Preparing for Your Future - Finance Options 1

It is no secret that Executive MBAs come with a hefty price tag. Fortunately, however, any risks associated with the investment are reduced over time as candidates see the true value of the EMBAs reflected in career advancement and opportunities. Yet there is still the need for candidates to deliver on this cost up front, so how do you go about securing such finance?

“There are several [financial] resources a potential EMBA candidate should consider,” Jerneycic says. “Tuition reimbursement programs with their current employer, grants/ scholarships, financial aid (private and public options), and financing the degree out of pocket. Even if financing is available for some, or all, of an EMBA candidate’s degree, I recommend starting to save for any out-of-pocket expenses as soon as possible.”

Company sponsorship

This is the most common form of EMBA financing, given the structure of the degree allowing candidates to continue working while upskilling in the business school classroom. It’s also the option that many business schools encourage. Rachel Killian, MBA marketing and recruitment manager for Warwick Business School in the UK encourages candidates to talk to their employer, to get their buy-in and their involvement. “Even if they only make a partial financial contribution, it’s worth having them involved in your journey - you’ll both benefit more from it. If employer sponsorship isn’t an option, then talk to the school to see if they have a flexible payment plan in place; can you spread out the tuition fee payments for example?”

Francis Petit, associate dean for Executive MBA programs at Fordham University’s Graduate School of Business in the US, also encourages candidates to engage in conversation with their employer.

“For our students it is usually a one to two to three pronged attack in terms of financing. I first tell prospective students to find out the formal policies of their organizations for sponsorship. I then tell them once they are aware of the formal policy to go to their line manager to see if he or she is willing to go above and beyond the policy. If so, then human resources will usually back the decision. If there is a balance, students then pay for the remaining tuition by either a payment plan offered by Fordham or federal loans if need be. Lastly I tell students to speak with their accountants since, as a result of new tax laws, some of our students are getting tuition money back within their tax refund.”

Although company sponsorship may have declined in recent years as organizations look to curb spending in times of financial difficulty, many still have money available for the many still have money available for the upskilling and training of their employees. It just requires you, the candidate and potential recipient of this funding, to look for additional ways to top up this pool of money and also to be aware of the risks involved. Ashley Arnold says about 60% of candidates on Henley’s Executive MBA program are company-sponsored, a sign that there is certainly still money in the kitty, but he warns candidates that such financial support does come with risks. “The only thing to be mindful of is, what would happen if you want to move [companies], because you are usually tied into an agreement with the company. Or, the company then decides you are surplus to requirement. It’s quite rare, but it does happen.”

Loans

This type of financing is synonymous with higher education systems around the globe, and business schools are no different. Candidates intent on studying for an Executive MBA are also likely to turn to student loans as a funding option, but as always, it is beneficial to know what you’re getting yourself in for.

“The first thing to be aware of is that unfortunately obtaining credit is much harder than it used to be,” warns mortgage and financial services industry expert, Dominik Lipnicki. “No matter how wisely you intend to invest the money - lenders are more reluctant than ever to hand it over.”

Lipnicki, director of Your Mortgage Decisions Ltd, advises Executive MBA candidates looking to finance their degree through a loan to check their credit report. “It needs to be spotless to get the best rates and you’ll need proof of income,” he says. “Anything less and you’ll be expected to pay more or even declined altogether.”

It is therefore important that EMBA candidates choose their lender wisely. “Lenders will carry out a credit search that leaves an imprint on your profile,” explains Lipnicki. “If you apply more than twice within a six-month period it’s likely your credit score will be damaged and this can take some time to repair. “

Don’t automatically assume that you’ll get the advertised interest rate either as these are often headline rates designed to lure people in. The reality is most people pay significantly more, so do shop around.”

Arnold knows only too well the risks of taking out a loan to finance an Executive MBA. “If people do take out a loan, they have to think about whether or not they can pay it back after the program has finished,” he says. “When I graduated, the economy had just taken a nose dive and I took a massive backstep in my career in terms of salary to move forward. That had an impact a few years down the line and it has happened to quite a few people. It’s just another aspect to be aware of, what you’re going back out to after your [E]MBA,” he says.

Both private and public loans are available, but they typically carry a higher interest rate than education loans for undergraduate programs. Contact your local bank or visit studentaid.ed.gov to look into your student loan options.