How to Pay For Your M.B.A.

Use these financing tips to earn an M.B.A. with manageable debt.

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It's that time of year again—applicants are experiencing the euphoria of acceptance at the b-school of their dreams, only to be jarred by the reality that they've now got to come up with the money to pay for it. Popular M.B.A. applicant blogger Richard Battle-Baxter says he nearly fainted when he received his initial loan award notification. "I knew that would be coming but it was like looking at an employment offer! I mean actually... [one] year's tuition is definitely someone's yearly salary!" 

Tuition at the top programs can soar well over $100,000, and tangential academic and living expenses will also set you back a pretty penny if you're planning on earning your M.B.A. degree in a metropolis such as New York, Boston, or Los Angeles. You're about to pony up for one of the most costly investments of your life at exactly the same moment you must bid adios to your (hopefully) substantial annual salary for up to two years. For many, that's a sobering realization.

[Learn more about paying for business school.]

Finding the money: Even in these strained economic times, American banks know that M.B.A. graduates with a decent credit history are a sound investment when they start work, according to Ross Geraghty's recent article on M.B.A. loans published by QS Top M.B.A. 

While scholarships and other types of "free" money are available at fewer M.B.A. programs than non-professional forms of graduate education, there are many resources available for a scholarship or fellowship that fits your background and needs. 

The first stop is your target program. Many schools have comprehensive websites on the topic, including this prolific resource on outside funding from Harvard Business School. If you've already been admitted, your school will present you with a package of information about public and private loans and scholarships. The program may have access to loans or lines of credit for both domestic and international M.B.A. students and will sometimes act as the guarantor for private loans. 

Alexis Mellon of the Fuqua School of Business at Duke University tells Top M.B.A., "We have ensured that the Duke M.B.A. loan program has always been accessible to international applicants on the same terms as it is for our domestic applicants." 

Mellon adds, "Duke University agreed to underwrite the loan—effectively acting as a co-signer—so that any student admitted to any of our M.B.A. programs was automatically eligible for our loan program, which covers up to 100 percent of tuition. This way we have been able to protect our international applicants and afford them the same opportunities as our domestic applicants." 

[Read about scholarship sources for international students.]

Likewise, Paul Danos, dean of Tuck School of Business at Dartmouth College, has told Top M.B.A., "Financing will not keep the right student from coming to our program." 

Depending on your career plans post-graduation, you may qualify for certain loan forgiveness programs. For example, Stanford Graduate School of Business supports M.B.A. graduates entering the nonprofit and public-service sectors and therefore has developed a loan forgiveness program to reduce the financial impact of GSB educational debt. 

You may be considered for merit fellowships based on your academic credentials, accomplishments, and experience that have already been communicated in your application. Some schools may also offer additional fellowships that you can apply for directly through the program. After you have searched your target schools' websites for all available sources of funding, you may want to peruse general sites like FastWeb, Peterson's, and FinAid

Applying for the money: There are many different application processes for financial aid—from demonstrating need to demonstrating merit. Organize the deadlines and submission guidelines to make sure you have a plan to complete the applications, and carefully follow the directions of each scholarship, fellowship, or loan for which you are applying. 

If the program asks you to submit an essay, answer the question as thoroughly and succinctly as you would any other M.B.A. essay. The value of fellowships and scholarships should be fairly straightforward, though you may emphasize whether you seek either need or merit in your response. 

[Get advice on strengthening your M.B.A. application.]

The need-based direction may be difficult to prove without serious financial hardship. If you did face financial difficulties throughout your life and would not be able to attend business school without such assistance, you have a good argument. If not, you should pursue the merit-based option. 

If you think you'll qualify for need-based aid, describe your situation and why you would have difficulty paying for your M.B.A. education. Avoid any complaining or blame, and instead focus on what you have accomplished in your life with little resources. 

If you are going with a merit-based argument you should outline your accomplishments, both academic and professional. Sell yourself as you would in a job interview, and provide solid evidence for your accomplishments as you did in your application essays. 

Your receipt of aid may benefit the people around you. If you have been involved in your community or with charity, you can certainly describe the impact you have made on the lives of others thus far and how that impact will be even greater with a business education. 

There's definitely free money out there; it's just a matter of tracking it down. As Battle-Baxter writes, "I'm seeing it being handed out left and right. I just need to figure out how I can get in the same lane."