of Business, for instance, offers seven competitive scholarship programs.

“They are made to recognize MBA prospects who demonstrate outstanding academic achievement, professional accomplishments, and large assurance as responsible leaders with the potential to subscribe to the living of the Darden neighborhood and the world at large,” states Whitney Kestner, Darden’s senior director of admissions.

Merit-based scholarships are granted by a committee, typically in the admissions department, under the student’s application along with parameters and the merits they exhibit no matter their economic situation.

Need-based scholarships and grants are given based on the student’s financial status and are typically offered in the hope of encouraging diversity. Applications should be submitted upon admission to the program.

Deadlines for scholarship applications are often different from the deadlines for the program. According to Liam Kilby, associate director for MBA admissions and recruitment at Oxford University’s Said Business School, this requires well-planned time management. “It’s also important to research the application requirements for each funding option,” Kilby adds. “Is the essay component or an additional requirement that isn’t required for admission to the program? Do they conduct interviews to determine the scholarship? If this is the case, when did they take place?”

The majority of applicants are automatically eligible to apply to most programs at the college; however, it’s worth conducting some study to determine which options might “need that extra level of effort to meet all of the application requirements,” Kilby claims. Kilby.

The collegiate system in particular universities, including Oxford, could provide additional funding options. Several Oxford colleges offer scholarships to new MBA students, in addition to the ones provided by Said; however, applicants must be competing against students with other specializations.

Loans

Most students finance their MBA either in part or entirely, through the help of a student loan company. Companies like Prodigy, Future Finance, and Lendwise are specialized in education loans; however, repayment terms and rates of interest vary. They include banks, finance companies, and even government agencies that lend to citizens of a particular nation and others working across different regions.

Kilby. “If you know in advance you’ll need some financial support from this type of source, it’s imperative to initiate conversations with them early,” Kilby advises. Many schools aren’t keen to advertise specific lenders, but admissions staff will provide general suggestions.

Sponsorship by the employer

Employers entirely or partially support some students. However, sponsorship could mean that employers allow students to take a one or two-year sabbatical. Some employers also provide financial aid. Warwick Business School, for instance, provides students with comprehensive guidance on creating a business case for sponsorship and on how to show the advantages for their employer.

According to Kilby, the number of companies that sponsor MBA applicants who are applying for Oxford: Said has increased over the last few years. “If your career plan involves returning to your existing company, it’s definitely worth having a conversation with them,” Kilby 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 to be awarded financial sponsorship from their company.”

Personal savings

MBA students’ experience and age profile mean that many have had the opportunity to save money before applying to business school.

Kilby. “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,” Kilby says. In Oxford, it is said that the typical MBA student is around 29 years old and has been working full-time for five years before registering. “Along with potential financial support from family and friends, savings can go a long way to help you attend your target school,” Kilby says.

Self-funded students pay their annual tuition at the beginning of each year, or they can pay the fee in installments as Potter of Warwick Business School –, and even though this won’t alter the price, it does assist in budgeting.

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