Yahoo Finance 4 Ways to Get Financially Ready for Business School
Behind every great degree is often a large bill, and with business school programs, it's no different.
Many MBA programs cost students $40,000 a year or more for tuition, and students also have to come up with the money for housing, food and other expenses.
Financial issues are the top reservation among prospective business school students, according to an April survey by the Graduate Management Admission Council. According to the survey, "48 percent of candidates say attending business school requires more money than they have available and 44 percent are hesitant about taking on a large financial debt." That's still a smaller proportion of prospective students than in 2010.
Applicants who are low on cash or nervous about funding their MBA with loans can start financially preparing for school a year or longer in advance, experts say.
"Do an inventory of your current debts and income," says Monica Moody Moore, the assistant dean of admissions and financial aid at the Carey Business School at Johns Hopkins University in Baltimore. Going through this exercise can give prospective students an idea of what they can actually afford.
[Understand what options are available to help pay for an MBA.]
Consolidating undergrad loans, cutting back on leisure activities or increasing personal savings may help prospective students get ready to pay for an MBA program, experts say. But more can be done.
Below experts share four tips for prospective MBA students who are looking to make school a more affordable investment.
1. Build a relationship with the admissions office: Most admissions staff members can determine where money is allotted, says Ted Evans, an admissions manager at Case Western Reserve University's Weatherhead School of Management in Ohio.
Applicants should be candid about their financial situations and show a concerted interest in the university when speaking with someone from admissions, he says. Prospective students can develop a relationship with a staff member through email, but if possible they should visit campus at least once to let the school connect their names with their faces.
Fostering a relationship with an admissions officer can make it easier for applicants to ask and receive money, Evans says.
"Now you have a champion within the system," he says.
2. Ask smart questions about scholarships: Applicants should research what kind of scholarships are available from the schools to which they are applying and what kind of applicants receive them, says Moore from Johns Hopkins.
They'll sometimes make the mistake of assuming that because their GMAT scores and GPA line up with a school's profile for admitted students that they're also eligible for scholarships, she says. Applicants should ask, Moore says, "What's the profile of those who earned money?" and "What's the median of what they earned?" to gauge if their stats will put them in the running for scholarships.
[Find ways to become a good candidate for MBA scholarships.]
3. Plan for pricey extracurricular activities: While figuring out how much money they'll need for tuition and fees, housing, food and utilities, MBA hopefuls should also budget for school activities, says David Klein, co-founder and CEO of CommonBond, which provides loans and refinancing options for mostly students and alumni of graduate school programs, among other resources.
There are MBA conferences, leadership retreats, business competitions and other activities that may require students to travel or spend in other ways, he says.
"I would absolutely suggest that somebody think through the kinds of things that they want to do while they're an MBA. Understand the cost of those things and budget for them," says Klein, who recently attended the Wharton School at University of Pennsylvania before launching CommonBond.
If applicants are thinking of joining the school's consulting club, for example, they should contact the club's president and ask what costs might they incur as members, says Evans.
[Learn the steps to take to decide how much to borrow for an MBA.]
4. Remember the deposit: Even if applicants are awarded scholarship money, they may still have to put down some of their own cash to hold their seats, says Evans.
Accepted students might be asked to pay a few thousand dollars within weeks of admittance as their deposit, Evans says. And they may not get the deposit refunded until several months later.
"You may deposit in May or April, and you may not get that deposit back until after the first day of classes in August or September," says Evans.
Prospective students can and should ask how much the deposit is for admitted students, he says.
Budgeting for an MBA is just like budgeting for a car or any other major purchase says, Moody. Applicants should think through how they'll pay for the degree from start to finish,
"If I were buying a home I would think of the full cost of the home and not just what my first month's mortgage is," she says. "I think it's just a part of doing homework and being well prepared for the journey of graduate education."
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