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It’s easy to get overwhelmed with all the information about student loans and financing for higher education. But financing your Masters in Business Administration (MBA) is quite simple, as you’ll see in this MBA guide.
The best MBA student loans you’ll find are federal student loans, primarily because they offer the potential for student loan forgiveness. Since federal student loans, grants, and scholarships often fall short of the costs associated with an MBA degree, we’ll show you five of the best MBA private student loan options.
Here’s what to know about federal and private MBA student loans, how to qualify, and some tips for earning your MBA while working full-time:
- 4 best MBA private student loans
- Other private MBA student loans to consider
- Federal financial aid for MBA students
- MBA student loan calculator
- How to finance an MBA degree
- How to qualify for private MBA student loans
- Is an MBA worth it?
- Tips for getting an MBA while working full-time
4 best MBA private student loans
You can find a few types of student loans to help cover the cost of an MBA, including federal and private student loans.
After you’ve exhausted your federal student loan options, as well as any scholarships or grants available to you, private student loans could help fill any financial gaps left over.
If you decide to take out a private student loan, be sure to consider as many lenders as possible to find the right loan for you.
Here are Credible’s partner lenders that offer private MBA student loans:
|Lender||Fixed rates from (APR)||Variable rates from (APR)||Loan terms (years)||Loan amounts|
|3.15%+||0.98%+||5, 7, 10, 12, 15, 20 (depending on loan type)||$2,001 - $200,000|
|5, 10, 15||$1,000 to $350,000 (depending on degree)|
||0.94%+2,3||5, 8, 10, 15||$1,000 up to 100% of the school-certified cost of attendance|
|3.75% - 13.72% APR9||2.0% - 12.35% APR9||5, 15||Up to 100% of the school-certified cost of attendance|
Checking rates won’t affect your credit
Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Disclosures | 2,3College Ave Disclosures | 7EDvestinU Disclosures | 8INvestEd Disclosures | 9Sallie Mae Disclosures
Ascent offers three types of student loans for students who need extra funding to cross the finish line with their MBA. Loans with variable interest rates range from 1.79% to 11.12%, while fixed-rate student loans come with interest rates from 4.93% to 14.54%. Ascent offers flexible repayment plans that start nine months after you leave school and range from seven to 15 years.
- Offers three types of student loans
- No fees
- Offers 1% cash back graduation reward
- International students must have a cosigner with good credit to be eligible
- Credit score can’t be below 540, even if your consigner meets the standard
- Must make 24 on-time principal and interest payments before cosigner release
Citizens offers several types of private student loans designed for students pursuing graduate and professional degrees, such as MBAs. With Citizens, you can borrow $1,000 to $225,000 for an MBA with repayment terms ranging from five to 15 years.
- 0.25% autopay discount
- 0.25% loyalty discount
- Flexible repayment options
- Might be hard to qualify if you don’t have good credit
- 15-year terms not available to parent borrowers
- Long cosigner release period (36 months)
Learn More: Best Private Student Loans
If you need to borrow a large amount, College Ave might be a good choice — you can borrow $1,000 up to 100% of your school-certified cost of attendance (minus other aid received). College Ave MBA loans come with terms ranging from five to 15 years.
- Can borrow up to 100% of your school-certified cost of attendance (minus other aid received)
- Multiple plans for in-school repayment
- 0.25% autopay discount
- Potentially long cosigner release period (can’t apply until more than half of the scheduled repayment period has elapsed)
- Doesn’t disclose minimum income or credit requirements
- Might be hard to qualify for cosigner release (24 most recent payments must have been on time, and your income for the last two years must be more than twice your outstanding loan balance)
Sallie Mae might be another good choice if you’re looking to borrow a large amount — you can borrow $1,000 up to 100% of your school-certified cost of attendance. Repayment terms on Sallie Mae loans range from five to 15 years.
- Can borrow up to 100% of your school-certified cost of attendance (minus other aid received)
- Can apply for cosigner release after just 12 months of consecutive, on-time payments
- 0.50% interest rate reduction on graduate and professional loans when making interest-only payments during school
- Doesn’t disclose minimum income or credit score requirements
- While part-time students are eligible, you must be enrolled at least half-time to finance personal expenses
- Charges late fees (5% of the past due amount with a maximum of $25)
To find the “best companies,” Credible looked at loan and lender data points from 10 categories to give you a well-rounded perspective on each of our partner lenders. Here’s what we considered:
- Interest rates
- Repayment terms
- Repayment options
- Customer service availability
- Eligibility criteria
- Cosigner release options
- Whether the minimum credit score is available publicly
- Whether consumers could request rates with a soft credit check
Other private MBA student loans to consider
Keep in mind that these lenders are not offered through Credible, so you won’t be able to easily compare your rates with them on the Credible platform like you can our partner lenders.
(depending on degree type)
Federal financial aid for MBA students
Federal student loans are some of the best MBA loans because they give you access to income-driven repayment plans and the potential for student loan forgiveness. Here’s a breakdown of your federal student loan options:
Direct Unsubsidized Loans
Direct Unsubsidized Loans are available to students attending graduate and professional programs, regardless of financial need. Unlike with Direct Subsidized Loans, you’re responsible for all interest that accrues on unsubsidized loans — which means you could end up with a higher balance to repay.
Here are a few important points about Direct Unsubsidized Loans to keep in mind:
- Interest rates: 6.54% for graduate and professional students for the 2022-23 academic year
- Loan limits: Up to $20,500 each year ($138,500 aggregate limit between both undergraduate and graduate student loans)
Note that you must be enrolled at least half-time at a school that participates in the Direct Loan program to potentially qualify for a Direct Unsubsidized Loan.
Grad PLUS Loans
Another federal student loan option for MBA students is a Grad PLUS Loan. While Direct Unsubsidized Loans come with lower student loan limits, you might be able to borrow up to your school’s cost of attendance with Grad PLUS Loans (minus any other aid you’ve received). But PLUS Loans typically have higher interest rates than unsubsidized loans.
Here are a few important points about Grad PLUS Loans to keep in mind:
- Interest rates: 7.54% for the 2022-23 academic year
- Loan limits: Up to your school’s cost of attendance (minus other financial aid received)
Additionally, you’ll have to undergo a credit check and you can’t have an adverse credit history — such as a foreclosure, bankruptcy, repossession, or tax lien. But if you have a cosigner with good credit or are able to prove extenuating circumstances, you might still be able to qualify.
MBA student loan calculator
A student loan calculator can be a valuable tool to help you get a clearer picture of the costs of pursuing your MBA.
When deciding how much you need to borrow, don’t forget to factor in any non-tuition costs you’ll need to cover, such as room and board, books, and transportation. Your school’s website or financial aid department can be a great resource to help you determine these costs. For example, the University of Georgia website provides potential students with a number of cost estimates, shown in the below table:
|On campus||Off campus|
|Books and supplies||$648||$648|
|Miscellaneous living expenses||$3,292||$4,168|
|Source: University of Georgia|
Find out how much you’ll owe over the life of your federal or private student loans using our student loan calculator below.[STUDENT LOAN CALCULATOR]
How to finance an MBA degree
If you’re considering graduate school, follow these steps to help make the next few years a little more affordable:
- Decide if you want to attend part-time or full-time. Attending a full-time MBA program can be demanding, especially if you plan to work while going to school or have a family to take care of. If you attend part-time, you’ll have a lower cost to cover each semester — but it’ll also take longer to graduate.
- Consider tuition reimbursement or other programs. Some employers provide partial or even full tuition reimbursement for employees who want to earn their MBA. Other options to look into include any fellowships offered by your school — a fellowship typically includes a job or volunteer duties in exchange for a stipend.
- Apply for MBA grants and scholarships. These types of aid can be a great way to pay for grad school since they don’t have to be repaid, unlike student loans. Be sure to dedicate time to researching and applying for both college grants and scholarships. You might find grants or scholarships offered locally and nationally by nonprofit organizations, businesses, or professional organizations in your industry.
- Take out federal student loans. Be sure to fill out the FAFSA to apply for any federal financial aid or federal student loans you might be eligible for, such as Direct Unsubsidized Loans or Grad PLUS Loans. Your FAFSA results might also qualify you for school-based scholarships.
- Use private student loans to fill in the gaps. If you’ve exhausted your grant, scholarship, and federal student loan options, private student loans could help fill any financial gaps left over. Before you borrow, be sure to consider as many private lenders as you can to find the right loan for your needs.
Deferment options for MBA loans
You might be able to defer student loans you took out for undergraduate studies while you pursue your MBA.
- Federal student loans can be deferred if you’re attending an eligible college or career school at least half-time. You can also defer Grad PLUS Loans for an additional six months after you leave school or drop below half-time enrollment.
- Private student loans can sometimes be deferred if you return to graduate school, depending on the lender. If you have private loans, check with your lender to see what options might be available to you.
Learn More: Taking Out Student Loans Without a Cosigner
How to qualify for private MBA student loans
While eligibility requirements for private MBA loans vary between lenders, you’ll find a few common qualifying criteria, including: :
- Good credit: Your credit score plays a major role in determining your approval odds, as well as the interest rate and terms you’ll receive. You’ll typically need good to excellent credit to qualify for a private student loan.
- Verifiable income: Lenders want to see that you’ll be able to afford your future loan payments. Some have specific minimum income requirements while others don’t — but in either case, the lender will likely ask to see proof of income, such as pay stubs or W-2s.
- Low debt-to-income ratio: Your debt-to-income (DTI) ratio is the percentage you get when you divide all your monthly debt payments by your gross monthly income. You’ll typically need a DTI ratio of 50% or less — though some lenders might require a lower percentage than this.
Is an MBA worth it?
An MBA may be worth your effort and money if you plan to work in business or management or if you want to start your own company. But an MBA may not be necessary if you work in other industries, unless you intend to pursue a management position or a role requiring strong leadership.
Average MBA student loan debt
While earning your MBA might provide attractive employment opportunities, it can also be expensive — the average grad school debt for an MBA is $66,300, according to data from the National Center for Education Statistics. On top of that, nearly half of MBA graduates owe $100,000 or more for their MBA, according to a 2018 Bloomberg study.
Even with a handsome executive salary after graduation, repaying substantial student loan debt can be challenging. Consider taking steps to minimize your student loan debt while you’re in school, like applying for scholarships and grants, testing out of classes, and working part-time.
MBA salary by school
The Bureau of Labor Statistics data lists the average salary for top executives in 2021 at $98,980. Similarly, the Graduate Management Admission Council projected 2021 median starting salaries for MBA graduates to be $115,000 compared to only $55,000 for graduates with new bachelor’s degrees. That’s a substantial increase that more than offsets the average cost of an MBA degree.
Keep in mind that you might earn more or less depending on your school, employer, and other factors. For example, your average starting salary may be higher if you graduate from one of the best MBA programs. Here’s an idea of what you might expect to earn after graduating from a top business school or university:
|Business school||Average starting median salary|
|Stanford Graduate School of Business||$158,400|
|The University of Chicago Booth School of Business||$155,000|
|Wharton School of the University of Pennsylvania||$155,000|
|Northwestern University Kellogg School of Management||$150,000|
|Harvard Business School||$150,000|
|Source: Poets & Quants: MBA Salaries & Bonuses At The Top 25 B-Schools|
Best undergraduate degree for an MBA
While earning a business degree is the most common path for MBA applicants, it doesn’t necessarily mean it’s the best undergraduate degree for an MBA. While business degrees are still a practical option for job readiness, many admissions officers are looking to assemble a class of graduate students with diverse skills and backgrounds other than business.
Deciding on the best bachelor’s degree for you will depend on your interests, career objectives, and business school. To determine the best undergraduate degree for admission to an MBA program, consider the class profile of the business school you wish to attend.
Tips for getting an MBA while working full-time
Getting an MBA while working your full-time job is a challenging endeavor. Still, you can take steps to help you balance your time, such as:
- Consider an accredited online MBA program. Many MBA programs are designed specifically for working professionals with the same curriculum. If you’re interested in this option, review accredited MBA programs compiled by the Association to Advance Collegiate School of Business. It may be easier to create a schedule around your job if you don’t have to travel to a campus for several hours of classes.
- Discuss your intentions with your employer. While talking to your employer about your plans is a respectful gesture, it can also be beneficial. You can also talk with your employers about schedule flexibility. Perhaps you could work extra hours on some days in exchange for time off on other days. Many employers even offer programs to help pay tuition for their employees.
- Study efficiently. When time is of the essence, every moment counts. Keep your books with you so you can study when you have an unexpected moment of free time. Study at work during your lunch hour and get tutoring when you need it. A one-hour tutoring session covering a challenging concept may save you countless hours trying to figure it out on your own.
- Follow a schedule. Setting a schedule that accounts for your education is crucial to staying organized and being more efficient. Try to think about when you’re the most productive and schedule time accordingly. Depending on what works best for you, you might set aside time before work to complete your coursework or wait until the evening when your kids are asleep.
Pursuing your MBA degree while working is challenging, but you could complete your program in roughly two years. And with your degree in hand, you could be in line for a rewarding leadership role and significant salary boost.
If you need to finance business school with a private MBA loan, Credible can help. Just fill out a single form, and within two minutes, you can review and compare prequalified rates from multiple lenders. The service is free, and it won’t affect your credit.
Angela Brown contributed to the reporting for this article.