3 Proven Paths to Paying for Your MBA

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Rachel Cruz was raised by a father who has made a career out of teaching people how to get out of debt, stay out of debt and achieve what he calls “financial peace.” It’s no surprise that she didn’t fall far from the Dave Ramsey tree when it comes to her philosophies around managing money. And, like her father, she’s prone to offering succinct, common-sense wisdom, like this little jewel on how to pay for a college degree: “Make money. Go to school. Live inexpensively.”

Crazy talk, you say?

Well, it’s really one of the first lessons any prospective student should learn – a lesson before the higher education begins, so to speak – and it especially rings true if you’re considering an MBA.

Lost in all the discussions the last few years about whether an MBA is “worth it” is the fundamental question of funding. The pundits skip to two obvious questions – how much does it cost and how much more will you earn over the course of your career? – and breeze right by the reality that money to pay for it isn’t growing on trees. They assume that going into debt is the norm, so the solution is to make sure you can get a good enough job on the back end to pay off the debt.

The Point of Earning an MBA

Ironic, isn’t it? Visit with anyone who has ever earned an MBA from a reputable university and they will tell you they learned a great deal about how to build and run a business. That’s the point, right? You need to learn things like how to secure funding, how to write a business plan and how to ensure a business is financially healthy and growing.

It makes no sense to learn those sorts of lessons in financial stewardship while going into debt that you have little hope of ever repaying. So, yes, if you are considering an MBA, you need to consider how much it will cost and what you can expect to earn once you have the degree. But you also need to think through how you can pay for it responsibly and how you can mitigate the costs, because those ideas just might unlock the door to radically improving your return on investment. After all, the less you need to spend on paying off debt after graduation, the more you can spend on other things – your family, your business, charities, investments and the like.

All MBAs Aren’t Created Equal

As you’ll will read in most discussions about picking a school for your MBA, it’s good to start with the reality that all MBAs aren’t created equal. Some universities charge more for tuition and fees than others, and a degree from some universities provides more earning power than others. Prestige is nice, but what you really want is value. And don’t just look at tuition when you consider the costs. You also should think about living expenses. You can’t stop living just because you are in college. (Indeed, some college students live it up just a little too much.)

It costs more to live in New York, Chicago, or L.A. than, say, where I live – Fayetteville, Arkansas. Those who’ve never been here often think it’s in the middle of nowhere, but anyone who actually has been here understands exactly why it ranks near the top of all the lists of great places to live. It has beautiful scenery, world-class museums, Fortune 500 companies, a thriving entrepreneurial community, and far less traffic, crime, congestion or pollution than you’ll find in the typical urban jungle.

And, of course, it’s home to a great business school – the Sam M. Walton College of Business at the University of Arkansas. With MBA prices on the rise across the nation, the Walton College provides high-quality at a reasonable price – both for tuition and the cost of living.

Ah, but that brings us back to that other question – no matter what it cost, you still have to pay for it, so how will you fund this little MBA adventure?

The 3 Proven Paths

Here are three ways that, conveniently, you can combine for even greater results:

Save for it. Many students pursue their MBA mid-career. They graduate, get a well-paying job, save money, and use some of that money to pay for a graduate degree. Even those who pursue an MBA without spending some time in the workforce can find ways to save money to pay their expenses. If you follow Cruz’s advice and live inexpensively, then, of course, you’ll have more money that you can apply toward a degree. For some, that means eating a hamburger instead of a ribeye, while for others it means a regular diet of soggy noodles.

In the olden days, people bought everything this way – even cars and houses. Some people still take this approach. It’s how they get wealthy (not because they are wealthy).

Work for it. The “make money” part of Cruz’s advance seems like an idea that would interest any aspiring MBA student, doesn’t it? Yet, many MBA students wrongly believe the making money part only comes after they earn their degree. They fail to realize it’s an on-going process, and there are a variety of ways for students to go about it. You might go to school part-time, for instance. Or you might take advantage of graduate assistantships and paid internships.

Student who are awarded a graduate assistantship in the Walton College MBA program get a full tuition weaver and can earn up to $18,000 a year while working at least 20 hours a week with top professors. The Walton College awarded 15 graduate assistant position in the 2019-2020 school year, but students also had options for paid internships with the likes of ExxonMobil, Phillips 66, Unilever, Henkel, Mars, Nielsen, PepsiCo, Stephens Inc., Georgia-Pacific, Walmart, Tyson Foods, Deloitte and Land O’Lakes. These internships typically pay around $25 an hour, and some students earn as much as $52,000 during the two years they are working on their MBA.

Apply for it. Scholarships and fellowships provide financial aid to many who qualify – and many qualify. There also are a variety of awards available. At the Walton College, for instance, a need-based scholarship pays $12,000. Academic scholarships also are an option. At the U of A, the Russel E. Westmeyer Fellowship awards $9,000 a year to first-year students. The Ecklund Family Scholarship provides $2,000 a year to students in the supply chain management or entrepreneurship and innovation disciplines. The Karthikeyan Sennimalai Scholarship provides $1,800 to an international student. The MBA General Scholarship is $1,000. And students who take part in the Global Business course can apply for the $1,500 that comes with the Global Immersion scholarship and helps fund their study abroad trip.

MBA students who put in the work on the front end tend to spend less of their own money and creatively find ways to earn money that helps them avoid debt that sucks the “return” out of their ROI. They apply for everything they can, work hard, and sacrifice in the short term because they know it will pay off in the future. As a bonus, they’ve personally put into practice many of the organizational principles they learn in their courses, and it’s hard to put a price tag on that type of financial peace.