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How to pay off business school debt

Once you've secured that MBA, find ways to bring your debt under control.

There’s much debate over whether business school is worth the debt. But if you’ve already committed to a program — or know that an MBA is in your future — there are ways to reduce how much you owe. Many top-tier business schools have loan repayment assistance programs, though you usually need to work for a nonprofit or government agency to qualify.

Average MBA student loan debt

According to the Condition of Education report published by the National Center for Education Statistics (NCES), the average student loan debt for those finishing an MBA in 2016 was around $66,300 — about $11,000 more than graduates in 2012. However, your actual debt load will vary depending on how expensive your individual MBA program is.

What’s the average cost of business school?

The average yearly tuition for top business schools in 2017 ranged from $34,000 to $69,000, according to U.S. News and World Report. However, it notes that most of the programs sit at the higher end of that scale — ranging from $55,000 to $68,000. And those numbers exclude living expenses, books, travel fees and other costs that pop up during your studies.

Repayment assistance programs for business school

Although there are no overarching repayment assistance programs available to graduates of business school, most universities have their own programs to help graduates pay down their student loan debt.

Harvard Business School Social Enterprise Loan Repayment Assistance Program (SELRAP)

Amount

Award amounts vary depending on financial need and how much you make each year:

  • Annual salary of $90,000 or less: Up to $10,000 each year
  • Annual salary above $90,000: Partial coverage
Eligibility requirements

To qualify, you need to meet the following criteria:

  • Demonstrate financial need
  • Graduated 10 years ago or less
  • Received needs-based financial aid during enrollment
  • Full-time employee at eligible nonprofit, public sector organization or for-profit social enterprise
  • Hold federal, state, foreign or private student loans from a bank or credit union
  • Not currently delinquent or in default on student loans

The Harvard Business School Social Enterprise Loan Repayment Assistance Program (SELRAP) was established in 1992 to help graduates working in the nonprofit or public service sectors with their student loan debt. Selection is determined by a committee, which looks at not only your annual income and financial need, but also the type of position you hold and your long-term career goals.


NYU Stern School of Business Loan Assistance Program

AmountUp to $15,000 annually
Eligibility requirements

To qualify, you need to meet the following criteria:

  • Full-time position at an eligible organization
  • Gross salary of $100,000 or less, including bonuses and other compensation
  • Graduated 10 years ago or less
  • Hold student loans used to pay for MBA enrollment

Eligible organizations include:

  • 501(c)(3) that provides a public service
  • Local, state or federal government agency
  • Government organization or nonprofit that provides a public service outside the US
  • Multilateral or international governmental organization that provides a public service
  • US low-profit limited liability company (L3C) or Certified B Corporation

The NYU Stern School of Business Loan Assistance Program was designed to help graduates who’ve chosen to take lower-paying leadership positions at nonprofits, government agencies and organizations dedicated to social service pay back their student loans. Your total award amount is based on the debt you have and your current salary, with those making less than $60,000 qualifying for the full award.


Stanford MBA Nonprofit-Public Service Loan Forgiveness Program

Amount

Award amounts vary based on how much you make each year:

  • Annual income of $95,000 or less: 100% of annual loan repayments
  • Annual income over $95,000: Percentage of annual loan repayments
Eligibility requirements

To qualify, you need to meet the following criteria:

  • Work at least part-time at a qualified nonprofit or a local, state, federal or foreign government agency
  • Demonstrate financial need
  • Hold student loans borrowed to finance Stanford Graduate School of Business

The Stanford MBA Nonprofit-Public Service Loan Forgiveness Program covers all or a portion of your loan repayments for a year, provided you’re working for a nonprofit or government agency — and plan to for the next six months. The exact amount you qualify for is based on your income and financial need.


Columbia Business School Loan Assistance Program

AmountUp to $30,000 per year
Eligibility requirements

To qualify, you need to meet the following criteria:

  • Apply within five years of graduating Columbia Business School
  • Work in a full-time position at an eligible organization
  • Demonstrated financial need during enrollment for school
  • Hold student loans specifically used to fund your Columbia Business School education

While there’s no strict income limit for this program, applicants who earn less than $95,000 are given priority.

Eligible organizations include:

  • 501(c)(3) that provides a public service
  • Local, state or federal US government agency
  • Government or nonprofit organization located outside the US
  • Multilateral or international nongovernmental organization
  • Low-profit limited liability companies (L3C)
  • Microfinance or non-bank financial institutions that focus on low-income customers
  • Social purpose for-profit ventures or businesses — including B Corps — producing products or providing services that either:
    1. Focus on addressing the needs of low-income communities or customers — with an explicit purpose of increasing the welfare of these groups.
    2. Alleviate a market failure and create significant public goods or benefits that aren’t wholly captured in the price charged by the business.

The social purpose for-profit venture or business must also have attracted funding by investors or grant makers who are seeking measurable social or environmental impacts.

The Columbia Business School Loan Assistance Program helps students who’ve decided to pursue lower-paying positions at eligible nonprofits, government agencies and other similar organizations. You must apply within five years of your graduation date, and you could be eligible for up to $30,000 depending on how large your student debt load is.


Duke University Fuqua School of Business’s Rex and Ellen Adams Loan Assistance Program

AmountUp to $8,000 a year for eight years
Eligibility requirements

To qualify, you need to meet the following criteria:

  • Have federal or private student loans used to pay for the Duke MBA—Daytime program
  • Hold a full-time position at an eligible nonprofit, government agency or foreign equivalent
  • Demonstrate financial need
  • Apply within three years of graduation

The Rex and Ellen Adams Loan Assistance Program was established to help Duke MBA—Daytime alumni pay off their student loan debts. If you work for an eligible nonprofit or government agency, you may qualify for up to eight years of assistance, although you must apply for the program within three years of receiving your MBA.

4 tips to pay back business school debt

Getting your MBA may be lucrative, but it’s also expensive. Here are a few tips to make your business school debt a bit easier to manage:

  1. Start paying down interest ASAP. If you’re still in school and can afford to, make interest-only repayments — even if just on your higher-rate loans. This keeps interest from capitalizing and getting added to your principal, making your loans less expensive in the long run.
  2. Apply that signing bonus — and your yearly bonus — to debt. Many companies give MBA grads a signing bonus when hired, so try to allocate most of that toward an expensive loan’s principal balance. Follow this up with your yearly bonus, and you’ll be paying off large chunks of your loans in no time.
  3. Enroll in Public Service Loan Forgiveness (PSLF). If you decide to use your MBA to work for a government agency or nonprofit for at least 10 years, you may qualify for PSLF. This completely cancels federal debt — but you’ll have to make 120 repayments while working for a qualified employer to be eligible.
  4. Consider consolidating or refinancing your loans. Don’t qualify for PSLF? You might want to consider refinancing your private and federal student loans. Your high-paying job might help you score an especially low rate or better terms. Just be aware that you’ll lose any federal loan perks when you refinance.

6 best MBA student loan refinancing options

Compare student loan refinancing offers

Explore your options by APR, minimum credit score, loan amount and loan term. Select the Get started button to start an application with a specific lender.

Name Product APR Min. Credit Score Loan amount Loan Term
Purefy Student Loan Refinancing (Variable Rate)
1.88% to 5.54%
650
$5,000 - $300,000
5 to 20 years
Refinance all types of student loans — including federal and parent PLUS loans.
Credible Student Loan Refinancing
1.80% to 7.74%
Good to excellent credit
Starting at $5,000
5 to 20 years
Get prequalified offers from top student loan refinancing providers in one place.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
1.74% to 6.59%
650
Starting at $5,000
5 to 20 years
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Splash Financial Student Loan Refinancing
1.74% to 6.15%
650
Starting at $7,500
5 to 25 years
Save on your student loans with this market-leading newcomer.
Education Loan Finance Student Loan Refinancing
1.86% to 6.01%
680
Starting at $15,000
5 to 20 years
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
1.74% to 5.74% APR with autopay
650
$5,000 - $500,000
5 to 20 years
Get a tailored interest rate and repayment plan with no hidden fees.
Supermoney student loan refinancing
Starting at 1.9%
No minimum credit score
$5,000 - $300,000
5 to 20 years
Compare options to combine both private and federal debts into one monthly payment.
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Compare up to 4 providers

How long does it take to pay back business school debt?

It depends on how much you borrowed and your salary once you graduate.

Federal student loans typically have terms of 10 years, although there are extended repayment plans that last up to 25 years. Private students loans vary from five years all the way up to 25 years with some lenders.

If you pay every loan on time and don’t enter forbearance or deferment, the loan term gives you a good idea of when you’ll be debt-free. And if you check out some of the tips above, you might find there’s room in your budget to pay off your loan even faster.

Is business school worth the debt?

This depends on your personal, financial and career goals — but in general, business school graduates believe it is.

According to the 2017 Alumni Perspectives Survey Report, graduates who completed business school — with or without receiving an MBA — found the experience worthwhile, both professionally and financially. And although there are only a few business-related positions on the list of top highest-paying jobs, the return on investment of pursuing a graduate business degree may make it worth the debt.

Although you may be taking out a good amount of student loans over the two or three years your program lasts, the average starting salary for people graduating with an MBA is generally quite high.

Top 8 starting salaries for business school graduates — by industry

Average starting salaries for business school graduates was around $63,932 in 2017, according to the Graduate Management Admission Council. However, how much you take home each year varies depending on the industry you’re in and bonuses you receive.

IndustryAnnual salary in 2017
1. Energy and utilities$90,106
2. Technology$72,800
3. Health care$69,000
4. Manufacturing$65,169
5. Consulting$63,876
6. Finance and accounting$60,772
7. Nonprofit or government agency$60,306
8. Products and services$58,172

Bottom line

Many former business school graduates believe it’s worth the cost, but that still means you’ll likely have a good amount of student debt to pay off. Look into whether your school offers any repayment assistance programs first. If not, you might want to consider refinancing your student loans with a private lender.
Or explore more tips for paying off professional student loans.

Frequently asked questions

Should I get an MBA if my company will pay for it?

It depends on your career goals. If you were already planning on pursuing an MBA, then an employer-backed compensation program could be worthwhile. But if you’re already overwhelmed by life and fail to see your situation benefiting from it, you might want to skip out.

Ultimately, it depends on your needs as an individual — even if your boss thinks it would look good on your resume.

Is it worth taking out loans for a top business school?

It depends. The debt you’ll accrue will certainly be higher than lesser-known programs.

But if you already have a stable career or are able to score plenty of financial aid, it might be worth it. The alumni networks at top business schools can be beneficial to long-term career planning.

How can I find free financial aid for business school?

If you have yet to enroll in a program and are looking for ways to finance your education to avoid debt, you may want to look into graduate fellowships, scholarships, assistantships and employer sponsorship. These are usually free or inexpensive ways to get funding before you start checking out federal and private loans for business school.

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