Financial 411: Financing the MBA

A good two-year MBA program costs in the vicinity of $140,000. For all but a few students this represents a major sacrifice. An MBA degree, of course, constitutes a sound investment – there is no replacement for the rigorous training and vast networking opportunities offered at a top school. Nevertheless, financing an MBA requires careful planning and a thorough knowledge of the available options. What follows represents ten

Chioma founded EXPARTUS based on her vision of personal branding as a key component of a successful admissions process and her passion to enable others to realize their life's dreams. Previously, Chioma served as an Assistant Director of Admissions and a Member of the Admissions Board at Harvard Business School, where she reviewed applications, interviewed U.S. and international candidates, and developed a marketing strategy focused on minority candidates and the MBA program.

critical pieces of strategic wisdom to ease the stress and confusion that surrounds paying for a top-shelf education in business management.

1. Scholarships, grants, and fellowships are hard to get – but they're worth the effort
Many top business programs – such as those at Harvard, Stanford, and Kellogg – offer need-based grant and fellowship assistance. These will not cover the full cost of tuition but can significantly offset it. All top MBA programs use need-blind admissions; if you are offered admission, they will help you figure out how to pay.

2. Hard work pays off
Merit-based scholarships, though rarer than need-based ones, are available at some schools. Columbia and Kellogg, for instance, both award grants to exceptionally talented students – which means, with an extraordinary track record in academics and demonstrated leadership, you stand a stronger chance of coming into some of the available funding, which can be as much as $10,000 a year. Stanford also recognizes achievement during the MBA program: the Siebel Scholars Award is given to top students in their second year.

3. Seek outside sources of funding
Many top corporations sponsor fellowship programs for MBA students. If coming from the corporate world, it is wise to explore the possibility of employer sponsorship. Bear in mind, however, that grant money in excess of tuition and standard fees becomes subject to taxes.

4. Take advantage of every angle
Significant outside funds exist for students who fit a certain profile. Often these are scholarships for minority and women students: the Forte Foundation seeks to sponsor future female leaders in business; the Toigo Foundation does the same for minority students. Some schools even offer career-specific grants, such as the Leaders for Manufacturing fellowship at M.I.T.'s Sloan School of Management.

5. Borrowing is a necessary evil
Almost all students who graduate from MBA programs do so with some debt. The trick is to manage and minimize that debt. Loans come in two kinds: federal and bank. Federal aid is available only to citizens and permanent residents of the U.S. Many non-federal options do exist for international students.

6. Make sure you shop around
Schools usually have partnerships with banks to offer non-federal loans to their students – for instance, Harvard partners with Citibank – but regardless of the loans available to you, comparison shopping is essential.

7. Financing the MBA is a complex endeavor that must begin years before matriculation
Essential both to minimizing your debt and ensuring your eligibility for loans is savings: before issuing a loan or other financial aid, a school or bank will look at your financial records from the past three years; the financial aid office will want to see that you have been responsible about putting away money for your education.

8. Use the web
The Internet has radically altered the playing field when it comes to financing one's education. Be wary of scams, as they are plentiful, but many legitimate resources exist. Some of the best are CollegeToolkit.com, Fastweb.com, and Finaid.org.

9. Your career after graduation may affect your debt
Some top schools, including Stanford, offer loan forgiveness for MBA graduates who enter the non-profit sector or work in developing countries.

10. The financial aid process must be managed carefully
Two major elements of this are documentation and deadlines. To successfully apply for a loan, you must have all the relevant documents in order. These include FAFSA application, CSS profile, and tax returns from the past three years (including those of a spouse or parents, if relevant). It is also critical to check that your credit rating is accurate and up-to-date: poor credit or extraordinary outstanding debt can jeopardize your loan application. Finally, be mindful of deadlines: fellowships at a given school almost always have earlier deadlines than the application itself; different schools also have different deadlines for filing the FAFSA.