The Ultimate Guide to Paying for your MBA

Getting mentally prepared for the MBA is a daunting task, but even worse if the though of the financial cost of going to a well know business school to be able to get that increase in your salary and job of your dreams. 

Now almost 4 years after getting my degree, I’m still feeling the financial pain, especially when I decide to take a lower paying job to travel less and have a better work life balance.

But I don’t regret the decision at all. I was able to make the jumps in my career that I wanted, I have a nice new fancy title, and I am proud of my accomplishments so far and all that will come next.

Budgeting for Business School

I made a lot of changes in my finances before attending ESADE Business School. I cancelled cable, sold off unused items, cancelled my gym membership, and found every way possible to make an extra penny and cut down my expenses.

I tried not to spend more than $20 a week on groceries and lunch, have stopped drinking as frequently and most gruelling stopped going to concerts, one of my absolute favorite things to do. But you know, in the end it was all worth it.

One of the best steps that I took was mapping out an MBA budget for those 15 months that I was studying full-time. Seeing the figures before making the decision to go ahead helped me to see that is was feasible to achieve my goal with a bit of sacrifice. 

Getting a Loan for the MBA

I decide to go with a Sallie Mae Smart Options Student Loan, that is a private loan, so less of the nice perks, that a very low interest rate, government loan would have.

But because I was studying outside of the US and my business school was not set-up to receive funding from the US government it was the best option for me. Had I know that I would be living in Europe after the MBA, I would have looking into options for European banks as well. 

Sallie Mae usually delivers the student loan in 3 instalments throughout the year. Mine looked like this for a Sept to May school year:

  • First Instalment – $34,000 – received Aug
  • Second Instalment – $34,000 – received Sept 
  • Third Instalment – $34,000 – received Jan

Total loan: $102,000

I asked for $102,000 to cover the tuition, as well as,  for living and other expenses.

Knowing that you will be out of work for 1-2 years when taking on a full-time MBA, it is important to take living expense into consideration.  

I estimated that my total living + miscellaneous expenses would be around: $50,000 for the 15-months.

You’ll have to do some calculations to determine what is the right amount for you.

MBA Tuition

The tuition will vary greatly depending on which school you decided to attend. My school required us to pay two big sums to reserve our place in the upcoming class.

Theses “reservation fees” had to be paid, in cash, before even getting to the school.

It had been a huge financial burden to come up with the money, but the good thing is that money can still be used for living expenses as I have applied for a full tuition loan.

I’ll get it back once my loan is funded.

The rest of the tuition payment would come in two instalments and be taken directly from my Sallie Mae loan funds, which are sent directly to the school.

  • First Reservation Fee – $11,000 
  • Second Reservation Fee – $7,500
  • First Instalment – $39,000
  • Second Instalment – $21,000

I was able to reduce me costs of tuition by getting a marketing scholarship fo 5,000€.

  • Marketing Scholarship – $6,130

Total tuition: $72,370

Living Expenses

I was able to calculate living expenses from the information provided by the school to help you budget well.

I figured out all of these costs by going on the upper end of the range provided to ensure that I am covered, no matter what. Except for food, I know I’ll stay on the lower range.

  • Housing –  $13,500 ($900 x 15 months)
  • Utilities – $3,000 ($200 x 15 months)
  • Food – $6,000 ($400 x 15 months)
  • Transport – $750 ($50 x 15 months)
  • Misc – $7,500 ($500 x 15 months)
  • Sports – $1,125 ($75 x 15 months)

Total Living Expenses: $31,875

Additional School Costs

Besides general living expenses there are a few educational costs that I needed to account for in my budget.

Because I was going to a school outside of the US, I budgeted in language courses.

As well as “study tours” which are a fancy way of saying school trips.

And the very popular MBAT, the MBA Tournament (sports competition) helps in HEC every year. This is mostly open to European Business Schools.

It was loads of fun and you get to meet MBA from all over. We also happened to come in first in the salsa competition. Ole!

  • Elective Language Training – $2,000
  • Study Tours – $4,000 – 5,500 
  • MBAT – $800

Total Additional School Costs: $8,300

Other Expenses

I’m also added another $10,000 to finish paying off my undergraduate student load and the interest on my MBA loan while in school instead of deferring the interest.  

Total Other Expenses: $10,000

Tuition (- scholarship) – $72,370

Living Expenses – $31,875

Education Expense – $8,300

Other Expenses – $10,000

Total Cost of the MBA: $122,545

Phew! There is a good sum of money, but after all a very good investment in my future.

Now that the finances are out of the way, let’s move on to some other costs you might not be thinking about. 


Undergraduate Student Loans

If you decide to attend a school in the US, deferring your undergraduate student loan is an enticing option when you’re getting ready to take on the financial burden of spending a few years without an inflow of funds.

Keep in mind that if you decide to attend a business school abroad there is no opportunity for a deferment. This was my case. And I can honestly say that I am happy that I kept paying for my loans during the MBA.

Now, three years post-MBA, I have eaten a big chunk into my MBA loan and have completely paid off the undergraduate one. 

When thinking about you options, remember that you will be multiplying debt. But if you monthly payment are unsustainable when you have no income, this could be the right choice for you.

Extracurricular Travel

The ah ha moment that I needed to put in more for travel came when watching an episode  Anthony Bourdain’s No Reservations focused on Spain.

Whether or not you go to a Business School outside of the US, you are going to be traveling.

With students from all over the whole, spring break to let loose, and educational experience, not to mention the trips to other countries for weddings of your new international friends, they is a sizeable need for a travel budget if you want to take advantage.

You might say, I’m just here to study, not to travel, I don’t need to think about it.

But the reality is, when you get into school and you are enjoying being “funemployed” for a while, you’re going to want to use this opportunity well.

I decided on about $10,000 quite arbitrarily, just to give myself a number and a limit.

You can decide if it is right for you to budget this in.

At the end of the year, I of course hope to not have spent this money in full and any surplus I can use to start paying back my loans early. 

MBA Abroad: The Visa Process

The Student Visa process for Spain (and I’m sure many other countries) is quite trying. There are a plethora of forms and documents needed and if you start too late, you might find yourself out of time before you need to hop on that flight overseas.

Not only must you budget your time to get through this lengthy process, you must budget your money because it’s going to cost you more than a few bucks to get everything you need.

When to start applying for a visa:

I think the correct answer here is as soon as you’ve been admitted and researched the process. I learned that it’s never too early. I left on August 16 and started the process on April 8. And that was cutting it close.

The background check can take up to 8 weeks and the visa application takes a minimum of 4 weeks. Not to mention I’m sure you’ve got a lot of other things on your plate.

The Process for Spain:

  1. Obtain FBI Background Check with Apostille Certification (plus one copy)
  2. Book Appointment for Student Visa with consulate in your state
  3. Get Letter of Acceptance from you chosen school
  4. Get Global Health Insurance with minimum coverage of €30,000
  5. Provide Proof of Financial Means (a.k.a. student loans or savings that show you can survive in the country for the amount of time necessary to obtain your degree – $1,000 per month of stay)
    • One of the following:
      1. Letter from the school claiming full financial responsibility for your studies (often included in acceptance letter)
      2. Proof of financial aid of scholarship for at least $1,000/mo for room & board
      3. Notarized letter from your parents assuming $1,000/mo for your room & board
      4. Personal bank account showing $1,000/mo
  6. Obtain letter from your doctor, or Medical Certification, indicating that you are in good physical and mental health and free of diseases (plus one copy)
  7. Show US Driver License, US State ID, or Current Student ID
  8. Show and leave Passport with the consult while they evaluate your documents
  9. Get 2 Passport Photos with white background (to be stapled on your application form)
  10. Fill out and sign 2 Copies of Application Form
  11. Purchase Money Order for application fee

The Costs:

  1. Finger printing for background check – $15 
  2. FBI Background check – $18 
  3. Global Health Insurance – $500 (a full year is paid up front)
  4. Doctor Appointment – $15 
  5. Passport photos – $8
  6. Application fee – $140 

Total costs: $696! Ouch!

Yet another expense to add to the budget sheet.

Make sure you investigate all of the requirements for your visa well ahead of time. You will be running around to get a lot of paperwork together, so best to start as early as possible.

The expenses really add up from GMAT to application fees to reservation fees, this is one pricey venture.


Cutting Expenses

I started preparing for this financial hurdle of Business School almost two years before I started studying.

I tried being a crazy coupon lady, but found out just how much time it takes and just how uninterested I was in putting my effort there.

But after reading many personal finance blog I found a few great ways to cut my expenses and make a little extra dough.

10 Ideas to Cut Your Expenses

1. Canceled your gym membership without paying a fee – I saved $469 
I decide to move back to my parents house (also another way to save) for a few months before attending ESADE Business School.

So it was a great opportunity for my to use my new address as a reason to cancel. And lucky I did because I saved hundreds!

This didn’t mean that I didn’t work out, just that I spent more time running and taking part in races that cost far less. Check out my guide to the 10K for a free training plan.

Check the terms and conditions of your membership to see if this could be a great idea for you.

And if you’re looking for a much more affordable way to work out, I’m going to take this opportunity to plug the application that I work for Mammoth Hunters.

2. Cancel your magazine subscription – I saved $25 
It you have many subscriptions you could be walking away with a lot more than I did. It was a small cut, but nonetheless, that is a few more meals worth of savings.

3. Downgrade to just internet – I saved $387.63
There are so many options now to get much cheaper entertainment than paying a cable bill. I have Netflix and Amazon Prime Video.

Just use an Apple TV, Roku, or just your laptop and you have everything you need at a fraction of the cost. And…

4. Get the family plans – I saved $132.62

…since Netflix & Spotify allow you to have a family account, why not get your family members or friends together to share the monthly costs. You can even live in different countries and benefit.

My whole family does it and when benefit a lot from the great (and inexpensive) entertainment.

5. Bring lunch to work – I saved~$1,120 (at ~$40 a week) 
This is huge! I was working in New York City before the MBA and lunch could run me anywhere from $5 to $15 a day!

Take a little extra time on the weekend to plan your meals for the week and prepare your Tupperware so that you won’t be tempted to just eat out because you don’t have time.

I started using Amazon Prime Now for home delivery of groceries. It really helps me to compare prices and place the order while I’m at work to not waste time.

It’s a great option for ensuring you stick to your plans of not eating out.

And they have excellent customer service. When an order of mine was missing an item I was refunded and given a discount of $10 on my next order.

I make sure to bring a lunch 4 days a week and have Thursday’s as my cheat day or eat out day, just to not feel so restricted.

6. Try 30 days eating at home (that means no take out!) – I saved ~$750 
Depending on where you live going out to dinner can be a serious drain on your budget. To have a decent meal in can run you from $40 – $100.

Just think about all that you can save just doing this for one month.

Tell you friends that you are doing a challenge. They’ll completely understand, because likely their budget is also under strain.

And why not do it together?

You can always plan dinner parties where everyone makes a dish. Make it fun and it won’t feel like you are losing out.

Or just join them for a drink after dinner so that you can reduce your costs instead of cutting them out completely.

7. Sign-up to be a volunteer – I saved $100

I am an avid runner, so when the opportunity came to do another relay race with friends I really wanted to take advantage but the cost was quite high when I was trying to save.

But, I saw and opportunity to both work on my marketing skills and get a discounted entry into the race by signing up to be a volunteer.

It really helped me cut costs. And I felt great being involved in promoting the race.

8. Transfer credit card balance – I saved ~$300
If you have a credit card balance you’ll want to get rid of it before starting to take on more debt.

I wanted to get rewarded for my spending, but I didn’t want to take on another balance.

So, I looked for opportunities to reduce my interest rate by transferring the debt to a lower interest credit card that had a balance transfer offer.

It saved me on interest and helped me pay down the debt before starting Business School.

9. Sign-up for the library – I saved around $80
This suggestion is not going to be for everyone, but most of the MBAs that I know are pretty avid readers.

I must say that I wasn’t an early adopter for digital books, because I love flipping through the page of a new read.

But I’ve become quite take with my kindle. I take it with me everywhere and I love this stylish case I found.

The New York Public Library has a digital book borrowing site that gives you a loan for 14-21 days. It was a true Godsend when I was looking to cut on one of my good vices.

You can also find downloads online for free and Goodreads often send your deals about books in your list.

Check out this post for my list of the top books that every MBA needs to read!

10. Reduce your rent by moving or sharing – I saved ~ $3,550 
I found that living expenses were one of the top things weighing down my pre-MBA budget.

So, I decided to take the ultimate Millennial decision and move back in with my parents to save money in the last two months before my MBA.

The wonderful benefit was I got to spend a lot more time with my family especially right before I would be moving away.

Not everyone is going to have the same choice, maybe for you renting a cheaper place is an option, or even getting on AirBnB.

8 Ideas to Make Extra Money

1. Count your coins – I earned $49.63

A lot of us keep spare change around and forget about it. While not count it and take it to the bank. You’ll find that you might have a sizeable chunk of cash to gain.

2. Sold electronics and furniture on Craigslist – I earned $535

Many of you will be moving cities to take on the MBA, so instead of taking everything with you start downsizing.

I was able to sell a bunch of furniture and older electronics on craigslist and a few hundred dollars. It pained me to get rid of all of my good quality stuff, but it was worth it.

3.  Take surveys online – I earned $104
Upromise gives you a percentage back on spending and has a partnership with eRewards where you can make Upromise money by taking surveys.

4. Sold unused items on eBay (mostly handbags and running gear) – I earned~$900
On eBay you don’t have to pay fees until you sell something.

This was a very good way to start doing some spring cleaning.

I’m actually going to reactive my account now to great rid of some of the things I have accumulated over the last few years that I haven’t touched.

eBay is so simple to use, and I have to admit that I got quite a rush selling products there, seeing the bidding go on and hearing the sound on my phone.

5. Participate in Focus Groups – I earned $200

Often times you can get rewards with gift cards and other goodies if not cash directly. But this can help to increment your earnings either way.

With just two focus groups I was able to earn $200 in gift cards. All for just my opinion.

6. Get a rewards debit card – I earned $127

I’m not a big fan of brining on adding debt for more benefit, so why not get a rewards debit card. This way you will make money back when you spend cash, not build debt.

7. Sell old CDs to – I earned $150 

I’m sure you’ve got a lot of old CDs hanging around that you haven’t listened to in years. You might as well make a little money off of them.

With Secondspin you just select your CDs from their site and get an estimate of what you will get back and mail them in and receive a check.

Simple and also helps you to do a bit of a clear out.

8. Tutor online – I earned $257

I tried one site called Preply to earn a bit of money as a tutor. While I don’t really like their business model (you never get paid for the first lesson they take it as commission), it was a nice introduction to the world of online tutoring.

I made a good relationship with someone who was in the process of applying for her MBA and we made a deal for a series of classes until she completed her applications.

You can also take up tutoring in person and avoid the commission if have a good network of people who need your skills. Just ask around.


Now that you know much more about the costs, that you maybe were not thinking about, you can make a more informed decision about whether or not you are financially ready for the MBA.

Let me know what you thought about this article from the poll below! I’d love to hear your feedback.

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7 thoughts on “The Ultimate Guide to Paying for your MBA

  1. Pingback: The 15 Best Books for Business School Students - Repeat One, Repeat All

  2. Sheryl Isaacs

    Just found your personal finance page, and once again, you are my hero. I need your amazing information you are so kind to share, more than you will know. Thank you for saving me and my family from myself and my bad money habits. Please always post on this topic. Thank you.

    • Aayesha Natasha

      I will! I haven’t posted in awhile about personal finance, but I’ll be sure to share something soon! Best of luck in managing your finances! 🙂

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