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How to Pay for Your MBA?
In 2016, the average student loan balance for MBA graduates stood at $66,300. Even if eligible for scholarships or employer tuition reimbursement, students will typically bear the majority of the tuition costs. Consequently, many students resort to student loans. Refer below for an overview of available student loan options.
Take Out A Federal Student Loan
MBA students have the option to secure federal loans to fund their education. There are two categories of federal loans accessible to MBA students: direct unsubsidized loans and direct PLUS loans.
Direct unsubsidized loans come with an annual cap of $20,500 for graduate or professional students. If the cost of your MBA program exceeds this limit, you can apply for a direct PLUS loan. The annual borrowing limit for a direct PLUS loan is the total cost of attendance minus any other financial aid received. As of the 2022-23 academic year, the interest rates stand at 5.28% for direct unsubsidized loans and 6.28% for direct PLUS loans.
To seek a federal student loan, you must complete the Free Application for Federal Student Aid (FAFSA). The FAFSA will request details on your income, assets, and more to assess your eligibility for financial assistance.
Take Out A Student Loan Through Juno
If you opt for pursuing an MBA, a strategy to alleviate the expenses is by securing a low-interest student loan via Juno. Juno’s lending partner provides student loans tailored for MBA students with terms spanning from five to fifteen years, featuring highly competitive interest rates.
Applicants have the choice between fixed or variable interest rates. Fixed-rate loans maintain a consistent interest rate over the loan duration, while variable-rate loans adjust based on market conditions.
Fixed interest rates vary from 2.99% to 6.24% APR, while variable interest rates range from 0.94% to 5.95% APR. The interest rate offered is influenced by factors such as credit score, income, presence of a co-signer, and the chosen loan term.
Typically, shorter loan terms come with lower interest rates, while longer terms entail higher rates. Shorter terms lead to higher monthly payments but provide the advantage of lower overall interest costs. On the other hand, longer terms result in lower monthly payments but higher total interest expenses. It’s advisable to evaluate your financial situation before selecting a repayment term, ensuring the monthly payment aligns with your budget.
Juno’s lending partner refrains from imposing fees for origination, late payments, or prepayments. Though not mandatory for graduate students, including a co-signer may lead to reduced interest rates. A co-signer, usually a parent, relative, or close acquaintance, commits to assume responsibility for your student loans in case of default.
Conclusion
Pursuing an MBA is a significant decision that should be taken with seriousness. Assessing the potential drawbacks and benefits is crucial to determine if an MBA aligns with your goals and aspirations. Before deciding, consider your current career trajectory, financial situation, time commitments, and long-term objectives. Ultimately, an MBA may only be necessary for some, but for those who do pursue it, it can open doors to new opportunities and enhance their professional capabilities. So, it is essential to carefully weigh the pros and cons before embarking on this challenging journey.