Business school can be very expensive. You will be responsible for tuition, books, and related fees. You may also have to pay for housing, relocation expenses, and other costs commonly associated with an MBA. And if you are going to school full-time, you may only be able to work a limited number of hours each week--if you can find time to hold down a job at all. All of these expenses require some sort of financing. Fortunately, there are many different options available to people who can't pay for business school out of pocket. These options include scholarships, grants, student loans, and tuition reimbursement.
Business School Scholarships
Business school scholarships are the ideal way to pay for business school because scholarships do not need to be paid back. Of course, scholarship money is not free money. You will have to work hard to win scholarships and you may even be required to meet certain stipulations to use them. For example, many contests require you to write an essay to be considered for the scholarship. You may also be required to enroll in an accredited education program by a certain date to use the scholarship money.
Business school scholarships are available from a number of different sources, including professional associations; non-profit organizations; corporate and private businesses; and local, state, and national governments. Before applying for any scholarship, you should ready the fine print carefully to ensure that you are eligible. It is never a good idea to waste time applying for a scholarship that you cannot win--whether it is because of your age, nationality, race, or academic ability.
You should also take care to avoid scholarship scams. Students lose billions of dollars each year to such scams, and most of this money is never returned. Do not pay for the opportunity to enter a scholarship contest. You should also avoid paying for services that allow you to "search" for scholarships. There are plenty of free services online. A good example is FastWeb.
Business School Grants
Business school grants are just as desirable as business school scholarships. Grants do not need to be repaid--if you follow through on your schooling. There are two basic types of business school grants: those awarded by business schools and those awarded by the government. There are more government grants available to undergraduate students, but more business school grants available to graduate students.
You can apply for federal grants by filling out the Free Application for Federal Student Aid (FSA). Many business schools will also ask you to fill out this form so that they may better determine your financial need. Grants typically go to the most financially needy students. However, there are some grants awarded to students based on academic merit. Read more about filling out the FAFSA.
Borrowing money is not the best way to pay for business school, but for some students it is the only viable option. If you do need to apply for a student loan, it is important that you take care to borrow from the right sources. Interest rates and terms can vary significantly from loan to loan. The most desirable loans have low interest rates and deferred payments (required payments are postponed until after you graduate.)
Your first step in applying for a loan should be to fill out the FAFSA. This will help determine your eligibility for Direct Loans, which are awarded through the U.S. Department of Education. These loans are low-interest and have flexible payment terms. If you are not eligible for a Direct Loan, you may have to consider a private lender. You can go to your current bank or to a bank that specialized in student lending. You may also be able to borrow from a family member or a peer to peer lending group like GreenNote. Whatever you decide to do, make sure you take time to carefully compare terms and interest rates before borrowing any actual money. Read more about applying for a student loan.
Also known as employer sponsorship, tuition reimbursement is commonly seen in MBA programs. Although the set-up can vary depending on the employer, most cases of tuition reimbursement require students to pay for business school tuition up front and wait to be reimbursed by an employer after graduation. In some cases, the employer may be willing to pay the business school directly, but this is a rare occurrence.
Tuition reimbursement may be a good option for students who need help financing their business education. Of course, there are drawbacks as well. You need to have a current employer who is willing to help cover the cost of all or at least part of your education. Although many businesses have an established program that can help employees obtain advanced education, this type of deal is not available through every employer. Furthermore, you may be required to sign a contract promising to continue working with the employer throughout your schooling and for a certain number of years after graduation. Some employers may also require you to carry a certain grade point average or commit to a specific number of work/study hours each week. If you are considering tuition reimbursement as a way to pay for business school, be sure to take time to evaluate all of the pros and cons before making any formal commitments. Read more about tuition reimbursement.