Your guide to graduate student loans for your MBA

Key Takeaways

• There are two main options when it comes to graduate student loans for an MBA in the US: federal or private
• While federal loans have historically offered the best protections and most flexible repayment plans, new regulations mean a restriction to the amount of that MBA students can borrow
• More students are likely to need private loan providers to cover the costs of their MBA. Fortunately, there are plenty of competitive options to explore

One of the key considerations when applying to business school is the cost. As premium graduate degrees that teach executive skills, offer great contacts and opportunities, MBAs and business master’s programs can be expensive.

According to our latest report, the total cost of an MBA at a top-ranked US business school can exceed US$200,000.

Although personal savings and loans from family or friends could be an option for funding business school, it’s likely that most students need additional financial aid in the form of a loan. So where do you begin?

Federal loans

If you are a domestic MBA candidate in the United States, you will typically have access to federal student loans and will also consider private MBA loans.

Federal loans are loans provided by the US government, through the US Department of Education. If your financial aid package includes federal student loans, your school will let you know how to accept the loan. Generally, you’ll have between 10 and 25 years to repay your loan.

As an MBA student you previously had access to both Direct Unsubsidized Loans and Grad PLUS Loans. However, from July 1, 2026, new graduate borrowers will no longer be able to take out Grad PLUS loans, and the borrowing cap of the Direct Unsubsidized Loan is reduced to $100,000 for graduate loans, plus an overall lifetime of $257,500 for all federal direct loans.

Previously, many graduate students will have taken out a Direct Unsubsidized Loan at the annual cap of $20,500 and used a Grad PLUS loan program to cover the remainder. For new borrowers, from July 1, 2026, that will no longer be possible, and you may have to get a private loan to close the funding gap of your MBA.

Federal loans have fixed interest rates and offer strong borrower protections and flexible repayment options, which are often more favorable overall than many private loans, especially for students who expect variable or modest incomes.

So what are your options now?

Private loan providers

Given the new restrictions on federal student loans, many US students will need to look to private loan providers to cover the costs of their MBA.

The finance comparison site NerdWallet highlights leading private MBA loan providers and recommends using federal student loans first, since their protections and repayment options are often more favorable, before turning to private lenders for any remaining costs.

GMAC has collaborated with one of Nerdwallet’s highest rated funding providers, Ascent Funding, which offers an MBA student loan with fixed and variable interest rates and common repayment terms of seven, 10, 12, or 15 years. You can also typically defer payments up to nine months after graduating from your MBA.

Find details of Ascent business school loans.

Ascent has also created a handy Grad School Funding Calculator that could help you to understand how the changes to Grad PLUS could affect how you will pay for your graduate program.

Paying off your graduate student loan

Before you take out a loan, it pays to do your research to ensure you find the best financing for you. A lower interest rate with a flexible period to pay off your debt will mean you’re likely more comfortable paying off your loan, so you need to find the best options available to you.

Of course, many MBA grads enjoy a salary spike which can make paying off your school finance more palatable. Additionally, some schools, such as Yale School of Management and Stanford Graduate School of Business, also offer MBA loan forgiveness programs for grads who enter the nonprofit/public service sector. However, these aren’t guaranteed and it is also important to consider the current employment market when considering your options.

Your next steps

• When starting out on your graduate student loan search, check your current federal loan balance and how close you are to the new $100,000 aggregate cap on graduate Direct Unsubsidized Loans and the $257,500 lifetime federal direct loan limit (excluding Parent PLUS). If you are near those limits, you may need to consider institutional, employer-sponsored, or private funding for the remaining costs.

• Then, take care to compare the offers with the multiple private lenders operating in the marketplace. Financial aid is available—you will just need to allow time to explore your options to find the best deal for you.