You got into business school. Congratulations! The GMAT, video essays, and admissions interviews are (thankfully) behind you. In front of you are new friends, new skills and opportunities, and maybe even new stamps in your passport.
you start packing, though, you'll need a game plan for funding your MBA
journey. CommonBond was started by MBAs, so we've been there before. Below are
some tips to help you figure out how to pay for business school and everything
Cost of Attendance
The first thing to figure out when deciding how to pay for b-school is your school's cost of attendance ("COA"). The COA includes tuition, room and board, and other fees and is the legal maximum amount you can borrow in student loans. Check out CommonBond's MBA Loan Calculator to figure out your school's COA. In addition to the COA, you'll also want to factor in other expenses and cushions like b-school travel, commuting, and relocation.
There are a number of options to consider when figuring out how to fund your MBA. These include personal savings, scholarships/fellowships, company sponsorship, federal loans (e.g. Stafford, Direct Grad PLUS), private loans, and family loans, among others. Funding options carry different benefits and tradeoffs. Some loans offer benefits like deferment, forbearance, employment protections, or no pre-payment penalties. Additionally, you'll want to assess different loan provider features like interest rates, customer service, ease of process, reputation, and network/community.
How you fund your MBA is highly specific to your personal situation. Here are just some additional considerations as you evaluate options:
- Safety net retained: How much of your savings/emergency fund should you spend?
- Expected future income: Does your debt load and type make sense given your expected post-MBA income? Can your estimated post-MBA salary support your monthly loan payments?
- Future plans: Are you
planning to start a business, buy a home, or put a large amount of money toward
are two types of federal loans available to MBAs:
- Direct unsubsidized loans: For graduate loans disbursed on or after July 1, 2018, this loan carries a 6.64% APR fixed rate.¹ You can borrow up to $20,500 annually in direct unsubsidized loans.
- Direct PLUS Program: For graduate loans disbursed on or after July 1, 2018, this loan carries an 8.07% APR fixed rate.² You can borrow up to the cost of attendance minus other financial aid received.
Federal loans carry with them certain government protections such as income-based repayment. If you're planning to work for the U.S. government or a non-profit after b-school, you may also qualify for the government's public service loan forgiveness plan.
Private loans are another type of funding available to MBA students and may carry lower rates compared to federal loans. They also feature some of their own unique benefits. Most private lenders offer both fixed- and variable-rate options. With a fixed rate, your interest rate and monthly payments are fixed over the life of the loan; with a variable rate, your interest rate and subsequent monthly payments may fluctuate over time based on market dynamics. At CommonBond, our MBA Student Loan starts at 6.07% APR and is available without a cosigner.³
loans may also offer benefits beyond lower rates. For example, all CommonBond
members get access to our award-winning customer care team and if borrowers run
into financial difficulties, the CommonBridge protection program lets them temporarily
When to Apply
you're taking out loans for b-school, you'll want to lock down your funding at
least a month before classes start. If you want to get started today with
CommonBond and knock one more thing off your pre-MBA "to-do" list, apply for an
MBA loan here.
If you have any questions throughout the process, feel free to reach out to our Care Team.
1 The Annual Percentage Rate (APR) is based off a rate of 6.595%, and assumes a one-time capitalization of interest at the end of a deferment period, a 1.07% origination fee, a single disbursement, and full deferment (in which there is a 21-month in-school deferment and a six-month grace period).
2 The Annual Percentage Rate (APR) is based off a rate of 7.595%, and assumes a one-time capitalization of interest at the end of a deferment period, a 4.26% origination fee, a single disbursement, and full deferment (in which there is a 21-month in-school deferment and a six-month grace period).