MBA Student Loans

As with the majority of graduate school programs, an MBA degree is a large financial commitment. While the costs vary widely depending on the school and ranking of the program, the tuition can range anywhere from $20,000 to more than $160,000. For students wanting to fund their education, there are plenty of loan options to help pay their way.

What is an MBA Loan?

An MBA loan is a loan that is extended to a student to pay for their education. In this case, it is a graduate school MBA program. With the cost of MBA programs constantly rising, many students are finding they need to take out loans to fully fund their education.

For students receiving an MBA loan, it’s important to note that they are intended to pay for all educational expenses and not just tuition. Room and board, books, and supplies are among the items that can be paid for using an MBA loan. There are federal and private loans available to students and we will cover everything you need to know in this article.

Top MBA Loan Options

Private Student Loans

Ascent

✔ Variable APR: 1.46%-11.31%
✔ Fixed APR: 3.21%-13.02%
✔ Degrees: Undergraduate and graduate student loans
✔ Loan Term: 5, 7, 10, 12, 15, and up to 20 years
✔ Fees: No application or origination fees
✔ Cosigner release: Yes.

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Private Student Loans

Citizens

✔ Variable APR: n/a
✔ Fixed APR: 3.23%-11.70%
✔ Degrees: Undergraduate and graduate student loans
✔ Loan Term: 5, 10, 16 years
✔ Fees: No application, origination, or prepayment penalty fees
✔ Cosigner release: Yes.

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Private Student Loans

College Ave

✔ Variable APR: 0.94%-11.98%
✔ Fixed APR: 2.94%-12.99%
✔ Degrees: Undergraduate and graduate student loans
✔ Loan Term: 5, 8, 10, 15 years
✔ Fees: No application, origination, or prepayment penalty fees
✔ Cosigner release: Yes.

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Private Student Loans

EDvestinU

✔ Variable APR: 2.37%-6.73%
✔ Fixed APR: 3.02%-8.22%
✔ Degrees: Undergraduate and graduate student loans
✔ Loan Term: 7, 10, 15 years
✔ Fees: No application, origination, or prepayment penalty fees
✔ Cosigner release: Yes.

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Private Student Loans

INvestEd

✔ Variable APR: 1.69%-5.65%
✔ Fixed APR: 3.33%-7.69%
✔ Degrees: Undergraduate and graduate student loans
✔ Loan Term: 5, 10, 15 years
✔ Fees: No application, origination, or prepayment penalty fees
✔ Cosigner release: Yes.

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Private Student Loans

Sallie Mae

✔ Variable APR: 1.13%-11.23%
✔ Fixed APR: 3.50%-12.60%
✔ Degrees: Undergraduate student loans
✔ Loan Term: 10, 15 years
✔ Fees: No application, origination, or prepayment penalty fees
✔ Cosigner release: Yes.

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How Do MBA Loans Work?

An MBA loan is provided to you as a student and will pay for all of your educational expenses. There are two main types of loans, federal and private. They work similarly, although there are slight differences in the application and repayment process.

Applying for a federal loan begins with the student filling out the FAFSA. While in Undergrad, the FAFSA would be filled out by your parents if you are considered a dependant, but for graduate school such as an MBA, the FAFSA is fully dependant on your finances.

Once the FAFSA has been filled out, you will receive a financial aid package from the school that contains scholarships, grants, and federal loan options.

For private loans, you will apply directly with the lender. This will require a credit check, and if you do not have good enough credit you could be required to use a cosigner.

For either federal or private loans, the money will be sent directly to the school to pay for expenses such as tuition, fees, and housing. Any leftover money will then be sent to you to pay for food, supplies, transportation, and any other necessary educational expenses.

Types of MBA Loans

There are two major types of student loans. They are federal loans and private loans. While the goal is the same (paying for education), the way they work varies slightly.

Federal

Federal loans are operated by the US government. They are preferable to private loans as they have fixed interest rates and benefits such as potential loan forgiveness. For graduate school such as an MBA, there are two federal loans available.

• Federal Direct Unsubsidized Loans - These are available to all students regardless of financial situation. No credit check is required.
• Direct PLUS Loans - These are additional loans that do require a credit and financial check. If you don’t qualify financially, you cannot receive a PLUS loan.

Federal loans are provided through the Department of Education. There are a variety of repayment plans available that can vary depending on your income and ability to pay.

Private

A private loan is provided through a private company. Some popular loan providers include SoFi, Sallie Mae, and CollegeAve.

All private loans require some sort of credit or financial check to qualify. For students that don’t have a credit history, you will likely need a cosigner to qualify.

While federal loans have one fixed rate that is offered to anyone, private loans can vary by a great deal depending on your finances. Whereas federal loans offer only a fixed rate, private lenders usually offer both fixed and variable rates.

Private loans tend to be recommended as the last option due to the usually higher rates as well as the lack of federal benefits such as loan forgiveness and income-based repayment options.

Pros & Cons of MBA Loans

As with any large expense, deciding on whether or not to take out an MBA loan should be considered very carefully.

Pros

• Great Career Opportunities - Compared to a typical bachelor’s business degree, an MBA offers more opportunities. Management positions are expected to grow by nearly 10% by 2030.
• High Earning Potential - If you can think of any CEO you know, there’s a very good chance they have an MBA. Employers across the country offer an average of $115,000 to new MBA graduates.
• Federal Benefits - If you take out a federal loan, you will have the opportunity for loan forgiveness, income-based repayment plans, and other federal benefits.

Cons

• Cost - Graduate school is expensive, and receiving an MBA is no exception. You will likely look at spending $50,000 on the low end and six figures for higher-ranked schools.
• Not Fully Necessary - While most CEOs have an MBA, today it is less necessary. Companies are looking to hire a wider variety of degree holders as it provides a more holistic view for their business, making an MBA not necessary for all paths.
• Program Strength - Receiving an MBA from a community college is much different than going to an Ivy League. The cost of getting a lower-ranked MBA may not be worth the minimal salary bump you may see.

Types of MBA Programs You Can Obtain a Loan For

There are plenty of options when it comes to receiving your MBA. Maybe you want to do it part-time while you work, maybe you prefer online classes. Either way, here are different programs you can use your MBA loan for.

Online MBA

Would you like to receive a degree from a school out of state or far away, but you don’t want to move? An online MBA is a great option. With Zoom and online classes becoming more prevalent than ever, there are plenty of schools that offer online MBA programs that will give you the same degree as in-person learning.

Part-time MBA

If you want to earn an MBA while still working your current job, a part-time MBA is likely for you. These usually involve night or weekend classes that are outside of typical working hours. While they may take a bit longer to finish, you will be receiving your income during the whole process.

Executive MBA

An executive MBA is geared towards those that already have plenty of working experience and want to take the next step. This focuses on leadership and teamwork and you’ll notice that most of your classmates will be older than your typical college students. The classes usually meet on weekends or evenings, allowing students to continue working while in school.

Certain schools offer other MBA programs, such as accelerated MBA’s that are more intensive but only take about a year. Either way, your MBA student loan will be able to pay for whatever program you decide to enroll in.