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MBA programs can be costly — the average MBA debt is over $66,000. To pay for your program, you’ll likely need to use at least some MBA loans. If you need to borrow money to finance business school, it’s important to understand your different student loan options.

3 MBA student loan options

If you’re going to business school, you have three MBA student loan options:

  1. Direct Unsubsidized Loans: As a graduate or professional degree student, you can borrow up to $20,500 per year in unsubsidized loans.
  2. Grad PLUS Loans: With Grad PLUS Loans, you can borrow up to the total cost of attendance for your program minus any other financial aid you received.
  3. Private student loans: You can work with a private lender to take out loans for the total cost of your program.

1. Direct Unsubsidized Loans

Direct Unsubsidized Loans are offered by the federal government, and they’re available to you regardless of your financial need. Unlike some other student loans, you don’t need to go through a credit check when you apply for an unsubsidized loan, and having bad credit won’t prohibit you from getting a loan.

Loans disbursed on or after July 1, 2019, and before July 1, 2020, have an interest rate of 6.08%. Plus, unsubsidized loans also have a disbursement fee. Loans disbursed on or after October 1, 2019, and before October 1, 2020, have a disbursement fee of 1.059%.

As a federal loan, unsubsidized loans are eligible for perks like income-driven repayment plans, access to loan deferment and forbearance, and the ability to qualify for Public Service Loan Forgiveness. To qualify for an unsubsidized loan, you need to complete the Free Application for Federal Student Aid (FAFSA).

2. Grad PLUS Loans

Like Direct Unsubsidized Loans, Grad PLUS Loans are a form of federal student loan; to be eligible for one, you must complete and submit the FAFSA. However, PLUS Loans require a credit check, and you may not qualify for a loan if you have an adverse credit history.

PLUS Loans allow you to borrow up to the total cost of attendance at your selected program, but they have the highest interest rate of any federal loan. Loans disbursed on or after July 1, 2019, and before July 1, 2020, have an interest rate of 7.08%. Plus, they also have a high disbursement fee. Loans disbursed on or after October 1, 2019, and before October 1, 2020, have a 4.236% disbursement fee.

3. Private student loans

When it comes to MBA loans, private student loans can make a lot of sense. If you have good credit, you could qualify for a lower interest rate than you’d get with federal student loans, helping you save money. Private student loans don’t have benefits like income-driven repayment plans or eligibility for Public Service Loan Forgiveness, but the cost-savings can be well worth the tradeoff.

Example: Let’s say you needed to take out $50,000 to pay for your MBA. If you took out Grad PLUS Loans to cover that cost, you’d have a 7.08% interest rate. Over the course of a 10-year repayment term, you’d pay a total of $69,912 — interest charges would cost you nearly $20,000.

But let’s say you opted for a private student loan instead and qualified for an interest rate of 5.30%. Over a 10-year repayment term, you’d pay a total of just $64,522. Opting for a private loan instead of a federal loan would allow you to save over $5,000.

Private student loans have other benefits, including:

  • Variable or fixed interest rate loans: With a private student loan, you can also choose between a variable rate loan and a fixed-rate loan. While fixed-rate loans have the same interest rate for the length of the loan, variable rate loans are different. They start off with lower interest rates than fixed-rate loans, but the rate can fluctuate over time.
  • No added fees: Private student loans usually don’t have extra fees. Unlike federal loans, which have disbursement fees, you won’t pay a disbursement fee or origination fee with a private loan.

If you think that a private student loan sounds like a good choice for you, check out this list of some of the best private student loans:

LenderFixed Rates From (APR)
Variable Rates From (APR)Get Rates Through Credible
ascent

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4.02%+3.31%+Get Rates
Ascent review

  • Loan terms: 5 or 10 years (Ascent Tuition loan, 15-year term also available with variable-rate loans); 10 years (Ascent Independent loan, 15-year term also available with variable-rate loans)
  • Loan amounts: $2,000 minimum, up to school's cost of attendance within $200,000 cap
  • Repayment plans: Defer payments or make interest-only or $25 minimum monthly payment while in school
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% automatic payment discount, 1% cash back graduation reward Cosigner release option: Cosigner release available after 24 months of consecutive monthly on-time payments
  • Eligibility: Ascent Tuition: Minimum FICO 600 (borrower with cosigner) and 660 (cosigner). Cosigner not required for Ascent Independent loan. No minimum income or credit score requirement for borrowers with less than two years of credit history. Borrowers with two years of credit history need 680 credit score and $24,000 annual income.
  • Loan servicer: University Account Service (UAS)
citizens

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4.40%+¹2.83%+¹Get Rates
Citizens Bank review

  • Loan terms: 5, 10, 15 years
  • Loan amounts: $1,000 minimum, school’s cost of attendance up to $150,000 for undergraduates and graduate degrees; $225,000 MBA and law; $350,000 medical school and parent loans)
  • Repayment plans: Pay immediately, pay interest only, or defer payments
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% loyalty discount available (if you have another qualifying account with Citizens Bank) as well as a 0.25% automatic payment discount
  • Cosigner release option: Cosigner release available after 36 months of consecutive monthly on-time payments
  • Eligibility: U.S. citizens or permanent residents; international students can apply with a creditworthy U.S. citizen or permanent resident cosigner
  • Loan servicer: Firstmark Services
collegeave

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4.54%+2
2.84%+2Get Rates
College Ave review

  • Loan terms: 5, 8, 10, 15 years
  • Loan amounts: Up to 100% of the school-certified cost of attendance ($1,000 minimum)
  • Repayment plans: Make full principal and interest, interest only, or flat payments while in school; or defer payments until six months after leaving school
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% rate deduction with autopay
  • Cosigner release option: Cosigner release available once more than half of the scheduled repayment period has elapsed.
  • Eligibility: Available to all U.S. residents attending an eligible undergraduate or graduate school
  • Loan servicer: University Accounting Service LLC
edvestinu

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4.50%+
3.78%+
Get Rates
EDvestinU review

  • Loan terms: 7, 10, 12, 15 and 20 years
  • Loan amounts: Minimum loan amount of $1,000 up to school-certified cost of attendance with $200,000 cap
  • Repayment plans: Full deferment, interest-only payments, and principal and interest payments
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.5% autopay discount
  • Cosigner release option: Cosigner release available after 24 months of on-time payments
  • Eligibility: Borrower or cosigner (if applicable) must have a minimum income of $30,000. Must be U.S. citizen or permanent resident, admitted to or enrolled at least half-time at any title IV degree-granting college and university when applying.
  • Loan servicer: Granite State Management & Resources (GSM&R)
invested

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4.63%+3.38%+Get Rates
INvested review

  • Loan terms: 5, 10, 15 years
  • Loan amounts: Up to 100% of school certified cost of attendance (minimum $1,001)
  • Repayment plans: Full principal and interest, interest only, and full deferment
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% autopay discount; 2% principal reduction upon graduation
  • Cosigner release option: Applications accepted after 48 consecutive monthly principal and interest payments
  • Eligibility: Indiana residents enrolled in college and U.S. residents attending an eligible Indiana school
  • Loan servicer: American Education Services
mefa

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3.95%+n/aGet Rates
INvested review

  • Loan terms: 10 or 15 years
  • Loan amounts: Minimum $1,500 (public school) or $2,000 (private school). Maximum up to school’s certified cost of attendance (minus other aid received)
  • Repayment plans: Immediate, interest-only, or deferred
  • Application fees: No application, origination, or disbursement fees
  • Discounts: None
  • Cosigner release option: Cosigner release available after 48 on-time payments and meeting credit requirements
  • Eligibility: U.S. citizen or permanent resident
  • Loan servicer: American Education Services (AES)


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4.74% - 11.35%9
3.12% - 10.54%9
Get Rates
Sallie Mae review

  • Loan terms: 5 to 15 years
  • Loan amounts: Up to 100% of the school-certified cost of attendance
  • Repayment plans: Make interest-only or fixed monthly amount while in school, or defer payments until six months after leaving school
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% autopay discount
  • Cosigner release option: Available after making 12 on-time principal and interest payments and meeting credit requirements
  • Eligibility: U.S. Citizen or U.S. Permanent Resident. Non-U.S. citizen students, including DACA students attending a school located in the U.S., are eligible to apply with a creditworthy cosigner who is a U.S. citizen or U.S. permanent resident.
  • Loan servicer: Sallie Mae


View details
3.82%
2.64%
Get Rates
SunTrust Bank review

  • Loan terms: 7, 10, or 15 years
  • Loan amounts: $1,001 - $65,000 (up to $95,000 for graduate students)
  • Repayment plans: Immediate or make partial, interest-only or deferred payments while in school.
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% autopay discount; 0.25% loyalty discount; other special rewards may include principal reduction at graduation, rate reduction for on-time payments, or zero interest for six months
  • Cosigner release option: Cosigner release after 36 months of consecutive on-time payments
  • Eligibility: U.S. citizens or permanent resident, not available to permanent residents of Iowa or Wisconsin. Union Federal Private Student Loan available to international students with an eligible cosigner who is a U.S. citizen or permanent resident
  • Loan servicer: American Education Services (AES)
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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures| 2,3College Ave Disclosures | 9Sallie Mae Disclosures | 6Discover Disclosures


Citizens Bank Student Loan Rate Disclosure

Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2019, the one-month LIBOR rate is 1.80%. Variable interest rates range from 2.83%-11.16% (2.83%-11.01% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.40%-12.19% (4.40% - 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.

Deciding which MBA student loan is right for you

When it comes to MBA loans, it’s important to research your different options so you can make an informed choice. If you’re trying to decide between federal and private MBA student loan options, think about the difference in interest rates between them, what benefits they offer, and what repayment options are available.

By doing some homework before submitting your application for a loan, you can save money and get the credential you need to advance your career.

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About the author
Kat Tretina
Kat Tretina

Kat Tretina is an authority on student loans and a contributor to Credible. Her work has appeared in publications like the Huffington Post, Money Magazine, MarketWatch, Business Insider, and more.

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