How to fund your MBA

The Do’s and Dont’s of Financing your MBA

Last updated on March 22nd, 2014

Reading Time: 4 minutes


If you’re reading this, you’ve either got an admit to a B-school or you’re considering applying to one. Either way, good for you. This post is to help you on financing your MBA.
An MBA will, most probably, be the costliest acquisition you will make in the next ten years. Hence, it pays to do your homework and get things right.

Things to budget:


1. Tuition

The average tuition for a two-year MBA program exceeds $60,000. If you attend one of the top business schools in the U.S., you can expect to pay as much as $100,000 or more in tuition and fees. Obviously, this number will be lower for one-year programs.

2. Books and Supplies

Includes course material, laptops (some schools such as NUS, mention configurations), and stationery.

3. Food

If you can cook, good for you; but budget for cost of supplies and time constraints, which might force you to dine out.

4. Personal and Health

Personal items, including your clothing and other necessary supplies, such as toiletries and utensils. Health Insurance is mandatory. Check with the schools on their policies.

5. Housing

Depending on location and type of accommodation, this could be a significant cost.

6. Transportation

Budget for daily transport and necessary overseas tours or trips.

7. Entertainment

B-school can be grueling and a timely break will prevent burnouts. Also, considering you will be living in that country for some years, it is a good idea to immerse yourself in the culture and experience life as a native.

8. Cushion

Always wise to budget about 5-10% of the overall budget for unexpected costs.
Websites like Numbeo and Living Wage can give you a fair indication about the cost of living.
We would advise you to connect with alumni of the respective schools to get a more pragmatic picture of the same.

Reducing your costs:


1. Scholarships / Fellowships

Most schools offer scholarships based on need and merit. Do check out your eligibility for these opportunities. The chances of availing fee-waivers are indirectly proportional to the ranking of the B-school. For instance, if you have a GMAT of 690 and the average GMAT at your target school is 650, you stand a higher chance to get an admit and a scholarship at this school.. Duke Fuqua is one of the rare top 10 B-schools that regularly gives 100% fee-waivers to international students.
Chicago Booth and Stanford GSB also offer substantial India-centric scholarships. But, the number of such scholarships doled out is very small and the bar to land them is quite high. So have realistic expectations from B-school scholarships when you plan your MBA finances.
Watch out for:
– Government initiatives
– Private Endowments (For instance, the ArcelorMittal Scholarship awarded to Kellogg students who show a potential and interest in working in emerging economies.)
– Research Organizations’scholarships
– India Centric Scholarships: For example, the Reliance Scholarship, which offers 5 full scholarships for Indian students going to Stanford on condition that they return to India after two years of working abroad to contribute to the development of the country; The scholarships offered by the Tobaccowala Foundation of India to Indian students at Chicago Booth etc.

2. Research and Teaching Assistantships

Paid teaching and/or research assistantships are available each academic year in most B-schools. This is a unique opportunity to make some extra money while also getting the opportunity to work with some of the school’s pioneering faculty members as they develop cutting-edge research and breakthrough industry innovations.
However, most courses are rigorous and may not leave much time for part-time work on campus.

3. Company Sponsorships

Some companies, especially Fortune 100 corporations, assume partial or the entire cost of an MBA program (assuming one earns satisfactory grades). This is an ideal situation for many professionals. But, of course, it might entail working for the company for a stipulated period of time post-MBA. So if your goal is to continue working for the same organization after your MBA, try to get your employers to sponsor you. 🙂

Student Loans

The bulk of your MBA costs would be financed through student loans. Although RBI has directed banks to facilitate financial assistance for students pursuing studies abroad the eligibility for these loans varies depending on the bank.
Some parameters on which to evaluate a bank loan are:

1. Interest rates

Interest rates vary depending on the bank’s benchmark prime lending rate (PLR).
Some B-schools have affiliations with international banks, which might offer cheaper interest rates.

2. Collateral required

Most banks will ask you for some kind of a collateral. If you are joining a top B-school, this requirement might be waived. Credila, a subsidiary of HDFC, is a specialist in educational loans and is open to funding up to 80% of your cost.
For US-based B-schools, the popular option is to go for co-signor backed loans. i.e. a guardian in the US will guarantee that if you can’t pay the loan back, he will. So now would be a good time to get back in touch with your rich relative in the US!

3. Repayment schedule

Generally, repayment is in the form of equated monthly installments (EMIs) and commences one year after completion of course or six months after securing a job, whichever is earlier. The repayment tenure can be from 5 to 7 years.
See FAQ, here
See country specific options here


Although the cost may appear to be staggering, investing in an MBA will serve you well for 20-30 years of your professional life. The key element to bear in mind is ROI.
Start your research today to make an informed decision!
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