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BusinessBecause MBA Funding Guide
BusinessBecause MBA Funding Guide
Your MBA
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A BusinessBecause Guide
Funding Your MBA
A BusinessBecause Guide
Crowdfunding .......................................................................... 8
Despite the huge ROI, the initial sticker shock of business school tuition can
discourage some applicants from applying. The good news is that there are many
funding opportunities that are available to MBA applicants. Unlike other graduate
degree programs, MBA programs offer some of the most substantial scholarship and
financial awards available to both international and non-international applicants.
Investing early in research and identifying generous financial awards can give
applicants significant advantage in securing scholarships for their MBA studies.
Getting your financial house in order is key. Once you have decided to apply to
business school, you should immediately begin to aggressively pay down your debt
and keep a budget to save as much money as you can.
Applicants should also work hard to create the strongest application possible, so that
they have the best chance to receive merit-based awards. Begin by taking the time to
prepare effectively for the GMAT or GRE. A top test score can help make your
application much more competitive for merit scholarships. Also, business school
essays that are insightful and compelling, combined with strong recommendation
letters, will go a long way toward helping to convince the admissions board to award
you the scholarship or fellowship you are targeting.
Being proactive in your business school scholarship search can be the difference
between graduating from b-school with a ton of debt, or with little to none. However,
doing so will require humility, finesse, and insight into the schools financial aid
strategy.
This guide will help you efficiently research the best financing options for you and the
information will help you apply successfully for
financial aid at your dream school.
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7 ways to fund
your MBA
1. Self-Funding And Savings
Lets start with the simplest method of paying for your MBA, self-funding. As the
name suggests this requires candidates to cover the hefty costs of their education
themselves through one or a mix of savings, part-time work, the Bank of Mum and
Dad or even generous friends.
Even if youre not planning on funding your MBA with this method, its likely that
living costs will eat into your savings at some point when studying so its advisable to
put money aside well in advance of starting an MBA.
Utilizing this approach to cover tuition fees is typically only available to a lucky few,
but can be treated as an investment for those who are running their own company or
have entrepreneurial desires. The money invested will help you to hone new skills,
make connections and gain qualifications that will hopefully propel your career to
new heights on graduation.
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2. Bank Loans
A traditional source of funding for business education. In much the same way that
self-funding can be seen as an investment, banks see a business education loan as an
investment that will give a good return due to the high wages of MBA grads.
The availability of specialized bank loans has decreased in recent years however, and
high interest rates can be an issue. Banks also tend to be reluctant to lend
internationally, which means it is normally just an option for native students.
Some students have also reported that repayment plans can force their hands in
terms of securing a job on graduation, which can reduce the freedom to take risks and
pursue a dream career.
In addition to banks, the majority of MBA programs provide loans for students,
regardless of their country of origin. Applicants should consider this when researching
the schools where they plan to apply, in order to ensure that there are loan providers
available to them and to determine the loan criteria that they need to meet.
Make sure youve checked all the ins and outs of a particular bank loan before you
take one out.
The Professional and Career Development Loan from the Coop bank offers students
between 300 and 10000 to improve their career prospects. This is the only bank
still offering this loan in the UK: http://www.co-operativebank.co.uk/loans/career-
development-loan
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3. Scholarships, Fellowships, Grants And
Financial Aid
According to the Graduate Management Admission Council (GMAC), this is the most
popular method of funding sought by students today. Were assuming that the fact
most of them dont require repayment has something to do with it!
The popularity of financial aid means fierce competition however, and in order to
secure one you have to stand out from the crowd with it often being beneficial to
apply early with certain financial aid packages offered to early round applicants. To
secure this funding youll need to be a particularly good fit with a schools ethos and
values and demonstrate that you will be strong alumni.
Scholarships and fellowships typically fall into two categories: need-based and merit-
based with many of the top MBAs offering merit-based fellowships as a method of
attracting top talent.
If you can make a strong case for a scholarship or fellowship, the freedom from
repayment puts grads in a strong position without a large financial burden. Different
schools have a wide diversity of schemes ranging from Womens Scholarships to
Scholarships for Military Veterans.
Have a look at your target schools to discover what schemes are available.
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Hult: Global Citizen Scholarship Hult seeks individuals with a
global mindset who have the ability to bring professionals,
business ideas, and cultures together. They want candidates who
aim to bring down cultural walls and collaborate both inside the
classroom and the workplace and outside. This is a $10,000 award.
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4. Crowdfunding
Once just a method of fund raising for Indie game and film-makers and trendy start-
ups, crowdfunding has grown in popularity as an MBA funding avenue. It takes
minutes to setup and there are established platforms out there for peer-to-peer
lending such as CommonBond and SoFi.
The catch with many is that they are only available for US citizens or permanent
residents and require you to be attending one of a select number of top schools.
Even if you are eligible for funding youll need to have a good story and a clear
business development strategy to drive potential investors interest in funding you.
Crowdfunding websites:
Kickstarter - https://www.kickstarter.com/
Indegogo - https://www.indiegogo.com/
Peerbackers - http://peerbackers.com/
Gofundme - https://www.gofundme.com
Rockethub - https://www.rockethub.com/
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5. Prodigy Finance
Sitting in the middle ground between crowdfunding and a loan, Prodigy Finance was
set up by three INSEAD grads whod experienced the difficulties of international
funding first-hand.
The company operates through a listed bond program where investors buy a stake in
an asset-backed bond, supporting a group of students, rather than offering credit to
individual borrowers.
While many crowdfunding platforms require you to be resident in the US, Prodigy
Finances model breaks from the norm and is able to offer funding assistance to those
in the trickiest situation.
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6. Company Sponsorship
Some companies will provide funding to further education on the caveat that you
commit to return after your studies, but this is another form of funding thats become
harder to secure in recent years.
If you can provide a strong case to your employer of the benefits of further education,
through improved performance or mentorship capability etc., then it is a simpler
funding method than some of the others listed.
Its not recommended for those seeking an MBA in order to change careers or
industries as leaving a sponsoring employer often comes with the penalty of having to
pay back the sponsorship in full.
GMACs latest prospective students survey revealed that the MBAs who received the
most company sponsorship were more likely to stay with their employer after
graduation, so its really in companies interest to make this funding more readily
available.
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7. Government Aid
Different countries offer different forms of government loans for higher education.
In the UK, Masters loans are available of up to 10,000 with no obligation for this to
be spent on fees. While this wont cover the average costs of an MBA program, it
doesnt need to be repaid until you are earning in excess of 21,000 with repayments
arranged as a percentage of your income.
The US government also offers loans for further education. Federal loans, in the form
of Stafford Loans and Grad PLUS Loans, can cover the entire cost of potential students
MBA fees, but have more intense repayment schemes than the UK equivalent
depending on which you go for you can expect to be paying interest on the loan while
you study.
As with bank loans, its vital to read all of the terms and conditions before applying for
one of these forms of funding.
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MBA Funding
Advice From
Three Top
Business Schools
https://www.linkedin.com/school/14457?pathWildcard=14457
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https://goo.gl/KTrZcY
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https://www.linkedin.com/school/2151?pathWildcard=2151
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http://www.ie.edu/business-school/the-school/campus/
IE Business School
By Beatriz Prez Olmos Associate Director of Financial Aid
Cost: $77,000 Finally student loans are a great source of financing since
financial institutions offer a wide range of repayment
Prodigy Finance partner options and conditions.
school
In order to cover the remaining cost of tuition students
often turn to other means such as IE scholarships, external
scholarships from local foundations or other organizations,
or government aid.
These are just a few of the many options our students have
utilized to fund their MBA program. The Financial Aid
Department of IE is always available to talk to students
about their options and provide support in order for them
to create a sensible financial plan adapted to their different
circumstances.
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The Business School Voice