If you’re thinking about business school in the near future, chances are you are also exploring how MBA students finance their education. While the MBA continues to be one of the best short and long-term investments you can make into yourself and your future, it does necessitate a bit of planning ahead. Booth’s office of Financial Aid offers prospective students some information on what to expect and some additional options you may not have considered.
Know what expenses to expect
We suggest you start by looking at current tuition rates at your target schools. Even if it’s a year or two before you want to begin your program, you can start calculating a close approximation of costs now. Most schools break down their cost of attendance to include estimates such as renting an apartment, buying a computer, food, textbooks, and securing health insurance — all mandatory expenses every student will have to factor in. At Booth, for example, students may request a loan amount that can also cover these mandatory items.
Your MBA costs, however, won’t be limited to tuition and the necessities mentioned above. Many programs also offer endless travel opportunities - academic, career-related, and purely social. For example, Booth students take Career Treks to meet alumni and industry leaders in various cities in the US and internationally during academic breaks. You will also likely get involved with several student groups, which generally have fees to join. Many Booth hopefuls have their sights set on joining a Random Walk trip with fellow incomings classmates before school begins, which requires money out of pocket—albeit money well spent. A number of events you want to attend (socials, formals, trips, spring break, etc.) may pop up each quarter, so plan to add a few such expenses to your list. This is where money you save before you begin an MBA program will come in handy.
Be in the driver’s seat
It’s important to note that your lifestyle during your time as an MBA student can vary wildly based on your choices and, ultimately, you can control how far your money will take you. Be mindful in choosing the right balance for you and plan to be strategic with your spending. Try to identify any easy ‘big wins’—for example, if you can live with a roommate, you can see significant savings in housing costs. Maybe you already have a great laptop, plenty of frequent flyer miles, or have no problem leaving your car behind and taking advantage of Chicago’s public transportation. All of this can add up to significant savings during your MBA program.
Prior to even starting their MBA, many students create a savings goal for how much money they want to set aside by the time school begins. The rationale being that every extra dollar you save now is one you won’t have to borrow.
Other funding options
In addition to applying for federal or private student loans, doing the work to find other funding options will pay off. Does your employer offer MBA sponsorship, or any type of tuition assistance? If so, is it in your best interest to utilize such funds (and accept the terms of such support)? Employer support can require a commitment to return to the employer after school. Be sure to investigate whether an employer assistance program a.) is negotiable; and b.) has amenable terms.
Are there any agencies or associations you know of or are connected with that offer scholarship or fellowship support to students pursuing their MBA? These could be religious institutions, professional associations, military affiliations, etc. Many students have found success doing a broad scholarship search using big aggregator databases like scholarships.com or fastweb.com.
Family may be another feasible source of funding. Whether gift support or loans with favorable terms, approaching family members who have resources may be a worthwhile conversation to have.
Chart your path to success!
Keep in mind; you’re not trying to create a detailed budget quite yet. But when you know what you may spend in a given year, combined with any personal savings and resources, you will develop a clearer sense of what your borrowing estimate might look like.
The majority of Booth students take out student loans to pay for their education and see the lifelong benefits of this investment! Last year 98.4% of the Chicago Booth Class of 2016 received job offers within three months of graduating, earning a median base salary of $125,000. This can certainly help set prospective students’ minds at ease when it comes to understanding the position they will be in upon graduation.
Getting a handle on your financing doesn’t need to feel daunting. Most everyone considering an MBA has the same questions —so you’re not alone. There’s no one right way to fund your education, only a right way for you. As many Booth alumni will attest, minimizing borrowing is great, but taking full advantage of the many experiences and relationships that are only possible while in business school will continually pay dividends throughout the entirety of your career.
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