A foreign MBA doesn’t come cheap, but going to a B-school abroad doesn’t necessarily mean busting the bank and selling your house either.
The educational funding ecosystem has evolved by leaps and bounds since the days of standing in lines to get your passbook updated every time you visited the bank.
(If you were born after 2000, you probably don’t know what a bank passbook is, or why people were so punctilious about updating them, but that’s OK.)
There exists today far greater sensitivity on the part of both lending institutions and universities towards making quality MBA education far more inclusive and accessible than it has ever been.
Read on to find out the many financing options at your disposal to fund your MBA abroad.
How to fund your MBA abroad
We cover the 7 most popular MBA financing options. There are other creative ways (such as crowdsourcing) to fund your MBA abroad, but we’re not going to list them all here.
1. Student loans
This one’s a no-brainer. If you’re smart enough to have made it to a great B-school abroad, you’re probably pretty familiar with education loans already.
The process is simple – you walk into a bank, fill up a form, show proof of your credit-worthiness, sip on a cup of hot, milky tea with more sugar than you consume in a whole day while the bank processes your application, and walk out with a loan.
What most people don’t know is that when it comes to taking a loan to fund your MBA abroad, there are a host of options you can explore.
A. Standard Student Loan
This is the most common type of student loan. In most cases, the bank would require some kind of collateral, such as property against which to sanction the loan.
You can get non-collateral loans too, but the amount is usually not adequate to cover all the costs of your MBA abroad.
B. Loan from a Foreign Bank
If you have a relative or a close friend living in the country you plan to do your MBA from, you just might be eligible to get a loan from a bank in that country.
For instance, you can get a loan from an American bank if someone you know, who is a US citizen, is willing to act as a co-signer for your loan.
The advantage here is that American banks typically have lower interest rates than their Indian counterparts.
Keep in mind however, that availing a loan from a foreign bank makes financial sense only if you plan to work in that country after your MBA.
Otherwise, you might be faced with the prospect of having to pay off an American loan on an Indian salary, and that is going to hurt as the exchange rate fluctuation is beyond your control.
You may end up paying much higher than what you estimated.
C. Loan from a Foreign Bank Without a Co-signer
This one works only if you made it to one of the top 10 B-schools in the US – those that have a strong brand value and a proven track record of getting their students placed in the best companies that pay the highest salaries in the industry.
Leading B-schools such as Harvard, Stanford, MIT Sloan and many others help finance their students by acting as the guarantor of the loan.
Which basically means that if you make it to Harvard or Stanford, an American bank will happily extend you a loan based solely on the reputation of your B-school.
Find more information on non cosigner students loans for international MBA
D. Loans from Non-Banking Financial Institutions
Besides public and private banks, several non-banking financial companies (NBFCs) also provide loans to students looking to pursue an MBA abroad.
There are a host of NBFCs today that will help you fund your MBA abroad.
2. Company sponsorship
If you already have a great job at a firm you love, but want to pursue an MBA to enhance your skills and grow in your role, a company sponsorship might be the best option for you.
With a company sponsorship, your employer agrees to fund your MBA abroad, in exchange for a signed assurance that you will return to work for the company post your MBA.
It’s a great option that offers not just a free ride at a top bschools, but also a job guarantee on the other side. No hassles of job hunting, and no hassles of getting stressed out on loan repayment calculations.
But the pre-condition (coming back to the same company) that comes with this financing option might not go down with many – especially those who’re looking at a big career change and hoping to use the MBA degree as their launch pad.
Read this article where we cover the pros and cons of a company-sponsored MBA abroad.
3. Graduate assistantship, Teaching assistantship, Research assistantship
Nearly all universities in the US, UK, Canada, and Australia offer a limited number of graduate assistantships (GA), teaching assistantships (TA), and research assistantship (RA).
Each one of these roles comes with competitive remuneration that can easily help offset a good part of the costs of your MBA abroad, while also allowing you to gain significant work experience as you learn.
With a graduate assistantship and teaching assistantship, you help a professor in preparing course lessons, evaluating assignments, taking tutorials etc. A research assistantship involves being part of an ongoing research project at the department.
You also get the advantage of making great connections with some of the smartest people on campus, and once you leave, you can always ask the professor or lead researcher you assisted to write you a glowing recommendation letter that can make your resume stand out from the crowd.
Need any more reasons to go looking for a GA/TA/RA?
- Graduate assistantship: Teaching and research assistant jobs
- W.P. Carey with full MBA scholarship & graduate assistantship
Most B-schools have a system of paid summer internships for their students, wherein they intern with a company over the summer break.
Typical pay for MBA interns in North America and Europe can vary between USD 5,000 – USD 10,000 a month and has been growing steadily over the last few years.
While this may not be sufficient to cover the costs of your MBA by itself, combined with any of the other options listed in this article, a good internship can go a long way in funding your MBA abroad.
You may be interested in:
- How MBA internships work
- Amazon job offer after internship for Indian MBA student on a full scholarship
5. Loan forgiveness
Loan forgiveness program is a novel scheme under which you commit to working for an NGO, non-profit, or a governmental organization post-MBA, in return for “forgiveness” or waiving-off of a certain portion of your loan amount.
For most colleges in the US, the loan forgiveness amount varies between USD 5000 to USD 20,000 per year.
Loan forgiveness is a great way to meet your student debt obligations; as you earn a salary from your job, a portion of your student debt gets waived off at the same time.
Having some NGO/public sector experience on your resume is also a great way of highlighting to future employers that you are an empathetic, conscientious and socially responsible individual.
Read more on student loan forgiveness programs.
The flipside however, is that you forego the chance to land that plum investment banking job you always dreamed of for a low-paying public sector/NGO role.
But then, you can’t always have your cake and eat it too, right?
This should ideally be the first resource to turn to fund your MBA abroad, but we’ve kept it for the last because it is both an obvious, and a much-overlooked option.
It is important to have a strong pool of personal savings to dip into before you even consider any of the options listed above.
An MBA abroad can be subject to the vagaries of geopolitics, global finance, exchange rate fluctuations, pandemics, and everything in between.
Your personal savings are your first and last line of defence against the vicissitudes of life. So, make sure to peg your foreign MBA plans to your personal savings.
As the old proverb goes, cut your coat according to your cloth.
We’ve saved the best MBA abroad financing for the end!
Almost all leading B-schools today offer a limited number of scholarships to incoming students. They are generally of two types – need based and merit based.
Need based scholarships are offered to students who can convincingly demonstrate that they lack the necessary resources to pay for their education.
Merit based scholarships are offered to students who demonstrate extraordinary scholarly, professional, or extracurricular achievement.
If you intend to apply for a scholarship, you will need to do your research in advance, and will have to apply at around the same time as your university application.
You may also have to apply separately for a scholarship at each of the schools you apply to.
If all this sounds a little overwhelming, here is a great resource to help you get started on MBA scholarships.
Read more on MBA scholarships:
- MBA scholarship statistics reveal prize money getting bigger in admissions game
- Higher Education Scholarships for International Students
- How I got into Wharton with scholarship
- INSEAD MBA diversity scholarship with an average GMAT score of 700 in Round 2
- Profile building for second MBA after IIM: M7 (Kellogg) admit with scholarship
- NYU Stern School of Business with $60,000 scholarship in Round 3
- Michigan Ross MBA with scholarship after 3 years and GMAT-to-GRE switch
Explore all funding options as early as you can
B-schools aren’t monolithic entities existing in social vacuums completely oblivious to the world around them.
They are sensitive to the issues faced by applicants, especially those from developing countries like India, and are constantly evolving policies to address them.
Your dream B-school wants you to come and study there, and is willing to help. What most applicants lack is a knowledge of the various options available to them.
Make sure to do your research and choose the best option(s) to fund your MBA abroad.
Also make sure you don’t leave this vital step till the last minute. Many candidates make the mistake of assuming that funding will automatically fall in place once they have an admit.
These are the ones who’re most likely to hit a wall for neglecting to plan for funding their MBA abroad.
Not being able to attend your dream program even after cracking the competitive admissions process is the worst feeling. Make sure it doesn’t happen to you!
As always, MBA Crystal Ball would be happy to help you in your academic journey by providing what many of our clients call the best MBA admissions consulting for MBA abroad. Our email is: info [at] mbacrystalball [dot] com