How To Pay for an MBA: A Guide To Funding Your Business Education

Earning a Master of Business Administration (MBA) degree can be very expensive. For example, attending the Stanford Graduate School of Business in the 2024-25 school year costs $130,746, according to the school's website.

For many people, this is unaffordable without some help. This guide explains options to pay for an MBA so you can get the education you need to move forward in your business career.

Current private student loan rates

Best MBA student loans

Citizens Bank: Best for multi-year approval

ELFI: Best for flexible repayment

Sallie Mae: Best for specialized loans

Methodology

We evaluated these student loan lenders based on interest rates and origination fees, loan amounts, loan terms, discounts, whether cosigners are accepted, and more. Our team of experts gathered information from each lender's website, customer service department, directly from our partners, and via email support. Each data point was verified to make sure it was accurate and up to date. Read our full methodology for more details.

What are the main costs of an MBA?

When you earn an MBA, you must pay for your academic program as well as living expenses. Here are some of the main costs of earning a Master of Business Administration degree.

• Tuition: This is the largest cost for most students. For example, tuition for Harvard's MBA program costs $76,410 for the 2024-25 academic year.
• School fees: This can include course and program materials fees.
• Health insurance: Many MBA programs require you to pay for a student health insurance plan while you complete your program, even if you have alternative coverage.
• Living expenses: This includes housing, food, transportation, and other routine expenses you incur while you earn your degree.

These costs can add up to over $100,000 annually, depending on the school you attend. The more expensive your program and the higher your living expenses, the more you must pay - and the more you end up increasing your student loan balance if you need to borrow for school.

How can scholarships help fund your MBA?

Scholarships, fellowships, and grants all help you pay for your MBA degree while limiting your student debt. These sources of free funds don't have to be paid back. Scholarships and fellowships are typically based on academic merit, while grants are generally based on financial need.

There are many resources to find these free sources of money, including:

• Your school's financial aid office
• The Department of Labor's free scholarship search tool
• Your state's Department of Education
• Professional groups and organizations

Always start with your school's resources first, as many schools offer multiple scholarships and other funding opportunities for MBA students. For example, Johns Hopkins Carey Business School offers the Dean's Scholarship, the Johns Hopkins MBA GradAid Scholarship, the Carey Business Fellowship, and the Reaching Out MBA Fellowship, among others.

Start your scholarship search early, as most programs have a limited amount of money available. You may also need time to meet requirements to apply, such as providing proof of work experience.

What employer sponsorship options are available?

Employers sometimes sponsor workers to get an MBA if doing so helps the company achieve its long-term goals, improve problem-solving, or develop new skill sets. This employer assistance could take the form of:

• A full employer sponsorship: Your employer may cover your entire cost of tuition, and sometimes living expenses
• A partial sponsorship: Your employer might agree to pay a specific percentage of the costs of earning your MBA. Sometimes, these programs are performance-based, and academic achievement helps you unlock more financial assistance.
• Company-specific partnerships: A company may collaborate with a business school to create a customized MBA program tailored to its needs and then pay for you to attend.

Many big-name companies offer some type of tuition assistance for MBA programs, including Bank of America and Deloitte. If you're interested in employer sponsorship, research job listings to find employers offering this as a workplace benefit. If you're currently working for a company, ask what programs they have to provide support if you earn an advanced degree.

How do federal and private loans work for MBA students?

Often, students must borrow for their MBA because scholarships, grants, and fellowships don't provide all the necessary funds. You can explore both federal and private student loans if you need additional help paying for school.

Federal student loans for your MBA

The Department of Education offers two primary loan types to students earning an MBA degree:

• Direct Unsubsidized Loans: These are awarded to eligible students regardless of financial need. Your credit history and proof of income aren't required to qualify, so they are a good student loan option for bad credit. There are annual and lifetime limits and an origination fee, but interest rates are fixed and affordable.
• Graduate PLUS loans: Graduate students can also take out grad PLUS loans that cover up to the school-certified cost of attendance, minus other financial aid received. You can't qualify for these loans with adverse credit, though, and the interest rate and origination fee are higher than those of Direct Unsubsidized Loans. These loans are different from parent PLUS loans, which parents can take out for dependent undergrads.

To apply for either of these funding sources, you must complete your Free Application for Federal Student Aid (FAFSA). Try to submit your FAFSA as early as possible each year, as funds for some federal aid programs are limited.

In general, it's a good idea to turn to federal loans first before taking out any private student loans. To understand why maxing out federal loans is the smart choice, it's important to know the key differences between federal vs. private student loans. Federal student loans offer many unique benefits, including income-driven repayment plans, generous forbearance and deferment options, and access to loan forgiveness.

The downside, however, is that Direct Unsubsidized Loans have annual and lifetime limits, so they may not fully fund the cost of your degree. While graduate PLUS loans allow you to borrow up to the school-certified cost of attendance, they have an origination fee, while most private loans don't. Interest rates can also sometimes be higher for grad PLUS loans than private loan rates for borrowers with excellent credit.

Private student loans

Private student loans come from banks, credit unions, and online lenders rather than the government. Many lenders offer loans up to the school-certified cost of attendance.

You'll need to follow your individual lender's borrowing requirements to be eligible, though. Before you apply, be sure to get quotes from multiple lenders to find the best rates. Be aware that private student loan lenders check your credit score and typically require both good credit and proof of income for you to qualify.

Private student loans can sometimes have more affordable interest rates than grad PLUS loans, and most private lenders don't charge origination fees. Unfortunately, private student loan forgiveness is not on the table. You typically won't have access to income-driven repayment plans, and your deferment options are much more limited.

Unlike with federal student loans, which make changing your repayment plan simple, you also can't change your payoff terms easily with private student loans. To alter your payment schedule, you may need to research the best lenders for student loan refinancing and move forward with a refinance loan.

What alternative funding sources exist for MBA students?

In addition to these options, there are some other ways to pay for an MBA. Alternative funding solutions include the following:

• Federal work-study: If your school participates in this program and you demonstrate financial need, you may be able to work part-time on or off campus for a set amount of hours. You must apply for work-study each year, and funds are limited, so apply for financial aid via the FAFSA early if you're interested in this option.
• Part-time employment: Working part-time at any job while attending school can also help provide the funds you need to pay tuition and living expenses. Just be sure not to overcommit your time. Leave ample room in your schedule for courses and studying.

FAQ

What are the tax benefits of paying for an MBA?

It's sometimes possible to deduct MBA tuition or other costs as a business expense if you meet IRS requirements, including getting an education that maintains or improves skills needed at your current job. You may also be able to save by claiming the American opportunity tax credit or lifetime learning credit, or by deducting up to $2,500 in student loan interest per year. It's always best to consult with a tax professional, as tax rules can change and IRS regulations can be complicated.

Can part-time MBA students get financial aid?

There are scholarships, grants, fellowships, and loans available for part-time MBA students. Check with your school's financial aid office to find out the details about funding you can apply for.

What is the ROI of an MBA?

An MBA can accelerate your career, improve your earning potential, and help you develop professional connections. A Graduate Management Admission Council survey found that in 2021, MBA holders had average starting salaries of $115,000, compared to $65,000 for bachelor's degree holders.

How do I find MBA-specific scholarships?

Your school's financial aid office is the best resource for finding MBA-specific scholarships. They can help you find programs available through your school, as well as through local and national organizations.