QS World MBA Tour which conducts MBA fairs around the globe to connect admissions officers and alumni from business schools with prospective employers has assembled a short guide about MBA financing options.
We wanted to share the most useful tips with you:
Country-specific MBA loans
In general there is a variety of MBA loans available in most countries. They differ, depending on: Is the loan for a student studying in his/her country of citizenship/residence? Is it a loan for a student studying abroad but wishing to take up a loan in his/her home country or is it an international student seeking a loan from the destination country where the business school is based?
Students who study in their home country can often access federal/governmental and state/provincial loans, bank and credit union loans as well as other private and third-party loans (Don’t forget to ask your own family for a loan as well!).
In the United States, Federal Direct Loans are available in the form of Stafford and PLUS Loans. The Federal Student Aid website can be a great help here. https://studentaid.ed.gov/sa/
Taking up a student loan instead of a personal loan is recommended as student loans often allow for repayment deferrals until after graduation and often carry lower interest rates.
As with everything: Do compare and don’t take the first available finance option. Topics to look at before making an informed decision should be loan terms, interest rates, and minimum requirements to secure a study loan. Repayment deferrals until after graduation (as mentioned above) are also a definite plus when making a decision.
MBA scholarships
Don’t discard scholarships straight away. According to QS’ Top MBA report it is worthwhile researching all available options as different countries offer different avenues. Spain for example has eight different entities offering scholarships to top students. These are foundations, rich family endowments or regional entities. The Saudi Arabian government pays the full tuition of anyone who is accepted into one of the top programmes and some Latin American governments also have special support grants. Business schools themselves also often offer scholarships. Insead is one business school with a particularly generous offer (http://mba.insead.edu/schlmgmt/) for different nationalities, women and people with a diverse cultural background.
International students find it harder
In general it is easier to find a suitable financial option if you are a citizen of the country where your preferred business school is. Loan options for international students are much scarcer and more difficult to obtain. Some American universities like Duke’s Fuqua School of Business offer to co-sign on the loans of international students, a requirement in the United States, and a support mechanism for foreigners to obtain loans.
One option is Prodigy Finance which was started by three Insead MBA graduates who experienced first hand the difficulties of financing an international MBA. They started out in 2007 and found investors – alumni, institutional investors and qualified private investors that earn competitive financial returns via the company - whilst financing students’ business school fees. Their website states that to date, they have funded students from 92 nationalities with a repayment rate in excess of 99 per cent.
Other international funding sources are the International Rotary Club (https://www.rotary.org/) as well as the Richard Metzler and Roland Berger Scholarships (www.amcf.org). A new support offer comes in the form of the Global Study Award which offers £10,000 towards tuition fees and living expenses for students studying abroad. The British Council IELTS is launching this award together with the International Student Identity Card and StudyPortals.
Business school Insead also offers a detailed list of finance options depending on your home country which is worthwhile a look – http://mba.insead.edu/financing/loans.cfm
Find full report here:
The Money Will Follow: A Short Guide to MBA Financing Options