Executive MBA Funding: Finding Hidden Money 2

The substantial investment necessary for Executive MBA funding at top business schools is requiring more and more candidates to begin getting creative with their financing options.  This is the second part of ‘Executive MBA Funding: Finding Hidden Money’, our guide – with the help of some top business schools – to some more uncommon sources of Executive MBA funding.

Education tax credit

When most people hear the word ‘taxes’ they want to run the other way, but when it comes to higher education, the taxman may actually be on your side for once. As Christo Nel, program director of the Executive MBA Program at Nyenrode Business Universiteit explains, “Professionals working in the Netherlands can make use of the tax deduction advantages of the Dutch tax law for study costs. Depending on your salary and personal circumstances, you can deduct a maximum of €15,000 per year.”

Education tax credits don’t just arise from the country in which you’re studying, as Nick Barniville, director of degree programs, ESMT reveals, “Many participants take advantage of tax deductions, which are often specific to their home country.”

Marjo Jarvinen, marketing director for global business development at HEC Paris adds, “Participants can enter the total cost of the EMBA program in the expenses section of their tax returns. This amount is then deducted from their annual taxable income thereby reducing income tax payments during the training period.”

Marianne Vandenbosch, director of the McGill - HEC Montreal EMBA also chimes in: “At the end of the calendar year, the program will issue official receipts for tax purposes. These receipts cover a single calendar year. For example, the 2013-14 McGill – HEC Montréal EMBA program fees total C$78,000; 73.5% of these fees are eligible for the tuition tax credit. And in the case where a student’s tuition is paid by the employer, the student can request an education tax credit for this portion, if the amount is also reported as income or a taxable benefit. If it is not reported as income, an employer that pays an employee’s tuition may deduct that cost as a business expense.

“Students enrolled in the McGill – HEC Montréal EMBA may also be eligible for the Canadian Education tax credit of C$400 per month. In all cases, candidates should contact their tax advisor to clarify the specifics of their situation,” says Vandenbosch. And finally, there is yet another way you can work with the taxman to help with your MBA funding according to Chantal Poty, program director, EMLYON, “For candidates who apply very early, they can benefit from a discount related to the VAT for the part of the tuition fees they pay by themselves.” So be sure to check with a reputable accountant who may be able to save you thousands in tuition fees by working with the government and taking advantage of the education tax credit.

Salary sacrifice and employee benefits

Even if your employer is not willing to help with your MBA funding by paying for all or part of your pursuits at top business schools, you may still be able to work with them to gain a number of benefits like salary sacrifice or training leaves. In France for example, as Jarvinen of HEC Paris, explains: "Employees have a variety of mandatory training entitlements. Participants may therefore be able to use the FONGECIF (Individual Training Leave) and DIF (Individual Training Right) to fund their EMBA degree, if they meet the necessary prerequisites.”

You may also be able to pursue a salary sacrifice scheme. According to Ashley Arnold, director of MBA recruitment for the EMBA and Flexible Executive MBA at Henley Business School, “Salary sacrifice is an arrangement you can work out with your current or prospective employer. It combines tax exemptions that exist for your work related training and scholarships with a sacrifice of salary, reducing the net (after tax) cost to you. This allows employers to finance training costs for their current or prospective employees in a win-win way. Additionally, costs related to study, travel, accommodation and subsistence can be paid free of tax, reducing the net cost to the student by up to 47%.” He adds, “Individuals should talk to their HR department about existing internal schemes. Or for more information you can also get in touch with a tax advisory firm to discuss how possible arrangements could work with your employer to take advantage of salary sacrifice.”

Crowdfunding and other creative finance

When you have knocked on all of these doors, you may decide that creative financing is going to be your best option or at least a nice cherry to put on top of these other options like bank loans, government learning plans and crowdfunding. A great place to turn to first is top business schools’ financial aid offices. These individuals want you in their program so they are going to help you find ways that you may not have yet thought of to fund your studies. As EMLYON's Poty points out, "We have one staff member dedicated to counseling candidates in order to optimize their financing plan.”

There are of course bank loans but what you may not know is that many top business schools negotiate very enticing interest rates for participants making this a much more attractive option. Jarvinen underlines this fact, “We have a special loan agreement with the BNP Paribas bank which enables our participants to borrow at the highly preferential rate of 1.45%.” Arnold adds, “Professional and Career Development Loans open to UK residents are bank loans that can be used to help pay for work-related learning at a very interesting rate.” 

In Canada, “There is also the Lifelong Learning Plan (LLP)”, says Vandenbosch. “You may be eligible for the LLP which permits you to make tax-free withdrawals from your RRSPs (Registered Retirement Savings Plan) of up to C$20,000 over several years, to help with MBA funding.” And Michael Schmidt, director of marketing for the OneMBA and EMBA programs at the University of North Carolina adds, “There are numerous funding opportunities which include the GI Bill, the 9/11 Fund, and various organization-based scholarships.” You just have to take the time to dig a bit to uncover all the money that is available to help fund your degree pursuit.

If you feel like getting very creative with your financing, there is always crowdfunding. The options are nearly unlimited with this new approach to financing. Get on one of the crowdfunding platforms such as Indiegogo.com or Kickstarter.com and look at what others are doing to gather money for their projects. Why not make your higher education a community venture? Offer to give mini-MBA classes each month on what you have learned, create a blog about your educational journey or interview fellow classmates to share with your crowdfunding investors. The only limit is your imagination when it comes to this particular financial resource.

With a number of tools and tips in hand you are now ready to take charge of your finances and leave the ‘no money’ excuse behind. Make your bank officer, accountant and school financial aid officer your friends and help them to help you make your EMBA journey a reality.