How to pay for an MBA

An MBA can land you leadership roles and lead to a high return on investment — but the popular graduate business degree comes at a cost. Top-ranked institutions may cost between $80,000 and $118,000, and some Ivy League schools charge even more.

A growing number of schools have embraced online MBA programs in recent years. An online MBA is generally more affordable than a traditional, in-person program and makes earning an MBA more achievable for many potential students, but cost can still be a barrier.

More than half of MBA students get into student loan debt to attend school, and the average debt burden after completing a Master of Business Administration and the prerequisite undergraduate degree is $82,439. That cost is why it is wise to look into grants, employer-funded programs, scholarships and fellowships in addition to loans.

Ways to pay for your MBA

Don’t let tuition sticker shock deter you from achieving your educational and professional goals. Schools, organizations and businesses all offer programs that can make your degree more affordable, and getting a student loan can fill in any gaps.

MBA fellowships, grants and scholarships

Fellowships, grants and scholarships are types of funding for your education that you do not repay. Many of these programs consider your academic record, but some are need-based or geared toward specific groups of students. Depending on the type of award or fellowship, you may also need to demonstrate your professional experience, volunteerism and community leadership.

Corporations, foundations and schools all offer these types of aid. With some programs, you may have access to career mentors, networking opportunities and summer work experiences in addition to the basic aid package. To find opportunities, you may use a scholarship search engine and check with your state’s and college’s financial aid department.

Company-sponsored MBA

Most companies recognize the benefits of investing in their employees through tuition assistance programs or scholarships. Roughly half of employers offer some kind of tuition assistance program.

Employers find that these programs not only help develop leaders from within the company but can also serve as a recruitment and retention tool. Many millennial workers have said they would change employers to take advantage of tuition reimbursement benefits.

Talk with your manager about educational opportunities through the company. Programs may offer upfront assistance or reimburse you for completing classes. They may also limit educational options to degrees that align with company priorities or require you to continue working for the company for a defined period of time after graduation.

MBA student loans

Most graduate students take out student loans to cover the cost of tuition and fees, and MBA students are no exception. Federal options include Direct Unsubsidized Loans, which let you borrow up to $20,500 each academic year, and Direct PLUS Loans, which let you borrow up to the full cost of attendance.

Borrowers often shop for private MBA loans when they surpass borrowing limits with federal student loans or are offered lower interest rates. If you have a high credit score, private student loan interest rates can be competitive, although these loans don’t offer the same benefits and protections as federal student loans.

Whether public or private, MBA student loans are intended to help students earn a Master of Business Administration degree. Depending on your degree program, you may attend school part time or full time. Completing such a degree can take anywhere from one to four years, on average. If you are borrowing to cover the cost of attending school and living expenses both during that time, you will want to be mindful of student loan borrowing limits.

Personal savings

Business schools often encourage applicants to spend a few years in the workforce before starting their MBA. Professional experience equips students with an understanding of the business world and the practical application of their new skills.

If you begin your professional experience knowing you will return to the classroom, you can start saving toward your goal. Using personal savings can reduce your dependence on loans that must be repaid with interest.

But use caution when pulling from your savings account. Most experts suggest keeping three to six months of expenses tucked away for emergencies and surprise bills. Paying for an MBA out of pocket is not worth it if you deplete your emergency fund.

How Much Does an MBA Cost?

The average cost of an MBA is roughly $55,000, but cost varies based on program format.

An online, full-time MBA program costs roughly $28,500 per year, but top-tier programs can cost more than $80,000 annually. Tuition and fee rates will vary by term depending on the institution and your residency status.

When considering MBA programs, remember that tuition and fees only account for some of the cost. The cost of attendance will give you a more realistic idea of how much you’ll need to spend on your degree. This figure will include ballpark numbers for books and supplies, as well as living expenses like rent, transportation, and groceries.

Generally speaking, public institutions cost less than private, and online programs tend to be less expensive than in-person classes. The location of your school and that area’s cost of living can have a major impact on how much your degree program will cost overall.

While an MBA often comes with a high price tag, it can lead to management roles and bring a hefty return on your investment. The Bureau of Labor Statistics projects millions of job openings in management occupations over the next decade. That field has a median annual wage of $116,880 as of May 2023.

The bottom line

Getting an MBA is an expensive endeavor, but it’s also becoming more flexible. An increasing number of online programs could open your options without having to relocate. And despite being costly upfront, an MBA often opens up new career opportunities for people seeking executive roles and could pay for itself in the long run.

Frequently asked questions

• What funding options are available to international MBA students?

  International students may apply for MBA scholarships and fellowships from their school and other organizations. Certain qualified non-U.S. citizens may apply for federal loans, and some international students can qualify for private student loans with a co-signer.Your home country or institution may offer student support for international study as well.

• Is an MBA worth it?

  An MBA can qualify you for management positions in your organization and higher pay, but you’ll have to weigh this against the potential debt you’ll leave school with. Ultimately, an MBA program is worth it if it helps you achieve your career goals and makes sense financially.

• Why is an MBA so expensive?

  Graduate programs require an investment in faculty, research and resources. Business schools also compete for knowledgeable professors with business experience. Several schools, however, have taken steps to rein in costs by implementing guaranteed tuition and tuition freezes throughout a program.

• How do I pay for an executive MBA program?

  Executive MBA programs tailor their curriculum to executives looking to develop their leadership abilities while continuing to work. The average current cost of ranked EMBA programs was $126,517 in the 2022-2023 academic year.
  You can pay for an executive MBA program as you would any other MBA program — with scholarships, grants, tuition reimbursement and student loans.

• Is paying for an MBA tax deductible?

  Pursuing an MBA can save you money on your taxes, depending on your jurisdiction and income. Tax regulations allow expenditures undertaken for education to be deductible if they meet employer requirements or maintain and improve skills required by an individual for their trade or business.