No one would dispute that the MBA is a costly challenge. The good news is that there are plenty of possibilities when it comes to funding the total bill: personal savings, parental support, bank loans, special funds, corporate sponsorships and, of course, scholarships. The opportunities are there and you should just find and grab the best one for you.
Financial matters remain among the most important topics on the mind of MBA applicants. In 2015, prospective students expected to fund their degree in a variety of ways. Twenty-six percent of them planned to do it via a combination of grants, fellowships, and scholarships and 20% said it would have been loans, according to the 2016 Prospective Students Survey by the Graduate Management Admission Council (GMAC). The third most often expected source of income would be parental support (19%), followed by personal savings (12%), and personal income (11%). The group of the 8% who relied on employer sponsorship/reimbursement is followed by the ones relying on spouse/partner earnings and other form of funding (2% each).
Interestingly, though hardly surprisingly, the survey found that the Baby Boomers and Generation Xers were more likely to rely on personal savings, earnings, and employer support, in contrast with Millennials and Generation Zers, who would be more dependent on the support of their parents.
The use of grants, fellowships, scholarships, and loans has declined globally, and these sources are expected to make up less of the prospective student's total financial package. Increased reliance on personal earnings, savings, parental support, and employer assistance seem to be making up for these decreases.
If you have made up your mind that the MBA is what you really want, then be ready to face the financial question. Start preparing for it along with your preparation for the whole application process. As there are many things that should be taken into consideration, some would even advise you to start preparations earlier. The whole MBA experience could cost additional tens of thousands beyond tuition in GMAT preparation fees, application fees, equipment, books, and travel fees.
For that reason, as with any investment, a sound plan is very important. Financing the investment definitely depends on whether you choose a full-time or a part-time degree. Usually, the part-time MBA costs less than the full-time one. From the other perspective, the full-time MBA degree takes about two years and consumes all of the student's time. This makes the working-while-studying combination impossible. Hence, the student could rely on a scholarship or a loan rather than on his/her own earnings or getting a sponsorship from his/her employer. In contrast, the part-time degree is longer in time but it usually eases the financial situation as students work generally during their studies. This makes them more likely to finance the degree with their own funds or to secure corporate sponsorships.
Personal finances and parental support
The less costly funding option for your MBA degree is to have the cash you need in your own pocket. It could be earnings, savings or just calling your parents and asking for their financial support. Having the money will save you the exhausting visits to banks or other financial institutions or efforts to convince your employer to finance your degree. It will save you the interest rates and any additional agreements you might need to sign with your boss in return for the corporate money he might give you. However, few are lucky to have the needed cash available in their bank accounts. The good news is that there are many other options available on the market.
Bank loans and other loan programmes
Bank loans and other loan programmes offered by various financial institutions have been a traditional source of financing one's degree. Many banks have special soft-term student loans offered particularly to finance different studies. Banks know your credit history and they can best assess your credit worthiness. Apart from lending organisations such as banks and special funds, business schools have developed their own loan schemes offered in cooperation with financial organisations. The Prodigy Loan programme is one of these schemes. It is a programme offered by London-based Prodigy Finance and provides a platform for alumni and other community stakeholders to offer funding to students while earning a commercial rate of return.
Scholarships and fellowships
Most of the business schools have their own scholarship policies in which they set their particular criteria for awarding scholarships. In general, scholarships are extended to exceptionally able, talented, and high-potential candidates. The schools' criteria range is very wide – merit, experience, nationality, entrepreneurship, gender, etc.
Some schools extend scholarships to a limited number of students (three to ten) while at some schools this number is bigger. At some schools, the number of MBA students receiving scholarships can reach up to 80% of all students. There are fixed-amount scholarships, full scholarships or partial scholarships that cover between 10% and 90% of the tuition fees. Apart from the scholarship, some schools even provide for the costs of living.
Access MBA Endorsed Scholarships
Talented MBA applicants can apply for over EUR 1 million of the Access MBA Endorsed Scholarships for top international business schools. All applicants are welcome to submit their CV for an in-depth evaluation by an Access MBA Reach expert to ascertain whether they meet the requirements for admission and for scholarship application for their selected MBA programme. Experts provide advice on the applicants' strengths and weaknesses for a scholarship application. A letter of scholarship endorsement is sent from Access MBA Reach to the selected MBAs for the qualified applicants.
Some corporate sponsorships are available under special deals between business schools and their corporate sponsors which provide a limited number of scholarships to students. These scholarships are partial and normally cover 25% or 50% of the tuition fee.
Apart from this, many companies have an institutionalised tuition assistance programme in their corporate policies. The employer provides part of the financing while the employee should commit in return. The high cost of tuition along with concerns of employee flight upon graduation serve as chief barriers for corporate financial sponsorship. Each company determines the level of commitment and the return that it wants through a formal retention mechanism.
Before seeking tuition reimbursement, it is incumbent upon you to review the corporate policy. Three factors are critical when seeking corporate sponsorship. First, become thoroughly familiar with the benefits policies as written, particularly with regard to what is explicitly excluded. Second, get a good understanding of the degree of flexibility written into the policy to accommodate a variety of programmes and circumstances. Third, and perhaps the most critical, stay sensitive to the personalities of those managers from whom you need support and approval. You will need at least one manager to be your advocate.
It is solely up to you to convince your boss that you deserve the sponsorship because of your current value for the company and mostly because of the value you will add to the corporate business with an MBA in hand.
It may be difficult to secure the finances for your MBA degree. However, it is a worthwhile investment that pays back in a short period of time. Don't allow the financial question to stop you from achieving your dream.