ONLINE MBA GUIDE
How to Pay for Your MBA
It’s no surprise that one of the biggest worries for students these days is the price tag that comes with earning a degree. It can feel like the costs just won’t stop. In this section, we’ll look at all the expenses associated with getting your online MBA so you know exactly what to expect. It’s important to remember that a program isn’t necessarily superior just because it has a higher tuition. Being informed about what you’re spending can help you pay less in the long run.
The average cost for students who
enrolled in a public online MBA program
was a total of
Source: U.S. News and World Report
According to U.S. News, in 2017-2018, the average cost for students who enrolled in an AACSB-accredited online MBA program was just under $30,000 a year. If you’re wondering what makes up that total, we’ll dive into the specifics of what factors go into how online programs are priced throughout this section.
It’s very common for online programs to be less expensive than on-campus programs, although that’s not always the case. Remember that every program and every school is different, so doing in-depth research on the cost breakdown is paramount to making sure you’ll be able to foot the bill.
Technology is prevalent in just about every part of our lives. Education is no different. With the robust and interactive online learning platforms many schools offer, people from all over the world can have access to education from their very own homes.
The recommended budget
per year for
textbooks and supplies:
The College Board recommends that students budget about $1,200 a year for textbooks and supplies, but this amount may be less for online learners since much of the material required for courses is also available in electronic format. If you’re considering enrolling in an online program, there a few things to consider beforehand so you can factor cost of materials into your school budget.
Be conservative about your budget – Just because you’re in an online program doesn’t mean all of your books and materials will be available online. Courses can still require that you purchase printed textbooks.
Do your research – In addition to asking if all courses have online texts, it’s a good idea to ask if textbook fees are already included in tuition. Many forward-thinking schools include the cost of books in their tuition prices, while some schools will give you a proposed budget of how much you should expect to spend on materials.
Choose your textbook format carefully – Do you know that you work better with online formats because they’re easily accessible? Remember that you can still take notes on a computer, but maybe a physical book suits your needs more.
Be proactive – If you get your books through the university’s bookstore, don’t be afraid to ask if you can rent any of the books instead of purchasing them. You can also email the professor ahead of time to ask if the edition of the textbook is important, as older editions may be cheaper than newer ones.
Turn to your public library – It’s in your best interest to see if your public or university library has a copy of your textbook. Furthermore, consider checking the databases for texts or articles to reserve or request from another school’s interlibrary loan system. This could mean huge savings.
Don’t shy from used textbooks – While used textbooks may not look as nice, they’re definitely going to be cheaper. Besides, you never know, maybe its previous owner took copious notes that could prove to be very helpful!
When you’re learning online, there’s a lot of work that goes into presenting the material to you in an engaging and interactive way. All of the technology involved in online learning means that someone has to build it and maintain it, so don’t be surprised if you see the number one online degree program fee pop up: the technology fee.
From the school:
- Often referred to as a “distance learning course fee”
- Billed on a per-credit hour or per-term basis
- Covers improvements, online learning platforms and tech support (usually 24/7)
- Upgrading or maintaining high-speed Internet, even when you travel
- Computer programs and repairs
If you read the previous parts of our guide, you’ll remember that there are two ways to earn your degree with an online component—100 percent online or using a hybrid approach. If you’re enrolled in a hybrid degree program, you’re responsible for learning online as well as attending scheduled on-campus lectures or discussions. However, sometimes, even if you’re degree program is taught only online, you and your classmates may still be required to visit campus for a few days each term.
Costs to factor in:
- If your company pays for your MBA tuition, you may still be responsible for covering your own flight costs
- Food and transportation expenses during your visit
Academic Services Fees
Occasionally, you may come across some less obvious fees, depending on the school. Some online programs require you to pay fees for academic guidance. These fees range from per-class to overall degree completion check-ins. Be sure to look online or call each school you plan to apply to and ask them what fees are included in their tuition, because most students don’t think about these smaller pieces of their education.
Assessment fees – These are used to offset costs of placement exams, evaluating placement scores and transfer coursework
Graduation fee – This fee is used to offset costs of conferring a degree and issuing a diploma or certificate
International application fee – International students are required to pay a one-time fee when they apply
Tuition for online learning is the cost of the courses you take, which is separate from the cost of books, materials, miscellaneous expenses and the fees we explored in the above section. Most schools charge tuition based on credits hours. This means that each class you take is worth a certain number of credits, typically based on the number of classroom hours required per week in a respective term. So, for example, if a term for a school is a semester, the school may determine a unit of credit as equal to at least three hours of work per week for a semester.
As mentioned before, it’s common for online tuition to cost less than on-campus tuition. This may not be true if a school has high technology costs, however. It’s possible that online programs will offer a variety of payment options, but it’s important to check with every school on their payment policies.
Did You Know?
Have you heard of tiered tuition? This means that many schools will decrease the rate they charge per credit if you take enough credits to be considered full-time. This encourages you to take more classes at the same time, allowing you to stay on track and graduate faster. This may work against you if you take a few classes here and there, as you will end up spending more money over time.
Another thing to take into consideration is in-state versus out-of-state tuition. In general, it’s safe to say that out-of-state students will pay more for tuition, but some schools don’t charge more for those living in a different state. Make sure you check the price per credit, as some schools can have several hundred dollars’ difference between in and out-of-state tuition. It’s up to you, however, to determine if relocating offsets the cost of an out-of-state tuition.
Whatever you do, never assume you’re not eligible for financial aid. Financial aid is usually the reason most students are able to go to school, so let’s take a look at what types of financial aid are available and what you can do to see if you qualify for these types of aid.
undergraduate and graduate
students received a total of
in grants from all sources,
Federal Work-Study, federal loans,
and federal tax credits and deductions.
In the same time frame,
students borrowed about
from nonfederal sources.
Also from 2016-2017 loans
for graduate students constituted
of the funds they used to supplement
their own resources, while grants constituted
*CollegeBoard Trends in Student Aid 2017
There are two types of loans offered by the federal government, subsidized and unsubsidized.
- Offer slightly better terms for a student’s aid
- Available to undergraduate students who have financial need
- The school determines how much you can borrow
- The U.S. Department of Education pays the interest
- while you’re in school at least half-time
- for the first six months after leaving your school
- if you are deferring (postponing) the payment of your loans
- Available to undergraduate and graduate students
- Students are not required to demonstrate financial need
- The school determines how much you can borrow
- Students pay the interest during all periods
What determines how much aid you are eligible for? For subsidized loans, the school will determine how much you’re eligible for based on your financial need. For unsubsidized loans, the school will determine how much you receive based on cost of attendance and other financial aid you are receiving.
How do you determine if you’re eligible? You must be enrolled at least half-time in a school that participates in the Direct Loan program (another name for these type of loans). In general, you must also be enrolled in a program which leads to a degree or certificate upon completion of the program. Remember, though, for unsubsidized loans, for which graduate students are eligible, you do not need to demonstrate financial need.
How do you apply for a loan? The first step is to complete the Free Application for Federal Student Aid, or the FAFSA. The information provided on the FAFSA is how schools will determine how much student aid you are eligible to receive.
A Note on Interest
Don’t forget that you are responsible for paying back the full amount of the loan plus the interest that accrues. Student loan interest is compounded daily, meaning that your interest rate is divided by the number of days per year and you are charged daily based on the outstanding balance for the day. Federal aid interest rates are fixed rates for the life of the loan, so paying back the full amount each month once you are responsible for making payments is key, as you will pay less over time. This works with each loan payment going towards the interest and the principal (the original amount of the loan). While payments go towards interest first, the remainder goes to the principal. The lower your principal, the less you will have to pay back over the life of the loan.
*Federal Student Aid, an Office of the U.S. Department of Education
Don’t forget about these gems. Scholarships are “free money.” With scholarships, you’ll never have to pay back the money you receive. This type of aid is usually merit-based, meaning that your accomplishments, history or background will make you eligible for them. Often, organizations, community groups and nonprofit agencies provide scholarship opportunities, with the U.S Department of Labor providing a database with more than 1,000 scholarships available for graduate students.
When it comes to your MBA, there are specific scholarship you should look out for.
Recruitment scholarship: This is reserved for students who are going to add something unique to the school. If you feel like you have a special background or skill, own it!
Need-based fellowship: If a school offers this, it will look at your income for the past three years, as well as your assets, to determine if you are in need of aid from the school.
Merit-based fellowship: This is a very competitive type of aid, and it is usually reserved for students who want to study in a specific area.
As Benjamin Franklin said, “An investment in knowledge pays the best interest.” Even though going to school for your MBA is expensive, over time it can pay off in a myriad of ways. Continue on to our next section to learn more about life and career opportunities after graduation.
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