Personal Finance

How To Pay for Your MBA

This article is sponsored by Juno

Pursuing an MBA can be a highly rewarding decision professionally, socially, and financially. But it isn’t cheap! 

Affordability is top of mind for many potential applicants. Luckily, there are many ways you can reduce the cost of getting your degree. We’ll break down those costs, share some tips to maximize your financial aid, and explore your student loan options (in case you need them).

Let’s get started by understanding the true out-of-pocket expenses to obtain your degree.

Step 1. Start by Learning the Sticker Price of the Schools You Want to Attend

There are a few key terms you need to understand to master the financial aid process. Let’s start with Cost of Attendance (CoA). This is the “sticker price” and each school publishes its own figure on its financial aid site.

Cost of Attendance estimates the total cost of attending an MBA program each year and typically includes:

  • Tuition and fees
  • Estimated cost of course materials
  • Health insurance
  • Estimated Room and Board (where you’ll live and what you’ll eat)
  • Some allowance for personal expenses like travel (but less than many students typically spend)

Don’t let this figure scare you away because it is only a starting point. We’ll touch on strategies to rescue the sticker price through financial aid and scholarships.

Step 2. Apply For Financial Aid

Once you’ve been accepted to a program (congrats!), you need to start thinking about financial aid.

Merit-based Aid: You’ll typically hear about merit-based aid as soon as you’re admitted. Think of this like a discount to tuition because the school really wants you to attend.

Need-based Aid: Fill out the FAFSA application through the Department of Education. Then, fill out the financial aid application for each school that admitted you. Most schools will get back to you in several weeks with your financial aid award letter, which will be made up of grants and loans. Grants are effectively discounts (money that does not need to be paid back).

Step 3. Consider Negotiating Your Financial Aid Results

This is where things get interesting. Think of your financial aid award letter as a first draft as opposed to a finished product. If you really want to go somewhere and the cost after scholarships and aid is too high, try asking for a little more financial aid (seriously).

Many schools (but not all) are willing to increase the amount of aid they offer in order to get you to commit.

Why you should ask for more financial help:

  • Many programs are already budgeting for this. They expect some portion of admitted students to appeal for more aid.
  • Schools won’t rescind your acceptance just because you ask for more financial help (politely).
  • If you aren’t the one asking, you can bet someone else in your incoming class is. The worst you can hear back is a simple no. But the upside can put you ahead financially after graduation.

There are two broad scenarios where asking for more aid can help:

  • You received merit-based aid from multiple schools
    Let’s assume you were admitted to two programs, A and B. You really want to attend Program A, but Program B offered you significantly more financial aid. It’s perfectly fine to let Program A know that you sincerely want to attend but just need a little more financial help. They may not be open to matching the aid from another program, but they could help bridge the gap.
  • Circumstances have changed since you submitted your need-based aid application
    Maybe you omitted something from your original need-based aid application. Or some life circumstance has changed (growing family, changes in employment, etc.). Let the financial aid office know and ask if they can reconsider the amount of need-based aid for which you qualify.

Step 4. Apply to External Scholarships

Start exploring external scholarships as soon as you can. Many MBA programs publish a list of external scholarships that students have applied for in the past several years. We’ve done our best to collect publicly available links to these resources for 52 MBA programs.

Step 5. Budget for Some Extra Expenses

We’ve found that a school’s estimate for cost of attendance is often a bit too conservative. The MBA experience is as social as it is academic, which leads the average student to spend approximately $10,000-16,000 more per year than the school estimates.

Where does that money go? Trips, campus clubs, conferences, dinners, and more. Once you’re on campus, especially at the beginning, it can feel like you have to take part in every activity you hear about (the FOMO is real). But not every event or trip is really worth stretching your budget for.

Our advice: once you know which program you want to attend, reach out to second year students and ask them which trips and clubs were truly the most memorable in their first year. You’ll quickly realize which expenses to cut out.

Once you finish these steps, you’ll have a good sense for the out-of-pocket cost to complete your MBA.

Chris Abkarians is Co-Founder and Co-CEO of Juno. Juno uses the power of collective bargaining to help student save money on financing.

Exploring student loans to help pay for your MBA? We know deciding between your many options can be confusing. That’s why we created this guide specifically for grad students. 

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