How to finance your MBA

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Doing an MBA can become quite an investment. Tuition fees may range from a few thousand Euros or Dollars up to more than 100,000. Living expenses, particularly in metropoles, and travel costs, for distance MBAs for example, may burden your pockets further. If you decide on a full-time MBA, moreover, your opportunity costs – that is the salary that you lose during your MBA – can also be counted toward your total investment. Reasons enough to carefully consider your financing options in advance. 

Means of financing your MBA

Typically, MBA students finance their studies with one of the following means or a mix of them:

  1. Savings
  2. Scholarships
  3. Loans
  4. Employer support

And the most important address for obtaining information on such financing options is the financial aid website of the respective business schools or university. If a school does not have a financial aid section on its platform, I would consider this a red flag, as it may either mean that the school does not have the funds to support students (not a good sign) or that it is not interested in supporting its students (not a good sign either).

After these more or less standard financing means, however, there are additional, less known options.

  1. Tax deduction
  2. On-campus jobs
  3. Negotiation


Private savings may be the most common means of financing your Master of Business Administration. In contrast to graduates, MBA students started their careers already and may have work experience of between 2 and 20 years. As a result, they were able to earn and save money that could be invested in their further education at some point.  Moreover, Executive MBA (EMBA) students, are typically experienced professionals in leadership positions who may have even more funds than young professionals to invest in their MBA – this is often one of the reasons why EMBA programs are more expensive than full-time or part-time MBA programs. 


Scholarships can be categorized along several dimensions.

Merit-based scholarships are granted based on excellence on the student side – as demonstrated, for instance, by an outstanding GMAT-score. Need-based scholarships, in contrast, are granted to students without the financial resources necessary for their studies.

Internal scholarships are granted by the business schools’ or universities’ financial aid offices. External scholarships are granted by institutions or companies outside the academic institution. Some of the external scholarships may be listed on the financial aid pages of the business schools while others can only be found on the scholarship provide (for instance, the German career network 

General scholarships are open to all MBA candidates whereas specific scholarships are contingent on a specific target group that the respective school wants to attract and support. Scholarships for candidates from a specific geographic region may be an example, scholarships for entrepreneurs may be another.  


Loans are typically granted by family members or credit institutions. In many cases, business schools may have agreements with a local bank on granting low-interest loans to MBA students at the respective business school.

Employer support

Some employers – primarily global players – may support their employees by funding their MBA studies. Consulting companies, for instance, may offer a three-year fellowship program to their young consultants who work for two years and attend an MBA program in the third year without losing their salary. Many years ago, a well-known accounting company in Germany offered some of its employees a special deal: The company financed their studies and the employees agreed to stay in the company until five years after graduating. If they left the company earlier, they had to pay back part of their scholarship.

Tax deduction

Did you know that (at least in Germany) all MBA-related costs can be deducted against income tax liability as professional expenses? Fees for TOEFL or GMAT tests, expenses of test preparation, travel costs for visiting test centers, MBA fairs or business schools, tuition fees, and much more – potentially, all of this can be eligible for a tax allowance and reduce your total investment by 30 percent or more. My advice: Talk to your tax consultant!

On-campus jobs

A lesser known source of financing your MBA may be an on-campus job. Though the workload during an MBA is high and you may be under pressure, asking for an on-campus job – for instance, doing some research or data work for a professor – may be a way to make your business school reduce the tuition fee for you. 


Did you know that you can negotiate the price for your MBA studies? Well, not officially and not at every school. However, if you pursue the right communication strategy, you can create actual chances of getting a scholarship, tuition waiver or whatever you want to call the price reduction. The trick is to follow the right timing, communication style, and argumentation. How? Well, I will teach you this in my coaching.   

My advice

First, develop a profile of your ideal MBA that optimally matches your goals and resources. This is a key part of my coaching. 

Second, clearly reflect on the total amount of money you would be able and willing to spend on your MBA. Note that having the money does not automatically mean that you want to spend all of it. 

Third, look out for programs that come as close as possible to your ideal MBA profile but ignore the costs for a moment. Ignoring the costs at this stage is important to get a well-rounded portfolio of target programs without excluding them too early, particularly considering that you may have more financing options than you know right now. 

Fourth, organize your list of business schools or programs in two buckets – one bucket includes your favorite schools that are too expensive for you, while the other bucket includes all your favorite schools that are affordable.

Fifth, apply to a few in both buckets – in total between two and six schools – and wait for the schools’ responses.  If the expensive schools don’t accept you and an affordable school accepts you, the decision is clear. But what if you get acceptance letters from both an expensive and an affordable school?

Sixth, imagine that you prefer the expensive school or program over the affordable one and your only problem is the costs. Then my advice is: Follow my negotiation strategy that I teach in my coaching and see if you can reduce the costs of the expensive program. Should it work, perfect. And if not, you still have the affordable program as a back-up.  

There may be more configurations than the one just outlined and we can discuss this in depth during my coaching – but now you understand my logic and why having an MBA selection strategy is so important.

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