Paying for an MBA
Just curious to hear people’s stories/opinions on paying for an MBA - if you saved up from working / company paid for it / family paid / loans,etc - and what you think is best
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Based on the WSO Dataset, financing an MBA can be approached through various strategies, each with its own set of advantages and considerations. Here's a breakdown of common methods people use to pay for their MBA, along with insights on what might be considered the best approach depending on individual circumstances:
Savings from Working: Some individuals plan ahead for their MBA expenses by saving a portion of their earnings. This method requires discipline and foresight but allows for greater financial freedom post-graduation since it minimizes or eliminates the need for loans.
Company Sponsorship: In certain cases, employers are willing to finance an employee's MBA in exchange for a commitment to return to the company after graduation. This can be an excellent way to fund your education, though it does come with strings attached regarding your career path immediately following your MBA.
Family Support: For those fortunate enough to have the option, family funding can alleviate the financial burden of an MBA. However, this method is not available to everyone and can come with its own set of expectations or conditions from family members.
Loans: Many MBA students rely on loans to cover tuition and living expenses. While this is a viable option, it's important to consider the long-term implications of taking on significant debt, especially from programs outside the top 10-15, where the return on investment might be lower.
Scholarships and Financial Aid: Seeking out scholarships and financial aid can significantly reduce the cost of an MBA. While competitive, these funds do not need to be repaid, making them an attractive option for reducing overall expenses.
Combination of Methods: Often, students use a combination of the above methods to finance their MBA. This might include personal savings, partial family support, scholarships, and a manageable amount of loans.
The "best" method depends on individual circumstances, including financial situation, career goals, and personal preferences. For instance, if avoiding debt is a priority, then saving up or seeking scholarships might be the best approach. Conversely, if you're aiming for a significant career pivot or acceleration that you believe an MBA will facilitate, taking on loans with a clear repayment plan might be a worthwhile investment.
In summary, carefully consider your financial situation, career objectives, and the potential return on investment when deciding how to finance your MBA. Planning and research are key to making an informed decision that aligns with your personal and professional goals.
Sources: How do people actually pay for MBAs?, To anyone considering an MBA, MBA Costs $500,000 -- Worth It?
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I did my MBA part-time at Stern, so I got to keep working and just took class twice a week from 6-9pm for three years. This was kind of brutal with the number of hours I worked, but my team supported me doing it and I loved the program. My job only gave me $5k a year towards tuition though. The total cost of the program was close to $170,000. My bonuses after taxes were usually around $40k to $50k. I would take out loans to cover the tuition and then once I got my bonus in February, I would put all of it towards the loans. After I finished the program, it didn't take long to pay off what was left and then I got a significant pay bump.
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