written by Galen Erickson for Touch MBA

You’re set on getting an MBA. Now, onto one of the most important decisions you’ll make in the entire MBA process — how to pay for it. There are a wide variety of resources detailing MBA funding sources, including loans and scholarships. However, it can be tough to understand how all these sources fit together. Fortunately, Touch MBA is here to help. Welcome to our guide on how to finance your MBA and get the best MBA student loans. Use the table of contents below to jump to specific sections, or simply continue reading to develop your own plan. 

The Best Loans for MBA Students

If you don’t have time to read our guide, here are our recommendations:

Best Loan Rates for US MBA Programs: Juno, which offers US citizens AND international students with cosigners the best private lender rates, guaranteed

Best Benchmark Rates for US MBA Students: Federal Unsubsidized and Federal Direct Plus Loans, which usually have lower interest rates than private lenders and don’t collect interest while you’re in school

Best for International MBA Students without a Cosigner: MPOWER Financing for MBAs attending US and Canadian business schools, and Prodigy Finance for global top-ranked business schools

Table of Contents: How to Finance Your MBA

1. Reduce the cost of your MBA loan

2. Understand the terms of your student loan

3. Tips for international students

4. Build a plan to evaluate your loan options

5. US Government loans

6. Private loans

Best standard private loans for MBA students

Best multi-year approval loan for MBA students

Best loans for international MBA students

Best MBA loans for an extended grace period (9 months)

7. MBA student loan success stories

8. Final things to consider

9. MBA student loan resources

1. Reduce the cost of your MBA loan

Before taking out loans, understand how to reduce the out-of-pocket cost of your MBA.

The first step in financing your MBA is identifying funding sources which do not require repayment. These sources — including scholarships, employer support, and personal savings — will reduce the size of your loans. 

Scholarships

Scholarships include school-specific merit scholarships, grants and fellowships. Check with school financial aid offices to identify scholarships for which you are eligible. However, don’t limit yourself to school-provided scholarships — a wide range of organizations provide financial support for students from specific groups, identities, and backgrounds. Examples include The Consortium, which awards full-tuition fellowships to underrepresented minorities and those that promote diversity and inclusion, Forte MBA Fellowships for women, and a variety of other European funding sources which use European Union funding to bring students from across the globe to European universities.

For students interested in pursuing an MBA in the United States, Sallie Mae and Fastweb provides access to a free registry of graduate school scholarship opportunities.

Additionally, many schools will provide a list of external funding sources — for example, here is Harvard Business School’s external funding site. You can also check scholarship and loan funding options by country on Insead’s external funding page.  

Employer support

Certain employers may help pay for your MBA. However, these programs usually require participants to return to the company after finishing the MBA. Check with your human resources office to learn how your employer might help fund graduate school. 

Personal savings

Though it may be hard to stomach, using personal savings to help pay the up-front cost of an MBA will reduce the total cost. This is because your total loans will be smaller, leading to reduced interest payments. 

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2. Understand the terms of your student loan

You’ve applied and hopefully received some scholarships, and now know the total out-of-pocket cost of your MBA. Depending on your background and the location of your MBA program, you might qualify for a variety of government-funded and private loans. Here are a few terms you should know when evaluating student loans:

• Interest rates: One of the most important factors when determining the final cost of your MBA are the interest rates of your loans. An interest rate is the proportion of a loan that is charged to the borrower, and most interest rates are expressed as the annual percentage of the outstanding loan. A higher interest rate means that you’ll ultimately repay more money than you initially borrowed. Since interest will continue to accrue until you pay off your loan, you should use a student loan calculator to estimate your monthly loan payments. 
• Annual percentage rate (APR): The APR reflects the total percentage rate of the costs you’ll pay as a portion of your loan. APR includes the interest rate, detailed above, but will also include any one-time origination fees or loan fees associated with your student loan. Because APR includes these origination or loan fees, it is a good way to generally understand the total cost of your loan. Make sure to check with your student loan provider to understand your personal APR. 
• Fixed interest rates: A fixed interest rate simply means that the interest rate will stay the same for the entirety of the loan. The primary benefit of a fixed interest rate is that you can accurately project how much interest you will pay on your loan, making planning ahead easy. United States federal loans always have fixed interest rates, while private loans offer fixed interest rates as well as variable interest rates. 
• Variable interest rates: A variable interest rate loan means that the interest rate can change. This might be good — at times, your variable interest rate will be less than a fixed interest rate. However, it is also possible that the variable interest rate will end up greater than fixed interest rates, meaning that you end up paying more for your MBA. Depending on your loan agreement, the variable interest rate could change monthly, quarterly, or annually. Variable interest rates often are linked to interest rate benchmarks such as the prime rate, which banks use when determining credit card rates. If the prime rate or other benchmark rates change, so will your student loan interest rate — for better or for worse. Only private loans offer variable interest rates. 
• A loan term refers to the length of time it will take to repay your loan based on a standardized monthly loan payment.  
• A loan fee, sometimes referred to as an origination fee or administration fee, is a one-time fixed fee which a lender charges for the service of providing you a loan. When evaluating loans, you should identify if a lender charges a loan fee and understand how this will impact the cost of your MBA. For example, as of Feb 12, 2022, the United States federal loans currently have loan fees of 1.057%, and a private loan provider like Prodigy Finance charges 5% for loan fees. 
• A grace period refers to the period after graduating during which you do not need to make payments on your student loans. Most grace periods are six months, but we discuss loans with longer grace periods in more detail below. 

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3. Tips for international students

Funding an MBA can be particularly difficult for international students studying at American universities. Many American lenders require applicants to provide a credit history, which may not be possible for individuals of certain backgrounds. Another requirement could be finding a cosigner for your student loans, which means finding someone who is willing to trust you with their financial well-being. However, some firms are now dropping these requirements, betting that lending to driven international students is a good idea. Check out our section on Prodigy Finance and MPower Financing below for two examples of companies focusing on international students. 

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4. Build a plan to evaluate your loan options

Now that you have a basic understanding of the important vocabulary surrounding student loans, it’s time to take a look at what’s available. After subtracting any scholarships or grants from your total tuition, you should have a precise understanding of how much loan funding you’ll need to cover your MBA. 

You can use a student loan repayment calculator to compare different loans. There are a wide variety of loan calculators, but we’ve picked two that can be helpful based on your situation. If you already have an idea for the size and number of loans you’ll need to take out, the Student Loan Calculator at smartasset.com is straightforward and easy to use. You can adjust the calculator for loan size, interest rate, and loan term to see what your monthly payments will look like and how much you’ll be paying for your MBA in total. If you’re still in the beginning stages of understanding how you’ll fund your MBA, Juno’s Private vs Federal Loan Comparison Tool will help you plan out your funding needs. 

At this point, it is possible that the cost of your MBA reaches well into the six figures. Take a bit of time to research your target industries and the salaries in those industries — this way you can forecast how much of your monthly salary would go towards paying off your student loans.  If you understand this and are set on getting your MBA, then it’s time to begin looking at the different loan options. 

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5. US Government loans

For American students, loans from the United States federal government are a good first option. These loans generally have low interest rates, and interest does not compound while the borrower is in school or in a deferment period. Additionally, federal loans offer flexible repayment plans, such as a pay-as-you earn option or some loan forgiveness for borrowers who enter the public sector after completing their MBA. 

The United States federal government offers two types of loans for graduate students. 

Direct unsubsidized loans are available for all graduate students and do not require any demonstration of financial need. To apply, you must fill out a Free Application for Federal Student Aid (FAFSA) form, which will be submitted to your graduate school. Your school is responsible for determining the amount of direct unsubsidized loans you may receive, but there is an annual limit of USD 20,500 in federal direct unsubsidized loans. 

Direct Unsubsidized Loans (as of September 2023):

• Interest Rate: 5.50-7.05%.
• Loan fee: 1.057%.
• Lending limit: USD 20,500 per year. 
• Loan terms: Between ten and 20 years, depending on which repayment plan you choose or are assigned when you begin repaying your direct unsubsidized loan.
• Grace period: Six months.

Unlike direct unsubsidized loans, Direct PLUS Loans do not have an annual limit. However, Direct PLUS Loans have more stringent credit history requirements, including passing a credit check. To apply for the Direct Plus Loan, you must first complete the United States federal government’s FAFSA form. Some graduate schools then ask students to personally apply for Direct Plus Loans online, while others have different application processes. 

Direct Plus Loan (as of September 2023):

• Interest rate: 7.54%. 
• Loan fee: 4.228%.
• Lending limit: The cost of tuition — determined by your school — minus any other financial aid you receive. 
• Loan terms: Between 10 and 25 years, depending on which repayment plan you choose or are assigned.
• Grace period: Six months.

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6. Private loans

After receiving notice of your federal loan figures, funding the remainder of your MBA will likely fall to private loans. The private loan selection can be overwhelming. Here are a few things to keep in mind as you narrow down your options:

• Your credit score will play an outsized role in your ability to receive favorable loan conditions. Just like with credit cards, lenders are more willing to offer low interest rates and other benefits if you have a history of successfully paying your debts. If you don’t have a good credit score and are unable to put forward a creditworthy co-signer, it may be tough to get a loan with a reasonable interest rate, or any private loan at all. 
• Cosigners take on significant risk when adding their name to a private student loan. If you fail to make a payment, your co-signer’s credit score could take a hit. Additionally, if for some reason you cannot repay your loan — even if you die or are disabled — your co-signer may be responsible for repaying the loan. Make sure you and your co-signer understand this. 
• Unlike federal loans, private loans begin accruing interest even while you are in school or under deferment. 
• Private loans are generally less forgiving than federal government loans. It doesn’t matter if you’re working for a bank or the Peace Corps — you’ll need to repay your debt according to your loan agreement. Some private lenders offer deferment and forbearance options, but these options will generally not be as lenient as those offered by the federal government. Additionally, missing even one payment on a private student loan could lead to default, which could harm your credit score, result in expensive fees, or prevent you from taking out more loans to finance your education. 

With that in mind, here are a variety of private loans which Touch MBA has selected based on different circumstances. It doesn’t matter if you’re looking for low interest rates, are an international student, or expecting a longer-than-usual job search after finishing your MBA — we’ve got you covered. We’ve tried to include as much information as possible, but you should do plenty of research to identify what loans might be best for you and confirm the details before taking out a loan. 

Best standard private loans for MBA students

If you’re an American attending a US-based school or an international student with a cosigner, your first priority is likely finding a loan with the lowest possible interest rate, lowering the cost of your MBA. Two loan providers with MBA-focused loans are Sallie Mae and Juno, detailed below. We recommend these two based on their low loan fees and interest rates. If you have a strong credit score, we recommend Juno for the lowest possible interest rates.

Juno MBA student loan

Juno (formerly LeverEdge) offers US citizens and international students with cosigners the best rates, guaranteed. They are able to do this using group bargaining power. Their loan rates are cheaper than federal grad PLUS loans.

Sallie Mae MBA student loan (as of September 2023):

• Interest rates
  • Fixed rate:  4.50 – 15.49%.
  • Variable rate: 6.37 – 16.70%.
• Loan fee: None.
• APR: Same as interest rates – no loan fees to account for. 
• Lending limit: None.
• Loan terms: 15 years.
• Grace period: Six months.

Best multi-year approval loan

Applying for student loans can be a time-intensive process. Certain creditors recognize that MBA students usually need two full years of loans, and respond with multi-year approvals. This means that you apply when you begin your MBA, and if you are approved you can continue to receive the same loan terms for future years of study. We’ve picked CitizensOne as the best multi-year approval loan because they offer a loan which caters to MBA students and is available to eligible international students with a US citizen or permanent resident co-signer. 

Citizens One student loan for MBA Students (as of September 2023):

• Interest rates
  • Fixed rate: 6.27 – 12.00%.
  • Variable rate: 4.99 – 10.43%
• Loan fee: None.
• APR: Same as interest rates. 
• Lending limit: USD $225,000 total. 
• Loan terms: Five, 10 and 15 year terms. 
• Grace period: Up to six months. 

Best international student loans

It can be difficult for international students to receive student loans from local banks, which usually determine their lending decisions on credit history. However, certain firms are now focusing on borderless student lending with an eye towards a student’s future earning potential. Prodigy Finance sticks out in particular, offering loans to citizens of over 150 countries. Though the interest and administrative rates with Prodigy Finance are higher than other offerings, this remains a strong option for international students who could not otherwise receive student loans.

Prodigy Finance (as of September 2023):

• Interest rates: Prodigy Finance’s student loans are made up of a base rate as well as a fixed margin. These two are added together to determine the final interest rate of the loan.
  • Fixed margin: starting from 5%.
  • Base rate: Three-month CME Term SOFR, currently 5.30%.
• APR: Not published (the average APR for student loans is 14.88%). 
• Loan fee: 5% one-time administration fee upon approval of the loan. This fee is spread out evenly across all subsequent loan payments. 
• Lending limit: Depends on nationality and intended graduate degree. 
• Loan terms: Seven, 10 and 15 year terms. 
• Grace period: Up to six months. 

Another great resource for international students is MPOWER Financing. MPOWER provides loans to international students, but also provides visa application support letters for all loanees, resume reviews, and networking opportunities. In short, MPOWER Finance is hoping to become a one-stop-shop to serve international students across the entire MBA financing process. 

MPOWER Financing (as of September 2023):

• Interest rates: For international graduate students, MPOWER Finance provides fixed-rate loans with an interest rate of 12.99%. 
• Loan fee: 5% one-time administration fee upon approval of the loan. This fee is spread out evenly across all subsequent loan payments. 
• APR: 13.98%.
• Lending limit: USD 50,000 per loan and 100,000 lifetime limit.
• Loan terms: 10-year term.
• Grace period: Up to six months. 

(if you finance with MPOWER, please consider using this link before signing up to save $100 off your MPOWER loan)

Best MBA loan for an extended grace period (9 months vs usual 6 months)

Most student loans offer a six-month grace period, meaning you do not need to make payments for six months after graduation. This is often a time when students are looking for jobs, moving to new cities, or otherwise trying to get settled before focusing on paying off student loans. However, for some, such as students who want to get into a less traditional industry or move to a new country after graduating, a nine-month grace period can provide a bit more wiggle room after graduation. Touch MBA selected Earnest for their good benefits and nine-month grace period. Ascent is an attractive option for those with lower credit scores in the 500s.

Earnest student loans (as of September 2023):

• Interest rates (has 100% lowest rate match guarantee, too):
  • Fixed rate: Between 4.45 – 14.90%.
  • Variable rate: Between 4.99 – 15.30%. 
• Loan fee: No loan fee. 
• APR: Same as interest rate. 
• Lending limit: Up to 100 percent of cost of attendance, USD 350,000
• Loan terms: 5 to 20 year terms.
• Grace period: Up to nine months. 

Ascent student loans (as of September 2023):

• Interest rates:
  • Fixed rate: Between 5.48 – 15.66%.
  • Variable rate: Between 7.05 – 15.94%. 
• Loan fee: No loan fee. 
• APR: Same as interest rate + 1% cash back opportunity
• Lending limit: Up to 100 percent of cost of attendance, USD 200,000.
• Loan terms: 5 to 20 year terms.
• Grace period: Up to nine months. 

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7. MBA student loan success stories

All this talk of loans and interest rates might be intimidating, and it’s important to consider the costs and benefits of leveraging debt for a MBA. However, thousands of prospective MBA students have been in your shoes, and there are plenty of success stories. 

As a first year at Harvard Business School, Nikhil Agarwal helped 700 MBA students from 10 business schools save over $14,000 USD on their loans through collective bargaining. Since then, Juno has helped thousands of students access over $700M in loans at preferential rates and terms.

Consider Phil DeGisi, documented at thecollegeinvestor.com and featured on our Touch MBA podcast. Phil attended Dartmouth for his MBA and graduated with six figures of student debt. After moving to a new city for his first post-MBA job, Phil focused on finding inexpensive housing, saying that “there is no quicker way to paint yourself into a financial corner than to overextend yourself with your living expenses.” He also ensured that his student loans were the first thing paid every month, setting up an automatic withdrawal from his debit account – which had the added benefit of reducing the interest rate on his student loans by 0.25 percent. He also used bonuses from work to pay off large chunks of debt once or twice a year, and ultimately paid off his student loans in six years – four years less than his original ten-year loan term.

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8. Final things to consider 

After beginning and even finishing your MBA, don’t stop looking for funding sources. Many schools offer scholarships and grants as a reward for excelling in the classroom, while postgrad grants may be available to help pay off student debt. Maintain a dialogue with the financial aid department at your MBA program to ensure you’re the first to apply for any new sources of funding which might pop up!

Be aware of your loan obligations and form a plan to pay off your loans. If you are taking out loans in the six figures for your MBA, you will need to prioritize addressing this debt in every facet of your life. From looking for apartments to rent to deciding whether or not to go to a wedding, ensure that you will be able to pay off your loans in a timely manner. Remember — the faster you pay off your loans, the more money you will save! 

We’d love to hear from those of you who have gone through financing your MBA. Please get in touch with us or leave a comment below sharing your experience and best tips! 

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9. MBA student loan resources

Touch MBA Podcasts on Financing Your MBA

• #206 Strategies for Optimal MBA Student Loans with Nikhil Agarwal from Juno
• #86 Financing your MBA Abroad & International MBA Loans with Ricardo Fernandez, Prodigy Finance
• #108 How to Finance Your US MBA with Phil DeGisi, CommonBond

MBA Student Loan Calculators

• SmartAsset Student Loan Calculator
• Juno’s Private vs Federal Loan Comparison Tool

The MBA loan providers we researched for this guide includes: 

• United States Federal Student Aid
• Sallie Mae
• Juno
• Citizens One
• Earnest
• Ascent
• SoFi (use this link to apply for SOFI private loan and get $100 welcome bonus)
• MPOWER Financing (use this link to save $100 off your MPower loan)
• Prodigy Finance

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