Although the rewards of having a graduate management degree are substantial, getting one is a major investment. And unlike undergraduate degrees, for which your parents often pay the bills, this time it is likely that you will be writing the checks yourself. Students typically finance the degree with some combination of savings, earnings (for those who are working), and loans. Loans are usually available, because lenders feel confident that people getting MBAs will have the earning power to pay the loans back.

There are a number of things you should do as soon as you start thinking about applying to business school. This is the time to get your finances in order and to start saving some money to pay for at least some part of the cost of your education. Reducing your consumer debt and paying down your car payments now will make it easier to save and will also prepare you to live on a student budget once you are back in school.

There are two important things to remember about the financial aid process. The school has to approve your application for financial aid, AND a lender has to actually loan you the money. You should reduce debt when you can and, at a minimum, make sure you are up-to-date on all your credit card payments and outstanding loans. Even if you are a great credit risk, that may or may not mean that a school will allow you to borrow the maximum a lender will approve. The school uses an estimated cost of living expenses and education to figure out what you SHOULD borrow, which may be less than the maximum you COULD borrow. If you decide to spend more than what the school estimates you should spend, you will be responsible for the extra expenses.

Loans can be a good way to finance your business education, but be mindful not to borrow more than you actually need, and remember that loans are paid back over time, with interest accruing. Be careful to not borrow so much that you will struggle to pay it back when you graduate. The amount you have to repay in student loans can limit your career choices after business school.

Once again, look at the costs:

• total cost of tuition and related academic expenses—compare the costs of each school you are considering in order to make the best choice.
• total cost of living—factor in the location of each school
• availability of financial aid
• opportunity costs—estimate a modest starting salary and compare your projected earnings over the next several years with and without an MBA