By Diane Schwemm and Evanne Montoya
Your student should be in the driver’s seat as they consider business school and prepare for the financial implications, but that doesn’t mean you can’t provide meaningful navigational support. It’s important to encourage your student to put together a healthy plan for paying for graduate business school.
Check out these tips on determining how much business school will really cost, having the money conversation with your student, saving up, and finding scholarships/fellowships/grants. The information below applies to students considering Specialized Business Master’s programs, too.
The cost of the degree will be broken up into a few categories: Tuition and Fees/Books, Living Expenses, and with some programs, Periphery Expenses (such as laptops and required tours or trips).
Tuition and Fees/Books
Begin by checking the websites of a few programs your student is interested in. The information you need will be labeled something along the lines of “Cost Summary,” “Estimated Costs,” or “Finance your MBA.” Please note, for some universities you can access this directly from the MBA or Specialized Master’s program page, whereas for others you have to go to the University’s general finance page and look for graduate tuition rates.
Prices for Graduate Business Programs vary quite a bit. In general, public universities have lower tuition than private ones, and online tends to be less expensive than in-person. Part-time programs, including Specialized Master’s, are popular because of the possibility of continuing to work while studying, decreasing the financial pressure (but increasing time pressure!).
Keep all this in mind as your student searches, and encourage due diligence. If your student is going to choose a school that’s $50,000 or more in tuition each year, don’t assume that the higher price tag will be worth it because of a bigger name. Encourage your student to research alumni salary rates, preferably for graduates who entered the field and/or chose the concentration your student is pursuing. Before your student makes a final decision, they should also factor in any aid/scholarships (see below).
Estimated living expenses may be included in the graduate program’s cost estimates. You can also get an idea of the relative cost of living in different cities by using CNN Money’s “Cost of living” calculator or, for a more extensive breakdown, see MIT’s Living Wage Calculator. To make the best use of the information, your student should also compare how much they are spending now to the calculator values for their current city to see where they fall in regard to the average.
These also may show up on the university’s cost estimates. If not, check the program description for items such as travel programs or technology requirements.
A “money talk” is one of the ways a parent can have impact in the graduate school decision, observed Neil, whose son is considering graduate school. He suggests that parents can provide “counseling on cost benefit analysis and how [students] can prepare financially.”
Before the talk, take time on your own to determine what if anything you are able to contribute to your son or daughter’s graduate business education. Is there money left in a 529 college savings account? Do relatives have undisbursed education funds? Will you contribute to tuition or monthly living expenses? Be straightforward with your student, because the amount of anticipated parental financial support may influence the choice of schools and programs your student applies to.
If your student will be self-supporting in graduate school, you can help them strategize about how much they should have in savings before going to school. Will they tap into their savings to pay tuition? Borrow from a family member? Apply for grants and scholarships? Take out a student loan?
Many parents, including Neil, encourage their students to look at the state university option. Wendy, a Harvard Business School alum, has four adult children who have considered business school. She suggests that if a young adult has been working for a few years and would like to continue working while earning the degree, “an executive MBA might be a good choice.”
Always a more appealing option than a loan, encourage your student to check for financial assistance that won’t have to be paid back.
The scholarships and fellowships available from the school should be on the financial aid section of their website. They may be based on need, merit, or other factors (such as where the student is from, ancestry, or academic interest). It’s not a bad idea for your student to get in touch with the Financial Aid Office, especially if the school does not list the information you need or your student has a question about their specific financial situation. In most cases your student will have to be admitted to apply.
Outside Scholarships and Grants
Similar to school-based money, outside scholarships and foundation grants will have a variety of criteria. Many universities have their own outside scholarship search engines, which is a good place to start but should not be your student’s only avenue. A few major sites that include graduate scholarship listings are scholarships.com, fastweb.com, collegenet.com, and petersons.com. Be wary of sites that require you to pay for scholarship searches (and check out privacy policies if your student has to input personal information). Did your student have a favorite resource for the undergrad scholarship search? Check if they have graduate listings as well.
Some companies will pay for all or part of their employees’ MBA or Specialized Master’s costs. This may come as tuition help during school, or a reimbursement afterwards. It is generally contingent on the employee agreeing to work for a certain number of years at that company upon receiving their graduate degree.
Larger companies may advertise their MBA or Specialized Master’s sponsorship; other companies may be willing to help with costs if asked. Encourage your student to broach the subject (respectfully!) if they are already employed in a company that may sponsor. He or she should think carefully about their willingness to commit to the company.
Your student is sure to want your advice about how best to finance graduate school. It’s good to know that you can help and also that, with a solid financial plan, your student will soon be ready to start down the path to applying to (and being accepted at!) a business program that matches their learning style and professional goals.
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