Earning an MBA degree is a lifetime achievement since it can take your career and even business to the next level. The skills you’ll learn from a master’s in business administration are worth every effort. Not only will you boost your competitive advantage in the job market, but you will also build better networks and enhance your leadership skills.
Investing in your education comes with greater rewards, but sourcing the finances to fund an MBA program is a huge challenge for many people. Below, we have rounded up four main ways you can consider when choosing a financing option for your MBA degree.
1. Find MBA Scholarships, Grants, and Fellowships
MBA scholarships, grants, and fellowships are everywhere, but very few students qualify for it since they are ofren competitive. Each of these financing programs varies. For instance, unlike scholarships and grants, fellowships are purely merit-based and usually awarded by the business school itself. Qualifications are often based on GPA and GMAT scores and other relevant professional accomplishments.
Some business schools award fellowships automatically to qualifying students, while others accept applications but only pick eligible ones. On the other hand, scholarships and grants are often flexible and could be based purely on merits or financial need or a balance of the two.
Need-based grants and scholarships are awarded according to the students’ financial situation. They are often offered to promote diversity and inclusion and ensure those from poor backgrounds get access to higher learning. A special committee usually awards merit-based scholarships and grants within the admissions department, based on the candidates’ application and metrics around a demonstrated promise, regardless of their financial conditions.
Whether you choose to pursue your MBA from a business school or online tutoring sites, you can always qualify for merit or need-based grants and scholarships. The financial aid you get may or may not cover full expenses.
2. Consider MBA Student Loans
There are different types of student loans available for MBA students. Most come with varying interest rates, while others are forgiveness loans written off after completing the master’s degree. The latter is available for specific students and is often supported by very few business schools.
Before considering this option, you always want to understand the implications of taking the loan. If the loan comes with interest, you want to think of it as an investment or business loan that must earn profit to be reasonable. That means you should have a loan repayment strategy and even a contingency plan if things don’t go as planned.
Just like startups raise capital through bank loans and venture capitalists, you can approach banks, finance companies, and even government institutions to help fund your MBA. International students, for instance, can apply for collateral-free MBA loans from organizations such as Future Finance or Prodigy Finance, where they are required to begin repaying the loan six or more months after completing the course.
3. Leverage Employer Sponsorship
Depending on where you work and the available employee incentives programs, you may qualify for employer sponsorship. Most employers will offer eligible workers a one or two-year sabbatical accompanied by financial aid. This type of sponsorship often varies from one company or employer to another. Some will only cover tuition fees, while others will pay for everything, including accommodation and upkeep.
However, company sponsorship is often granted based on merit and a clearly-demonstrated benefit for the employer. For instance, you may qualify for an employer sponsorship to study an MBA if you have shown some leadership skills and a proven track record in your current role.
You will then be required to complete the MBA program and come back to work for the employer at some agreed-upon terms. This can be a great way to further your career goals without necessarily investing a lot of money into your education.
4. Personal Savings and Crowdfunding
If all the above funding sources are not an option, you could choose to dig deep into your savings or pull together resources from colleagues, friends, and family. Students with enough resources tend to prefer funding their education. This is because MBA loans come with huge interests and some sponsorships come with several restrictions, plus you may not qualify for your target business school.
Besides using your savings, you can have your friends and family contribute to tuition or other expenses. You can do this locally by sensitizing a group of people to push the crowdfunding campaign or choosing to use sites such as Crowdfunder and GoFundMe.
Self-funding students may choose to pay the annual tuition fee in installments or at the start of the year. The former allows you time to source more funds as you study, plus it helps with budgeting. If you are somewhere in your entrepreneurial journey and believe an MBA is a requirement to achieve your goals, using your savings to finance, your MBA is a risk worth taking.
Evaluating Your Options
Before considering the many MBA financing options, perhaps you would want to evaluate the need for an MBA degree. You may ask, why study an MBA? Answering this question may help you understand your unique needs so you can choose a financing method that works for you.
For instance, an employer financing option will work best if you wish to rise up the ranks and stay with your employer long-term. Scholarships, fellowships, and grants will make a lot more sense if you meet the minimum merit and financial status requirements. On the other hand, MBA loans will work if you have a strategy for repaying the amount; otherwise, you should consider using part of your savings or crowdfunding.
Whether you want an MBA degree to boost your competitiveness in the market or enhance your business and entrepreneurial skills, planning your source of financing is always a priority. Not all the options highlighted above will work for your unique situations. Always compare and contrast and choose one that will serve you best, now and in the foreseeable future.