Student Loans
An MBA course is usually expensive and some people may have to take a loan to finance their MBA education. These students can take loan from private as well as public sources. A student loan, especially for MBA is for a 2 year duration and repayment starts after one year of graduation. Various loan agencies have various loan repayment schedules. There are primarily two types of loans that an MBA student can avail of:
  • Federal Loans
  • Private Loans
Federal Loans
Federal loans are the most cost effective way to borrow for your MBA education. They have low interest rates and a deferred payment schedule. There are four main federal loan programs available. A student interested in taking a federal loan has to submit a Free Application for federal Student Aid (FAFSA).
Sallie Mae is a private organization that provides loans for education. The Sallie Mae website www.salliemae.com has all the requisite information about Federal loans.
It has a special section on MBA loans that gives information about eligibility criteria, types of loans and application process. You can also apply for a loan from this website. Click here for Salliemae MBA loans section.
Types of Federal Loans:
Tip: See our International students loan section for details on how international students can apply for loans.
Stafford Loans
There are 2 types of Stafford Loans:
  • Subsidized Stafford loans are need-based, and interest does not accrue on these loans while you are in school, during a six-month grace period immediately preceding repayment, and during authorized deferment.

  • Unsubsidized Stafford loans are not need-based, and you are responsible for all of the interest that accrues on the loan, including while you are in school.
    Eligibility
    • You must have submitted a FAFSA to be eligible for a Stafford loan.
    • For subsidized Stafford loans, you must have financial need as determined by your school.
    • You must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
    • You must be enrolled or plan to enroll at least half time.
    • You must be accepted for enrollment or attend a school that participates in the Federal Family Education Loan Program.
    • You must not be in default on any education loan or owe a refund on an education grant.
      • Source: www.salliemae.com
Graduate Plus Loan
Graduate Plus are federal loans that are tailored made for students who want to pursue graduate studies. Graduate Plus applicants must exhaust their Stafford Loans eligibility before applying for this loan. Remember that a credit history check if required for this loan. Stafford loans have interest rates lower than Graduate Plus loans.
    Eligibility
    • You must have submitted a FAFSA to be eligible for a Stafford loan.
    • A credit check is required.
    • You must be a U.S. citizen or national, a U.S. permanent resident, or an eligible non-citizen.
    • You must submit a FAFSA.
Private Loans
Private companies also provide loans for graduate studies. These loans are however costly as compared to federal loans. Approval rates are high on these loans.
    Eligibility
    • You must be a U.S. citizen or permanent resident, or a foreign borrower applying with a creditworthy U.S. citizen or US permanent resident.
    • You must have no student loans that are delinquent or in default.
    • You must meet the credit criteria established by the lender.
    • You should apply for Stafford and Graduate PLUS loans first and need additional funding beyond the limits of the Stafford loan.
    • Full-time, half-time, or less-than-half-time graduate students are eligible.
    • Eligible programs include business administration, marketing, accounting, finance, economics, taxation, and Executive MBA.
Here is a good website for further information about private MBA loans www.mbaloans.com.
International students loan section
International students can also avail of loans in US for their MBA. International students can be classified as those who are not US citizens and who attend/plan to attend a US educational institution towards a full time MBA degree. There are several loan options for international students.
Some of the loans available for international (non US) students are:
    Eligibility criteria for international students
    • Enrolled full time at an university approved by the U.S. Department of Education
    • Are working on an undergraduate or graduate degree
    • Have an eligible U.S. cosigner who is a U.S. citizen or permanent resident.
    • You must meet current credit criteria.
    • Students must be making progress toward their degrees.
    Tips:
    • It is highly recommended that students apply for federal loans before applying for private loans.
    • Students should always maximize federal loan offerings before applying for a private loan.
    • Every Business School has a financial aid office that will offer advice on federal and private loans. They may also have tie ups with various loan providers.