Financing your International MBA
When one applies to study at a top global business school, they put in a lot of thought into crafting the best application which would allow them to secure a seat at the MBA program. However one of the biggest, and critical decisions to make comes after you’ve gotten the admit; how do you pay for your MBA program?
What are the Costs?
When you move to a foreign country to complete your MBA, there are many types of costs that come up, including,
Food & drink
Academic provisions (books, laptop etc.)
Travel expenses (for exchange programs, semester abroad programs)
While many of the costs are quite variable depending on how lavishly or frugally you choose to live, the one definite cost is the tuition fees. So how much does it cost to get an MBA today around the world?
Harvard Business School: $111,818 per year (including on campus boarding)
London Business School: £87,900
As you can clearly see, the cost to attend any of these schools is extremely high, with the US schools being among the highest due to the fact that they are 2 year programs. So when the costs are so high, what options do students have to finance their studies?
There are many, and we explore them below.
Savings & Family Support
Some business schools, particularly in the US, have huge grants of funds which they used to award need based scholarships to their students every year to assist them in their MBA journey. As the name suggests, they are based on a student’s financial position and not on merit. These are typically awarded by the school themselves without a separate scholarship application.
The amounts awarded can be quite significant as well - Harvard awards its students an average of $84,000 over the course of its 2 year program.
Business schools always look to reward their best candidates, and one of the most common ways it does so is through the granting of merit based scholarships. These could be given to students on the basis of academics, work in a particular sector, or just the overall strength of your application.
Students are normally automatically considered for merit based scholarships offered by the school directly, however there are also many external/specific merit based scholarships which students have to apply for separately. These could be based on your country of origin/the program you’re applying to/the country you’re studying in etc.
A few examples of famous external scholarships are,
Eiffel Scholarship: Offered by the Government of France for international students, pays a monthly stipend for living expenses, covers travel expenses and organizes various events and trips for recipients.
Knight Hennessy Fellowship: Formed by founder of Nike, Phil Knight, it offers selected students enrolled at Stanford a full tuition waiver, plus living expenses, and incredible networking and development sessions with other Fellows and top business leaders.
Savings & Family Support
Despite the many external options they may consider, students do often have to look to fund some part of their MBA through their own savings or possibly from the support of their family members. These are important especially early in the program in case they are facing delays with loans/other funding methods.
While taking up an MBA is a deeply personal decision and is very often used as a means to change industry/sector/company, some students are lucky enough to love the company where they are working and have their company support their MBA dreams by sponsoring their program.
The amount of the sponsorship can vary from a fixed part of the fees to paying for the entire program itself. While this is incredibly convenient for the student and completely eliminates the financial burden of their MBA, these situations will almost always require them to sign a contract with their company, committing to rejoin them and stay for a minimum number of years after the MBA.
Despite all the benefits of the options listed above, the ground reality is that only a minority of the total students at these program receive significant scholarships or company sponsorship. So for the majority, the one option that remains is to opt for external loans.
Education loans from top banks / companies typically will cover your entire business education costs if you require it, since they are confident in student’s earning ability after the program is completed. Depending on the lender, students typically have a cooling off period of around 6 months-2 years from the date of graduation, after which they start repaying their loans.
It is incredibly important to know all the details well before taking a loan from a particular lender, otherwise you might end up with higher interest rates and harsher terms than other options could have given you.
There are also many non-banking entities which provide loans to students at highly attractive rates and easier conditions. One of the largest such organizations is Prodigy Finance, founded by INSEAD alumni.
At the end of the day, most students earn more than enough after a top MBA to repay any loans or borrowings they have taken, but you should always do your homework and find out every single available option for you based on where you are applying, and make sure you try to get your costs down as much as possible.
So start researching today, and find the scholarships to make your dreams come true!
Abhinav is a commerce graduate of H.R. College of Commerce & Economics, Mumbai currently pursing a career in finance at Deloitte.
He is an avid sports lover, particularly of badminton, cricket and football, and also enjoys playing the guitar. He has an admit to the ISB PGP for the Class of 2022 through the YLP program.
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