Planning. That’s the most important thing when it comes to financing your MBA. And it should include both the time while you are studying, and afterwards. For better or worse, the price of quality business degrees is one of the few things the crisis didn’t affect.

Own funds or loan

There are a couple of ways to pay the bill for your MBA. The best, of course, is if you can rely on your family for support or can use personal savings. This leaves much more freedom for you in the future, without debts and no interest instalments to pay. But not everyone has that luxury. Most people rely on loans to at least partially finance their studies.

Currently, according to the Financial Times 2016 rankings, the cost of the first three programmes per year stands at an average of USD 81,750. And that sum doesn’t cover expenses for rent, food, books, and other student necessities. For quite a long time it has been our belief that rankings shouldn’t be perceived as the ultimate truth – all schools in the top 100 are good enough. So, if you find the price of the first top schools too high, it is OK to choose a more affordable place.

Having a clear picture of your financial opportunities could prove to be very healthy in the longer run. There’s nothing wrong in being financially conservative, as loading yourself with too much debt too early in life may not be the wisest step you can make. At the same time, applying for a loan shouldn’t be dismissed if you need one, as long as you try to stick to your post-graduation plans and systematically bank on the investment in your graduate diploma.

Government sources and banks

There are a number of loan funds that you can use to finance your MBA studies. You can either get a government-funded or a privately-funded loan. American universities work with federal loans such as the Federal Direct and Direct Grad Plus, for which the US Department of Education lends the money. These options are available only for American citizens and eligible non-citizens (US national, permanent resident, green card holder, etc.).

The interest for the direct unsubsidised loans is fixed at 5.84%, the direct Plus loans at 6.84%, and the Perkins loans bear 5% interest. The rates are all set by the US Congress. Additionally, there are other loans designed for international students.

Check the options in your home country

Loans can be nationality-based, and you should start your research of the possibilities available in your country for financing your education early on. German students, for example, can borrow up to EUR 25,000 from the private company Deutsche Bilgung. Applicants from Germany, Austria, and Switzerland can rely on the help of Career Concept AG, a company that lends money for tuition fees and living expenses for the period of study.

An interesting opportunity for international students is Prodigy Finance. This is a private investment platform designed for financing MBA and EMBA programmes in leading business schools around the world. The 2007-founded institution has so far financed 4,000 students from 115 nationalities. Some schools work with certain banks and other lenders to help prospective students finance their studies. Wharton, for instance, offers non-US citizens loans from The Quorum Federal Credit Union, that lends up to 80% of the student’s budget for the two-year MBA programme.

Some banks may grant you favourable conditions, if they know you have been enrolled at a reputable school. They believe it is highly unlikely that someone with an MBA from Stanford University (US) or INSEAD (France), for instance, could be without work for too long.

On the whole, the opportunities for affordable loans dwindled after the crisis. But investment in good education continues to pay off. However, this is a deal that could be long-term and reaping the benefits may be delayed in time. If you have the opportunity, pay off some of your debts before applying for a loan at the bank. This would improve your credit rating and make you a more attractive borrower.

Working while studying

Another way of paying for your degree is by studying part-time and simultaneously working. This is attractive for professionals, not just because of the more affordable fees but also because one doesn’t have to entirely withdraw from professional life and its rhythm. Working and studying at the same time also diminishes the opportunity cost of the MBA. However, it can be hard to find the right balance with your personal life. Also on the downside is the longer duration of a part-time MBA – in Europe it takes two to three years, and in the US it could go on for as much as four years.

Choosing the part-time, executive, online, and other untraditional MBA formats could substantially reduce the cost of your study. Between a full-time programme that costs USD 40,000 and a part-time one that comes at a price of USD 60,000, with all other circumstances being equal, the latter actually is less expensive. The reason is that the full-time option, most often, requires you to leave your job. And by going for the part-time MBA you could keep your job and still be making money while studying. That takes some significant financial weight off your shoulders. Also, keep in mind that competition for the part-time MBA programmes is less intense than for the full-time option.

The price of a programme should not scare you if the school is good, has prestige, and is properly accredited. A more expensive school could open the doors to a better job and a higher salary. For instance, if you attend one of the top 25 US programmes, according to Forbes, the time for payback would be four years on average. The Forbes rankings are perhaps the most appropriate example, as they measure ROI five years after graduation.

Scholarships, grants, and other means

The other popular form of financing your MBA is by scholarships. These can also be nationality-based. Most schools recommend that students carefully research the government funding. The awards from schools usually depend either on the merits of the candidates, or on their needs.

The INSEAD Alumni Fund Diversity Scholarships are awarded to several candidates per class who experience difficulties in finding sufficient funds. Preference is given to residents of developing countries.

Columbia’s Feldberg Fellowship is a merit-based award – it is given to students with leadership potential and academic excellence. The full tuition award goes to students who have proven excellence in entrepreneurship, finance, military, and social enterprise.

In some cases, the country in which the school is based subsidises foreign students. Such is the case with the VRIKA Scholarships, offered by the French Embassy in Greece – they are designed for Greek students, studying in France.

And then there are also the grants from NGOs. An interesting type is the gender-based funding, so if you are a woman, don’t forget to look for this option. The Forte Foundation is one of the organisations that have scholarships for female MBA candidates. Some minorities are also targeted. The Consortium for Graduate Study in Management has MBA fellowships for African Americans, Native Americans, and Hispanic Americans in the United States.

But MBA students can also receive sponsorship from their employer. This depends on the match between your career goals and those of your company, so this option is for negotiation with the superiors. Usually, if the firm is to pay for the business degree, both parties sign a contract requiring long-term commitment from the employee after graduation. That means he/she is required to stay in the company a certain number of years upon graduation. And the standard is that there is a clause in the contract demanding a payback of the study fees (and possibly other expenses paid by the employer), if this condition is not met.

But whatever your plan is and whatever calculations you make, keep in mind life cannot be entirely predicted. You depend not only on the steps you planned in advance, your hard work, and good intentions; you also depend on the occasional ups and downs of the economy, personal circumstances that are difficult to predict, and other volatile variables that are hard to factor into the equation upfront. So, if possible, try to leave a comfortable financial cushion for some time after your graduation.

Regions Loans available to MBA applicants by country Scholarships available to MBA applicants by country
USA Federal Direct Stafford Loan - 5.41% interest rate Mostly school-specific and based on need and merit
  Federal Direct PLUS Loan - 6.41% Fulbright
  William D. Ford Direct Loan Programme Free application for Federal Student Aid
  Fixed SoFi loan – from 4.99% - 6.74% APR* Companies, private donors and NGOs provide many of the awards
United Kingdom Professional Career and Development Loan – 9.9% Mostly school-specific and based on need and merit
    British Council
    Commonwealth Scholarships and Fellowship Plan
    Department for International Development (DFID) Shared Scholarship Scheme
France FONGECIF mostly school-specific and merit and need-based scholarships
  BRED Grandes Ecoles FONGECIF, Conseil Regional
  Caisse d’Allocations Familiales (CAF) Housing Allowance Fund OPCA
    the Eiffel Scholarship programme
    the French Embassy scholarships
    Campus France
Russia Rosinterbank Russian Government Scholarship
  Gazprombank (Open Joint-Stocking Company) The Agency for Strategic Initiatives
  Sberbank of Russia (Open Joint-Stocking Company) ExxonMobil Russian Scholars Programme
  VTB24 (ZAO) Skolkovo Tech Student Fellows Programme
  Rosselkhozbank Presidential grants
India IDBI – 11.25% Aga Khan Foundation ​
  Bank of Maharashtra – 12% Fulbright programme
  Indian Overseas Bank (IOB) – 12% Stanford Reliance Dhirubhai Fellowship
  Canara Bank – 12.45% Henley Business Scholarships
  Bank of Baroda (BOB) – 12.75% Scholarships for MBA Students in India
  State Bank of India (SBI) – 13.5% FedBank Hormis Memorial Foundation Scholarships
  Punjab National Bank (PNB) – 13.75% Aditya Birla Scholarships for IIT
  Credila IOCL scholarships
    BPCL Scholarships
  *annual percentage rate  
  **percentage rates are subject to change  
Loans available to International Students Scholarships available to International Students
Prodigy finance - representative APR is 9.05% (variable), ranging from 6.5% to 12% Nottingham Developing Solutions Scholarships
The Paras Education Foundation – interest rates between 7% and 9% Bocconi Scholarships in Italy for International Students
Global Student Loan Corporation (GSLC) MasterCard Foundation Scholarship Programme for Africans
International Student Loan Programme (ISLP) and Study Abroad Loan Progamme (SALP) INSEAD-Syngenta MBA Scholarships for Developing Country Leaders
TERI Professional Education Plan (PEP) Fondation Rainbow Bridge MBA Scholarships for African and Asian Women
  INSEAD Nelson Mandela MBA Scholarships for Africans
  Radboud Scholarship Programme
  IEDC Executive MBA Scholarships
  Erasmus Mundus Scholarships for Developing Countries
  HEC-Eiffel Scholarships in MBA for Developing Countries
  Nestle MBA Scholarships for Women from Developing Countries
  IMD Future Leaders MBA Scholarships
  Nottingham University Business School Scholarships
  MBA Scholarships for Africans at Hult International Business School
  MBA Diversity Scholarships at ESADE Business School