When thinking about pursuing a Master of Business Administration (MBA) an important question to ask yourself is what you can afford. An MBA can be a significant financial commitment and you need to consider the entire cost of the program. The number of credit hours required to complete your degree can vary from as few as 30 to upwards of 60 and tuition prices can range from $20,000 to over $150,000. Several factors affecting the costs of MBA programs include part time versus full time enrollment, school type, online fees, books, and travel expenses.
When utilizing employer tuition assistance, get to know your company’s policy. Take time to understand your benefit year. Is it based on calendar year, fiscal year, or something else? Also pay attention to your use year. Is it when a course starts, ends, or when you receive reimbursement from your company? This is most important for those who plan to start in the fall and think you are going to be able to use tuition assistance for that year. If your benefit is based on when you are paid by your company, you may not have your grades in time to be reimbursed before the end of the year.
Next, consider how quickly you will be able to finish your degree. Does it make sense to spread it out over a longer duration? Enrolling part time will allow you to continue working full time and take advantage of your tuition benefit. If it typically takes students two years to complete the degree, can you do it over three or four? Extending the time to completion often allows you to stretch out your tuition benefit and possibly reduce your out of pocket costs.
Once you decide on a program, hopefully one that fits within your budget, determine if there is a shortfall you need to cover. Many of you will need to front the cost of your classes since you do not receive tuition assistance until successful completion of your courses each term. If you do not have the resources to do so, you need to plan how to cover these costs. One suggestion is to look for outside funding such as private scholarships prior to starting your MBA. If you belong to professional organizations check with them for scholarships available to members. Try searching online for opportunities within your community or local foundations. Many business schools have a section on their websites with information on outside scholarships. You can also create a profile on a national scholarship search engine like www.scholarships.com. Please note, however, that scholarships and grants are limited for part time students.
If you need to finance your MBA, you can apply for federal student loans by completing the Free Application for Federal Student Aid (FAFSA). Graduate students can borrow up to $20,500 per academic year with no credit check. Additional funds can be borrowed through the Federal Graduate PLUS loan. Loans that you take out for your degree will accrue interest once they are disbursed. You can explore other options through your state or private loan companies and compare the rates to those offered by the federal government. It is important to understand the terms of the loans – interest rates, fees, repayment terms, and the required monthly payment.
It is never too early to start planning for your MBA. Consider putting away money by saving a little each month. This might mean adjusting your monthly expenses to free up cash flow. If you have outstanding debts paying these down or off can free up cash flow that you can apply towards your MBA. Every little bit can help at the end of the day.
Make sure you are comfortable with the costs you are going to incur. Earning an MBA can boost your potential salary. Speak with your manager or others within your company to map out how your degree will help you grow within your role and career. At the end of the day, you want to make sure that you are comfortable with the price and the return on your investment.
Check out our two-part blog series MBA 101: Is It Right For Me? Part I and MBA 101: Is It Right For Me? Part II for more information on what to keep in mind when considering an MBA.
