Deciding to invest in your future by attending business school is the first step toward a better career. A study by the U.S. Census Bureau reports that workers with a graduate-level degree earn 50 percent more than workers with an undergraduate degree and twice as much as workers with a high school diploma.
The second step toward an exciting new career in business is figuring out how to finance your education. Financial aid in the form of loans, grants or scholarships is widespread and readily available for students wanting to attend business school.
Business School Loans
The federal government regulates the maximum rate of interest that lenders can charge on federally guaranteed student loans, so college loans have lower interest rates than other kinds of loans. This helps make the loans easier to pay back, which encourages more people to attend school. Another perk of student loans is that repayment does not begin until six months after graduation (or when enrollment in school is less than half time).
There is also assistance for borrowers having difficulty repaying their education loans, including deferment and forbearance. These options give borrowers more interest-free time on their loans.
Although there are different types of loans, the most common federal student loan is the Stafford Loan. Stafford Loans include the William D. Ford Federal Direct Loan (Direct Loan) Program. These programs are dispersed directly to students, and depending on the student's financial situation, they can be subsidized or unsubsidized. Loan amounts are also need-based, and will be distributed accordingly.
Private loans are another common type of student loan. These loans offer higher limits and no payments until graduation, but interest starts to accrue immediately upon loan distribution. Both students and parents are allowed to take private student loans, which are a better alternative than credit card debt.
You'll need to complete federal forms, such as the FAFSA, to obtain private loans. Eligibility often depends on you or your parents' credit score. Having a credit score above 650 will increase your chances of being approved for a private loan. Interest rates and fees are based on your credit score, so it is often better to apply with a cosigner to achieve a lower rate.
PLUS Loans, which are distributed through the FFEL and Direct Loan programs, are geared toward parents. You must be a dependent student enrolled at least half time in an undergraduate program in order for your parents to qualify for this type of loan.
A good credit score is a requirement for a PLUS Loan, and there is a yearly limit. This limit is equal to your school costs less other financial assistance you receive. In addition to the loan limit, the first payment is due 60 days after the loan is distributed. There will also be a small fee that your parents are required to pay (which is usually less than four percent of the loan).
Graduate and professional degree students are now eligible to borrow under the PLUS Loan program, under the same terms and conditions. This program is referred to as the Grad PLUS Loan program.
For more information about loans, visit these financial aid resources:
Business School Grants
Grants are one of the best ways to finance a business education, because they offer "free" money that doesn't need to be repaid.
There are over a thousand federal grant programs in the U.S.—worth over $400 billion. Securing a student grant can help you save hundreds or even thousands of dollars. Although it takes time and energy to apply for a grant, the payoff is well worth the application effort. Often, business schools automatically consider you for grants when you complete a FAFSA and apply to school.
It is important to note that MBA and other graduate-level business students are not eligible for any broad-based federal grants. These types of federal grants are only awarded to undergraduate students, so pay attention to the fine print when applying for grants awarded by the federal government.
For more information, visit these financial aid resources:
Business School Scholarships
Scholarships are another form of financial assistance where there is no cost to the student. Because scholarships are essentially free money, the competition for them is tough.
Some scholarships may come with requirements for qualification, such as applying to a specific course of study or active involvement in an organization or group. Some scholarships apply to general education (such as athletic scholarships), but usually a certain grade point average needs to be maintained to keep these types of scholarships.
For business students, professional associations in your industry may give scholarships to qualified individuals, so this is a great place to start your search for scholarships. Beyond professional associations, some of the best scholarship resources can be religious organizations, private and public schools, small businesses, large corporations, community groups, generous individuals or philanthropic foundations.
For more information on scholarships, visit this resource:
Scholarships for Women and Minorities
In an effort to encourage more women and minorities to pursue business careers, there are many business scholarships specifically geared toward these two groups. Visit the following pages for more information on business school and scholarship opportunities for women and minorities.
Business School Work-Study Programs
Work-study programs offer students an opportunity to finance their education by working in on-campus jobs, community-related jobs or teacher assistant jobs. Typically, work-study awards depend on factors such as level of financial need and school funding availability. Often, students choose work-study programs that are related to their field of study. This helps them finance their education and also gives them experience to put on a résumé.
Work-study pays at least the federal minimum wage, and often more, depending on the skills and level of experience needed. You can indicate whether you want to be considered for work-study assistance when completing your FAFSA form.
For more information, visit these work-study resources: