MBA Student Loans

Best Bet Graduate Business School Financing

You’ve moved beyond the undergraduate degree and you’re onto graduate business school. Now there are more reasons to choose your student loans carefully. At this stage of the game, your college debt could escalate exponentially. Find out what loans are right — and which are wrong — for your MBA degree.

Let’s talk about private MBA loans.

Sallie Mae offers the Smart Option Student Loan for graduate students. They offer low variable and fixed loan interest rates that are competitive with federal PLUS Loan for Graduates. There are no origination or prepayment fees, and they offer three repayment plans. They also offer incentives for paying monthly through automatic account debit. You can check the loan package with an up-to-date comparison chart on the Sallie Mae website.

What makes them different from general private student loans? Loans like these package high loan limits, a key feature, and they aim to give you greater financial flexibility. Unfortunately, with the unsubsidized federal Graduate Stafford Loan, you meet an aggregate loan limit — $138,500 for non-medical grad students. This means that if the cost of education exceeds this (and you’re eligible to receive your maximum allowance) then private loans may be an option.

Always borrow on federal loans first.

Why?

They offer extremely good interest rates and flexible loan repayment terms. Basically if you fail to apply for federal loans, you are losing money, unnecessarily running up more student debt than you may be able to afford.

Federal Loan Programs for MBA Students

Hands down the most popular grad student loans are the Graduate Stafford Loans. Unsubsidized Staffords are available for almost everyone, but interest begins accruing from the date of disbursal until it’s fully paid off. However, the interest rate is locked in for the life of the loan, and it is tax-deductible. There are four repayment plans to choose from, and it is not credit-based. (Subsidized Stafford Loans, which did not tack on interest until graduation, are no longer available to graduate students.)

Exhaust your annual maximum on your Stafford Loan first, and then consider the MBA Stafford Loan, which offers a low interest rate and comes in both forms: subsidized for those with financial need and unsubsidized, which means any eligible student can get one. The amount you can apply for depends on whether you have taken out other Stafford loans, on your year in school and your status as a student (dependent or independent). You must be enrolled at least half time in an eligible program of study. It is federally guaranteed, and since it can be consolidated with your other federal loans after graduating; private loans cannot be consolidated with federal loans.

You can also consider the Grad PLUS Loan. This is not based on need, but on your creditworthiness. You will need to pass a credit check, but if you have good credit, you should not need a cosigner to apply for the loan. If not, you can apply again with a cosigner, someone you know with good credit. The beauty of the Grad PLUS Loan is its financial flexibility and relatively low interest rate. Borrow the balance of your education costs once you’ve subtracted the other financial aid you’ve been awarded. It can be applied to tuition, room and board, supplies, lab expenses, and travel.

Paying Back Your Loans

The unfortunate drawback with grad school is that it can cost you many thousands of dollars. Most of your financial aid will likely be in loans, federal and private, ranging from low-cost to expensive. While you have hopes for a lucrative career, what happens if your financial situation simply cannot handle the debt? Have you been delinquent on payments? Do you struggle to make ends meet? Do you have multiple student loans? You may be a candidate for a loan consolidation. Take our self-assessment quiz right now and find out if this is an option for you.

Loan Consolidation

The Federal Consolidation Loan is part of the Direct Loan Program and the Federal Family Education Loan Program (FFELP). You can merge your multiple federal loans into one, usually with a much smaller monthly payment.

Have private loans? Then check out the consolidation loan options with your private lender.

The secret to student loan consolidation: Don’t wait until you’ve defaulted on student loans to seek financial help. Consolidation loans are nearly as commonplace as standard student loans.