Three Ways To Fund Your MBA

The MBA is a big investment. However, there are many resources available to help you pay for your degree.

Stacy Blackman, of Stacy Blackman Consulting, recently discussed different options for MBA funding.

SCHOLARSHIPS AND FELLOWSHIPS

Scholarships are one of the main ways you can help fund your MBA.

However, it’s important to note that there are a few steps to applying.

“Learn how your school makes scholarship offers,” Blackman writes. “For instance, you may need to prepare a separate application to be eligible. You may also have to submit a different application for each fellowship or scholarship. Don’t lose out because of a missed deadline. Look beyond your business school, too, to organizations like the Forte Foundation or Consortium for Graduate Study in Management that offer highly valuable scholarships for MBA students.”

SPONSORSHIP

While company-sponsored MBAs are increasingly rare, there are still a number of companies that will shell out money for employees to gain their degree.

Blackman advises MBAs to consider the obligations of company-sponsored MBAs and whether or not it is worth it.

“Sponsorship often comes with an obligation to return to the company after you complete your degree,” Blackman writes. “Therefore, you’ll want to take a step back and assess whether you’re absolutely confident you want to return. Breaking such an agreement after you earn the degree can lead to strained relationships with former colleagues. It can also leave you with a mountain of unforeseen debt.”

RETIREMENT SAVINGS

One area that is less obvious as an MBA funding source, according to Blackman, is retirement savings.

“First and foremost, you should always think hard before touching money set aside for retirement,” Blackman writes. “However, those who have saved aggressively already and plan to continue doing so may find it worth it to take some money out for the short term.”

It’s a strategy that, if you plan well enough, may be worthwhile.

“You’re exempt from the 10 percent penalty for early withdrawals when you put the funds toward qualified higher education expenses, of which attending business school is one,” Blackman writes. “You’ll still face income tax on this money. But the tax burden will likely be less when you’re in a graduate student tax bracket.”

Sources: Stacy Blackman Consulting, Poets & Quants