A business school education is a significant financial investment. Inevitably, tuition fees for business masters programs at top schools increase each year, and most students must also grapple with living expenses. Little wonder, then, that funding is consistently said to be the biggest concern for prospective students, according to surveys conducted by the Graduate Management Admission Council, which puts on the GMAT.
Happily, though, most business schools offer financial aid to admitted students, including some very generous scholarships that can effectively give candidates a free ride: cover tuition, living, travel and other expenses.
So what financial aid is on offer for the best and brightest MiM aspirants?
Scholarships have overtaken loans, savings and employer support as the biggest funding source for all graduate business degrees, according to GMAC.
Scholarships are awarded based on either merit (i.e. achievements) or financial need (income). ESMT Berlin awards both types of scholarships to budding MiM candidates, who submit requests at the same time as applying to the highly rated German program.
“Merit-based awards will be allocated on the basis of intellectual excellence, evidence of personal, professional achievement and of strong leadership potential,” says Boban Sulic, senior admissions manager at ESMT.
His advice for securing one is: “Familiarize yourself with the criteria listed on the [school] website, check if there is a fit and write a convincing scholarship essay,” he says.
“It’s always a good idea to talk concretely about how your presence in the program will enhance the experience of other students. Always be specific.”
For ESMT’s MiM program, there is a wide array of scholarships on offer, including for women, those with high GMAT scores and applicants from specific developing countries. The awards range from €2,000 to 50 percent of tuition fees, with the highest awards for exceptional candidates from developing economies who show both need and merit. The overall MiM scholarship budget at ESMT is over €300,000 and is expected to increase this year.
HEC Paris is one of France’s most highly rated business schools. It offers a range of scholarships that consist of tuition fee waivers and are awarded based on merit, or the academic performance of students. These include the Eiffel Excellence scholarship, and the Volkswagen - HEC Women in Finance scholarship.
On top of the merit-based scholarships, there are several external scholarships that students can use to study at HEC Paris and are awarded based on the student’s country of origin. For instance, the Chilean government offers students money to cover travel expenses, books and other study material.
Students should do thorough research to see which kind of scholarships are available in their home nation. Needs-based educational grants are another option. Some American students, for example are eligible for grants from the federal government that do not have to be paid back. They are essentially free money.
In addition to all this, HEC Paris provides students with on-campus jobs, for instance within the student-led consulting firm “Junior Enterprise”. Students work for French and international companies on various projects (such as the positioning of a new product or market data analysis) and get paid for their time.
Some projects require a few hours of work, while others may involve students for several weeks. “Students can choose their involvement according to their availability and finance needs,” says Julien Manteau, HEC Paris’ director of strategy and global development for pre-experience masters programs. Working any part-time job a be a good option, provided it does not get in the way of your studies.
Many business masters programs have internships built into them that pay well. At Neoma Business School in France more than 700 MiM students have done an apprenticeship scheme in which they spend one week at school, then three weeks working for a company. “It is a good option to get rid of all the tuition fees, totally paid for by the host company,” says Sylvie Jean, director of Neoma’s MiM course.
Loans are another option for candidates. The Frankfurt School of Finance & Management has setup a fund with Brain Capital to provide loans to master in management students. Repayments start after a successful career entry in a job paying a minimum gross salary of €30,000. The alumni pay back a fixed percentage (7.5 percent) of their income over a decade.
“The flexible, income-dependent repayment gives students a lot of freedom after their graduation. If their income is below €30,000 in any year after graduation, the payment year is postponed. Also the maximum repayment is capped [at roughly twice as much as the original tuition fee, plus inflation],” says Peter Kiefer, an educational advisor for student life at the Frankfurt School.
There are government student loans available too. In the US there’s the Stafford loan and the Grad PLUS loan programs for postgraduate students. But the interest payments can be steep: around 7-8 percent for both.
There are some more innovative ways to pay for business school. Crowdfunding is increasingly popular. Platforms such as Prodigy Finance and CommonBond provide international students with loans to study at many schools in the US or Europe, which can be difficult if you lack a local credit score. Prodigy bases its loan decision based on the impact your master’s degree will have on your future earnings, with the money crowdsourced from business school alumni who want to give something back to their alma mater.
There’s interest to pay on Prodigy loans — five to eight percent fixed, plus Libor, which is variable — but with a business school education almost guaranteed to boost your earning power, you have to consider the potential return on investment, which is usually high. At London Business School, for example, last year 96 percent of MiM students received a job offer within three months of graduation, at blue chip companies such as Amazon, Barclays, Facebook and Goldman Sachs. The average salary across the cohort was more than £42,000.
As Sulic says: “Don’t let the price of a degree keep you from applying. The return on your investment over time outweighs the cost of the degree. You will always have your degree once you earn it so the overall investment is divided over your lifespan.”