Ever wonder how to pay for an MBA? It sounds so expensive! Well, I wondered too, so I asked some of my blogger buddies for help, and Max from the Free Times heeded my call. He’s passionate about helping people achieve financial independence faster and he holds both an MBA and a BS degree in physics. Max uses his blog to share information that has the potential to change your life. When he reaches financial independence he hopes to open a dog shelter and travel the world – and here he shares how he paid for his MBA.
How I Graduated from a Top MBA program completely Debt Free
A few years ago, I made the decision to pursue my MBA. The degree, for whatever reason, is a controversial one. I believe this to be the case largely because both folks who considered doing an MBA but chose not to, and those who ultimately did do an MBA want to justify their decision in whatever way they can.
Make no mistake, if you are going to forego two years of your salary and spend upwards of $200,000 on anything it makes sense to rigorously determine, for your situation, is an MBA worth it?
My time in business school was incredible. I had no shortage of once in a lifetime experiences, from traveling the world, to launching a startup for class, to making literally dozens of amazingly talented friends that I will lean on for the rest of my professional life. Personally, I am supremely confident that the investment was worth it in my particular case.
This post is about eliminating the roadblock that many people find to be either a deal-breaker, or a strongly negative factor when considering to do an MBA. There are many factors at play that will impact whether or not this sort of investment will make sense for any given individual, but this post is here to hopefully make the cost side of the equation less of a factor.
Without further adieu…9 Great Ways to Pay for an MBA
1. Improve your GMAT Score
Huh? You are telling me that in order to pay for my degree I should do better on a test? Yes indeed. Business schools are in fierce competition for top talent, and it is important to think about the incentives of an admissions committee. Among other motivations, they want their schools to be held in high regard and to continue to have sparkling reputations long into the future. One way they can tangibly do this is to ensure they are ranked highly on the most influential business school rankings published each year. Somewhat of a gold standard ranking being the U.S News and World Reports ranking shownhere .
What is one way to move up in these rankings? You guessed it! The average GMAT score of their students. Given the choice between two applicants who are largely similar, admissions committees have a tendency to try and “buy” talent to come to their school through MBA scholarships. I found that schools that are considered a step below the top tier programs tend to try and effectively buy talent to improve their positioning. I personally received a 50% scholarship at one such institution, based largely on my GMAT score. To be clear, the GMAT is absolutely not the only factor, nor is it the most important factor to determine MBA merit scholarships. However, it does help improve your odds, and if you are interested in chipping away at that intimidating price tag of tuition, every little bit counts.
2. Look for Companies to Pay Your Tuition for You
If you currently work at a company who sponsors MBA tuition you are likely already aware of this fact (and you probably wouldn’t be reading this post in the first place). But did you know that some companies reimburse the second year of business school tuition simply for interning at the company and promising to return upon graduation? I would not advise picking a career path based on this fact alone, nor would I advise working for a company that you otherwise would not enjoy working at. The fact remains however that this option does exist, and it can take a massive weight off of your shoulders. In fact, I personally had my second year of tuition covered by my summer employer. For one list of companies that pay for an MBA (I am certain that this is not nearly comprehensive), see .3. Side Hustles
This is a fun one! When I decided roughly 2 years prior to applying to business school that I wanted to do my MBA, I became determined to save and grow my income to make it through the two years without taking on any debt at all. Side hustles were a great way to chip away at that tuition bill and can be done prior to, and during business school. My personal favorite was becoming a dog walker for the dog walking app Wag! Personally, I love dogs, and I love being outside. So being paid to walk dogs was basically a dream come true. If you are interested, find out more about my experience walking for Waghere !
I used to think making money necessarily came at the cost of giving up your time doing something you dislike. Walking dogs for an income changed my mind! I made a few thousand dollars walking dogs, and also selling items around my house on Amazon through their FBA program. The bottom line: find something that you enjoy doing that you can also be paid for, this is a great way to increase your income at any stage in life, but especially so when planning for an MBA.
If you want more information on starting a side hustle, check out Launch Your Side Hustle, and epic course with everything you ever wanted to know about building and launching your side business.
4. Case Competition and Design Competitions
This one is not to be relied on, as you can’t exactly plan to win a competition. However there are several competitions out there that you can take part in as a business school student.Some of these competitions are sponsored by companies, and some are sponsored by the programs themselves, but in each case these competitions bring together students from MBA programs all over the country to compete. One such competition is the Kellogg Design Challenge, in which winning teams collect straight cash prizes of $12,000, $5,000, and $3,000 for 1st, 2nd, and 3rd place respectively. See here for more details about the challenge.
These challenges can be a great learning and resume building opportunity, as well as an opportunity to get you one step closer to graduating with you MBA debt free!5. Roll Over Your 401K to a Roth 401K While You Are in School
This one sounds fancy buy it is straightforward. While you are in school, your taxable earnings will be very low relative to all other years in your life (especially with and MBA degree). If you have been funding your 401K with pre-tax dollars prior to business school, your time in school may very well be the perfect time to bite the tax bullet and pay Uncle Sam the taxes you owe now, as opposed to when you retire and your tax bracket is presumably higher. This can save you thousands of dollars.6. Business School Loans
You knew we would get here eventually right? This is not free money of course, but there are both federal and private loan options available to business school students that can get you over the hump if you run out of other options shown here in this list. Loans are not free money of course, and you are best served doing a good amount of due diligence and shopping around before settling on a loan plan that works for you. Ideally the other strategies on this list will do the trick for you, but if not, getting your MBA can still make sense even when loans are in the picture.7. Savings From Your Job
This was the single most impactful strategy for me personally. Yes, even more so than finding an employer to sponsor my second years tuition!
- Determine my monthly bare minimum recurring expenses (non-negotiables like rent, utilities, etc..)
- Determine my average monthly spending on other miscellaneous purchases. This amount assured that I would be able to live a little and spend on social events and experiences every once in a while. Primarily however this amount was intended to make sure that I was being mindful with my purchases and was only spending a reasonable amount each month.
- I then added the amounts from steps 1 and 2 above to determine how much money I would need to have coming in every month.
- This is the key: I then automatically deposited exactly that amount of money into my checking account every month, and deposited the entire rest of my paycheck into various investment accounts. This could literally look something like “I will only spend $2,345 per month for the next 12 months”. THAT is the level of specificity in my goal setting I aspired to.
Using this method I was able to not think about every purchase and simply spend freely while there was money in my checking account without feeling guilty about it. All the while knowing I was saving a healthy sum for business school.
8. During School Internships
This is a surprisingly controversial one among business school students. The idea being that time is at such a premium with all you could be doing during your time in school, be it social, classes, clubs, job recruiting etc., that spending a good chunk of it working or doing an internship may take away the “true” business school experience. I personally don’t agree with this assessment, and know many colleagues who were able to have a successful and fulfilling business school experience while also working/interning part time during business school.
In addition to the money that can certainly help get through your two years, interning at a company in a relevant industry to your career goals can be extremely rewarding in its own right.
9. Academic Awards and Scholarships
Last but certainly not least, we have academic awards and scholarships. Many schools and third party organizations have a plethora of scholarship opportunities for students with different backgrounds or career aspirations. Some are automatically granted to admits that the schools deem particularly qualified to attend their program, others are from outside organizations and require an application. See here for a myriad of different scholarship opportunities you can apply for.
The Final Word
So there you have it! 9 methods you can use to take the plunge into one of the most controversial, and rewarding degree experiences that exist. Do and MBA if you want, don’t do an MBA if you don’t want, but using these methods should allow you to make the choice considering what is best for you, and not simply the upfront cost.