A Comprehensive Guide to US MBA Student Loans 2021

Getting an MBA is a considerable investment. Between taking the GRE or GMAT, living costs, admin charges and tuition fees, you could easily end up splashing out over US$200,000 on your degree.

Thankfully, the business school world has come a long way in terms of accessibility.  In fact, there are now several financing solutions that can help you pay for or fully cover the cost of your MBA programme.

Student loans are a great way of funding your degree: unlike regular loans, they have lower interest rates – meaning they’ll be easier to pay off – and you’ll only have to begin repaying them after graduating.

Here is TopMBA’s comprehensive guide on the top loans for US MBA students in 2021.

Federal student loans

Federal student loans are funded and provided by the US Department of Education. These include several benefits – such as income-driven repayment plans and fixed interest rates – that are commonly not offered by banks, credit unions, state agencies or business schools.

There are two main federal student loans MBA students can choose to apply for: federal direct unsubsidised loans and federal direct grad PLUS loans.

Direct unsubsidised loans are a great option for the majority of MBA students. Whether you’re in severe financial need or not, or whether you have good credit or not, these will be available to you, as they don’t require you to go through a credit check.

As an MBA student, you’d be eligible to borrow a maximum of US$25,000 each academic year. Because the loan is unsubsidised, the interest accrues during the degree and the interest rate will remain fixed.

To apply for a federal unsubsidised loan for the period of September 2021 to May 2022, you’ll have to complete the Free Application for Federal Student Aid (FAFSA) here.

Federal direct grad PLUS loans are available to students who require extra funding beyond direct unsubsidised loans. Like the latter, these are unsubsidised, so the interest accrues during the in-school period and its rate remains fixed.

With a grad PLUS loan, students can borrow up to the total cost of attendance at their selected MBA programme, minus any other loans and financial aid received. Unlike with direct unsubsidised loans, applicants will need to go through a credit check.

You can apply for a direct grad PLUS loan for the period of September 2021 to May 2022 from May 1 2021. Your FASFA application must be completed each year.

Private loans

Private student loans are another great way of funding your MBA. While they don’t offer all of the same benefits as federal loans – such as income-driven repayments or loan forgiveness –, with a good credit score you could still land a lower-interest loan that’ll help you finance your degree for less.

Here are some private lenders who have made educational loans to MBA students at top schools such as The Wharton School, Harvard Business School and Stanford Graduate School of Business:

• Sallie Mae: Sallie Mae offers an MBA loan with no origination fee, variable and fixed interest rates, a six-month grace period, a deferred repayment option, interest and fixed repayment options, and rate reductions.
• CommonBond: With no co-signer required, flexible repayment options and no repayment penalties, CommonBond is a popular lender among students at top schools.
• Citizens Bank: Citizens Bank offers borrowers up to US$225,000 in loans for their MBA degree. Students can choose from competitive fixed and variable rates and affordable repayment options that fit their schedules and budgets.
• Prodigy Finance: Prodigy Finance offers loans to international students hoping to land spots on top US programmes. They offer a wide range of benefits, including early and flexible repayments, no co-signer requirements, and additional loans for living costs.
• PNC Bank: PNC Bank offers a PNC Solution Loan, which is designed specifically for graduate students. Borrowers can choose from flexible and fixed rates, and can also save money on application and origination fees.
• Discover Student Loans: Discover Student Loans offer zero-fees-required private student loans for MBA students, which can cover up to 100 percent of their cost of attendance.