Exploring how to pay for business school

Key Takeaways

• From government or private loans to grants and scholarships, MBA applicants have a wide range of options to pay for business school—as well as the possibility of self‑funding 
• Scholarships can cover most or even all tuition, but they are highly competitive, so you should apply as early as possible to maximize your chances 
• New US legislation taking effect on July 1, 2026, will change how much many graduate students can borrow in federal loans, so you may need to explore alternative sources of funding if you are planning to study from that date onward 

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Few things have a greater payoff than an investment in education.

A business school graduate degree can be an opportunity to acquire new skills, accelerate your career advancement, and boost your income. But in addition to deciding what and where to study, you will need to consider how to pay for your degree.

Because of changes to the US student loan system on July 1, 2026, US citizens and permanent residents planning to start a graduate degree from that date forward may need to revise their financing plans.

Most MBA students rely on a mix of funding sources. Below, we break down some of the most common options and highlight the latest changes you need to know about. 

Funding options 

Grants and scholarships 

There are a range of grants and scholarships available to business school students. On average, candidates expect to cover about 30 percent of their degree costs with grants, fellowships, and scholarships, according to our GMAC Prospective Students Survey. 

This type of financial aid is typically available directly from the school or from private organizations such as The Consortium for Graduate Study in Management. Grants and scholarships are usually awarded based on factors such as merit, financial need, or diversity. Your chosen business school will have information on the awards it offers, so make sure you research the financial aid options at your target schools. 

Assistantships 

Assistantships are a form of paid academic employment where you can receive financial aid—such as tuition reimbursement or a living‑expense stipend—in return for working part‑time for the school. 

Duties vary, but depending on your skills and area of study you might assist with teaching, research, or administrative work for a particular department or faculty member. Like scholarships and grants, assistantships are limited in number, so engage with schools early in the application process. 

Corporate sponsorships 

While not all employers are willing to sponsor employees to attend graduate school, it is certainly not uncommon. Support can take many forms, including full or partial financial aid, reimbursement for tuition or other associated costs, and access to company resources. 

If you are thinking of approaching your employer about sponsorship or applying to an established corporate program, come prepared with a compelling business case. 

Federal loans 

Federal student loans are guaranteed by the US government, which means the lender will be reimbursed if you default on the loan. Federal loans are available only to US citizens and permanent residents. 

Effective July 1, 2026, the annual Direct Unsubsidized Loan limit for most graduate students—including MBA candidates who are new borrowers—remains $20,500. However, there will be a new $100,000 aggregate cap on Direct Unsubsidized borrowing for graduate programs, as well as a new $257,500 lifetime cap across all federal Direct Loans. 

The Graduate PLUS Loan program, which previously allowed borrowing up to the full cost of attendance, will be eliminated for new borrowers as of July 1, 2026. Some students who had federal loans disbursed before that date and remain continuously enrolled in the same program at the same institution may qualify for a limited “legacy” exception. This allows them to keep borrowing Graduate PLUS Loans and avoid the new aggregate and lifetime caps for up to three additional academic years or until they complete their program, whichever comes first. 

Because tuition and total cost of attendance at some of the top MBA programs can exceed these new federal limits, many students may need to research alternative forms of funding, such as private loans, to close any remaining gap. 

Private loans 

There are a range of private companies that offer graduate student loans that can help applicants close the shortfall in financing their business school goals. Comparison websites such as NerdWallet provide useful breakdowns of leading providers, including Ascent Funding, which collaborates with GMAC to provide students with access to flexible, student‑centric financing solutions. 

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Find details of Ascent business school loans 

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Before taking out a private loan, compare interest rates, fees, repayment terms, and borrower protections carefully so you understand the long‑term implications. 

Crowdfunding 

Sometimes you need to think outside the box to fund your education. 
Crowdfunding is an alternative method of financing in which a large pool of sponsors (the “crowd”) provides capital to support a venture, campaign, or cause—such as your graduate degree. 

Typically, crowdfunding support comes either as a donation or in exchange for a reward with a clear monetary value, for example, a future product or service that you will provide. If you pursue this route, be ready to share your story clearly and explain why people should invest in your goals. 

Tax credits 

The IRS allows some students to claim education‑related tax credits and deductions that may help reduce their federal tax liability. However, the rules are complex and do not apply to everyone. 

For more information on possible tax breaks, visit IRS.gov or consult a knowledgeable tax professional. 

 

Frequently Asked Questions 

Is business school worth the money? 

The answer will be different for everyone, but most graduates agree that business school was worth the money. In recent GMAC Alumni Perspectives research, a strong majority of graduates report that graduate management education helped them achieve their professional, personal, and financial goals, and more than 85 percent say their investment delivered a positive return. 

Beyond salary gains, many alumni also point to benefits such as expanded networks, greater job satisfaction, and increased career mobility when assessing whether business school was worth the cost. 

What is the return on investment of an MBA? 

The ROI of an MBA depends on the school you attend, the level of financial aid you receive, your pre‑ and post‑MBA salaries, and many other factors such as industry, function, and geography. 

With our MBA ROI Calculator, you can explore different earning scenarios with and without an MBA to estimate your personal return on investment. 

Can I study an MBA for free? 

Some scholarships cover the full cost of tuition—and in some cases even your living expenses—but they are limited in number and highly competitive. It is worth researching what financial aid options exist at your chosen schools to see which awards you might be eligible for. 

You might also consider some of the most affordable MBA programs to limit your tuition costs or spread them out by studying in a part‑time, online, or flexible MBA format. It may be difficult to complete an MBA entirely for free, but there are certainly many ways to reduce your overall costs. 

Does FAFSA cover an MBA? 

The Free Application for Federal Student Ai (FAFSA) must be filled out and submitted if you want to be considered for federal grants and loans. Once you have completed the FAFSA and applied to the school of your choice, the school will often automatically consider you for institutional grants and scholarships as well. 

You can learn more about how FAFSA works and what kinds of aid it can unlock at StudentAid.gov.