How to Pay for an MBA

By Kat Tretina | Published on March 2, 2026

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Obtaining a Master of Business Administration (MBA) degree can have a major impact on your career and earning potential, but you should be prepared for sticker shock. The price of an MBA degree can be quite expensive; the cost of two-year MBA programs at top business schools like Harvard Business School, Stanford Business School, and The Wharton School of the University of Pennsylvania can exceed $225,000, covering tuition, fees, and additional expenses.

However, the expense can be well worth the investment. According to recent salary data, MBA graduates often see substantial increases in earnings post-graduation, with many doubling their previous salaries. The average salary for MBA graduates in 2023 was $128,997.

That higher salary can make repayment a bit easier after earning your degree.

Few people can afford to pay for an MBA degree out of their own savings, so student loans can help you earn your degree and advance your career. Here’s what you need to know about your MBA student loans and repayment options.

Federal Student Loan Options for Business School

If you intend to go to business school, your first step should be completing the Free Application for Federal Student Aid (FAFSA); it’s not just for undergraduate students. By submitting the FAFSA, you’ll be eligible for federal and institutional financial aid, including grants, scholarships, and federal student loans.

As an MBA student, you have two federal loan options: Direct Unsubsidized Loans and Grad PLUS Loans.

1. Direct Unsubsidized Loans

Direct Unsubsidized Loans can be used by graduate or professional degree students. Taking out Unsubsidized Loans can be a smart idea, as they have a lower interest rate than Grad PLUS Loans. Because they’re federal loans, you can also take advantage of repayment benefits like income-driven repayment plans and loan forgiveness after you graduate.

• Interest rate: For loans First disbursed on or after July 1, 2024 and before July 1, 2025, the fixed interest rate on Direct Unsubsidized Loans for graduate students is 8.08%.

• Fees: Direct Unsubsidized Loans for graduate students currently have an origination fee of 1.057% for loans disbursed between October 1, 2020, and September 30, 2025. This fee is deducted from the loan amount at disbursement.

• Annual limit: As an MBA student, you can only borrow up to $20,500 per year.

2. Grad PLUS Loans

Grad PLUS Loans are specifically for graduate and professional degree students. Unlike other types of federal student loans, Grad PLUS Loan applicants must undergo a credit check. If you have an adverse credit history — meaning you have major issues on your credit report, such as a bankruptcy or foreclosure — you won’t qualify for a loan unless you add a creditworthy endorser to your application.

Grad PLUS Loans are eligible for federal benefits and protections, including income-driven repayment plans and loan forgiveness.

• Interest rate: For loans disbursed between July 1, 2024, and June 30, 2025, the fixed interest rate for Grad PLUS Loans is 9.08%, the highest rate among federal student loans.

• Fees: Grad PLUS Loans disbursed between October 1, 2024, and September 30, 2025, have an origination fee of 4.228%.

• Annual limit: Unlike Unsubsidized Loans, there isn’t a limit on how much you can take out. You can borrow up to the total cost of attendance, minus the amount of other financial aid you receive.

Private Student Loans for Business School

With federal student loans, you may not be able to borrow enough money to cover the total cost of your MBA. If that’s the case, private student loans can play an important role in finishing your degree.

Private student loans don’t usually have origination fees. In fact, Earnest private student loans do not charge fees of any kind. And, if you have good credit, you may qualify for a loan with a lower interest rate than you’d get with federal loans. Seeking out the lowest rate for your student loans is a good idea if your focus is to pay as little interest during your loan repayment period as possible.

While a cosigner may not be required, especially for graduate students with established credit history, adding a cosigner to your application can increase your chances of qualifying for a loan and securing a more competitive interest rate. Having a cosigner can help you get the financing you need, especially if you’re an international student or don’t meet the lender’s requirements on your own.

Private MBA loans aren’t eligible for income-driven repayment plans or loan forgiveness, but they often have other perks. Earnest private graduate student loans offer the following benefits:

• Interest rate type: While federal loans only have fixed interest rates, you can choose between a variable-rate loan and a fixed-rate loan with Earnest. Opting for a variable-rate loan allows you to take advantage of a lower initial interest rate so you can pay off your loan faster. If you sign up for automatic payments, you will also receive a 0.25% discount on your interest rate.

• Grace period: Earnest private student loans have a nine-month grace period for eligible repayment options, giving you more time to launch your career before you have to start making payments. This grace period is not available if you choose the Principal & Interest repayment option.

• No fees: Earnest private graduate student loans don’t have origination fees, application process fees, or even late payment fees. There’s also no prepayment penalty if you decide to pay off your loan early.

• Skip a payment: Once your repayment term begins (when you graduate or are under half-time enrollment), you can skip one payment a year without penalty.

6 Options to Lower the Cost of an MBA

There are several ways you can reduce the cost of your MBA, reducing how much you need to borrow in student loans.

1. Take advantage of employer reimbursement programs

If you’re currently employed, talk to your human resources department to see if the company offers tuition reimbursement or student loan assistance. According to WorldatWork's "2022 In Review: Total Rewards Inventory of Programs & Practices" report, 80% of organizations offered tuition reimbursement in 2022.

2. Research scholarships and grants

As an MBA student, you may be eligible for scholarships and grants. Unlike student loans, scholarships and grants don’t have to be repaid, and you can combine multiple rewards to lower your education expenses.

To find potential opportunities, use tools such as Scholarships.com, FastWeb, and Unigo.

3. Apply for in-school fellowships

Some graduate schools offer fellowships based on financial need or merit. The fellowship is intended to help support you while you pursue your degree and doesn’t have to be repaid. Unlike assistantships, they do not have a teaching or research requirement.

Fellowships can be offered by your school, but they can also be issued by other organizations. You can use UCLA’s graduate funding database — named GRAPES — to find fellowship opportunities for business schools all over the country.

4. Complete your MBA online

You can complete some MBA programs online. While they are usually the same in terms of cost, they offer more flexibility, so you can finish your work on your own schedule. Online programs can allow you to work full or part-time while you’re studying, and you can use that income to offset the cost of your degree.

5. Enroll in an accelerated degree program

Most MBA programs typically take two to three years to complete. But you could save money by enrolling in an accelerated degree program and finishing your MBA faster. You can complete an accelerated MBA program in just 12 to 15 months. These programs tend to be more intensive than regular MBA programs, but you can graduate and start earning a higher salary sooner.

6. Apply your signing bonus to your loan balance

Some companies offer signing bonuses to attract top MBA graduates. According to U.S. News data, among the 108 ranked business schools that reported signing bonus figures above $0, the average signing bonus for 2023 MBA graduates was $22,776.

And at the top 10 MBA programs where graduates received the highest compensation, the overall average base salary and signing bonus was $210,676, up more than $17,500 from the previous year's top 10 programs.

If you do receive a signing bonus, consider using it to make a lump sum payment on your student loans. Not only will you eliminate a big chunk of your debt, but you’ll also save even more money in interest charges and pay off your debt months or even years ahead of schedule.

Check your rate for free with Earnest

Although an MBA degree can be expensive, it’s a worthwhile investment for your future. Over time, having a business degree can increase your salary and impact your overall earning potential. If you’re considering an MBA and need help with financing, check your eligibility for a loan with Earnest. It's easy and there’s no impact on your credit.