One of the last things you probably want to think about as you prepare your MBA applications is how you are going to pay for it. If you are already carrying undergrad student loan debt, it’s even worse.
Over the years, it’s no secret that college has become astronomically more expensive. Outpacing inflation by a large margin, the cost of higher education has even outpaced healthcare costs. In fact, the price of a college degree has been the fastest rising and most inflated area of the economy in the modern era. It’s downright depressing.
For students with an undergraduate degree in Art History from an expensive, private college, the pain is probably palpable.
But even those who have a more marketable degree, the daunting payments can sometimes be a main deterrent to undertaking yet another loan for an advanced degree.
What to do?
Certainly accelerating your undergraduate loan payments is a good option if you can pull it off. One way to make this easier is to refinance your loan with a lower interest rate, but the opportunity to capture a low rate is quickly vanishing in an ever-shifting, upward-trending economy. Ideally, you would not take on MBA loans while you still have undergraduate loans looming, but if you can’t refinance and don’t have the cash on hand, you might find relief from parents or other family who can either help you pay loans off early, or at least loan you money at a favorable rate. The IRS allows up to $15,000 to be given to any one family member per year without tax consequences for the giver or receiver, so if you have a generous uncle, aunt or grandparent, make sure they know this.
Ultimately, you should try to avoid letting undergraduate loans guide your decision to go back to graduate school.
Every year you delay, it’s another year you put off what should become a dramatically better income environment for you. Plus the average top tier MBA graduate gets at least $10,000 in signing bonuses from most top employers these days, so if you are disciplined enough to use that money to pay off your highest interest rate loans, you will thank yourself later.
Fellowships are also a good option if you can’t pay off your undergraduate loans, since not having to pay for your MBA is just as good as getting money to pay off your existing loans.
Start early seeking out schools with a good track record for handing out Fellowships (look for private schools with large endowments, which is often searchable on the internet). Schools typically consider every applicant for Fellowship funds, so you often don’t have to make a separate application for financial help. There are also plenty of good research assistantship slots at public MBA programs, so if you don’t mind working 10-15 hours per week, you can get tuition waivers from these schools to defray costs.