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If you’ve considered all options for free financial aid like grants and scholarships and still need additional financing, then MBA student loans can help.
Students can take out either federal or private loans to cover an MBA degree. These loans will pay for tuition, fees, and most living expenses. Read below to learn more about taking out student loans for an MBA.
In this guide:
- Best MBA student loans
- How to get started when looking for MBA student loans
- Federal MBA student loans
- Best private MBA student loans
- How to choose the best MBA student loan
- Frequently asked questions about MBA student loans
Best MBA student loans
There are two main types of student loans: federal and private. Each has its own benefits and drawbacks, and prospective MBA students should compare them carefully before applying.
|Loan||Rates (APR)||Loan amount||Repayment terms|
|Unsubsidized Loan*||6.54%||Up to $20,500 per year||Varies|
|Grad PLUS Loan*||7.54%||Up to the total cost of attendance||Varies|
|College Ave MBA Loan||1.99% – 9.95%||$1,000 – $150,000||5, 8, 10, or 15 years|
|Earnest Graduate Loan||0.94% – 10.99%||$1,000 – the total cost of attendance||5, 7, 10, 12, or 15 years|
|Ascent Business Loan||1.79% – 14.54%1||$2,001 – $400,000||7, 10, 12, or 15 years|
|Sallie Mae MBA Loan||2.62% – 12.11%||$1,000 – the total cost of attendance||Up to 15 years|
*Federal student loan
How to get started when looking for MBA student loans
When getting an MBA, you should try to borrow no more than you need and keep the interest rate as low as possible. This means you should borrow the maximum amount of federal student loans before turning to private lenders.
Federal student loans have better borrower protections, like student loan forgiveness, long deferment periods, and more flexibility in loan repayment plans.
Federal MBA student loans
To be eligible for federal loans, you have to complete the Free Application for Federal Student Aid (FAFSA) online. The FAFSA is a prerequisite to getting many other types of aid, including grants, scholarships, and work-study.
Once the FAFSA is completed, MBA students will be eligible to take out Direct Unsubsidized Loans and Grad PLUS Loans. Grad PLUS loans have higher interest rates than Direct Unsubsidized Loans, so some borrowers will turn to a private student loan instead of a Grad PLUS loan if they can qualify for a lower rate. You should compare rates carefully before deciding which option is best.
Direct Unsubsidized Loan
The Direct Unsubsidized Loan is available to graduate and professional degree students. There is no requirement for demonstrating financial need, which makes this loan a good choice.
This loan comes with a six-month grace period before repayment begins. Repayment is generally between 10 and 25 years, depending on the repayment plan you choose. Students are eligible for several types of deferment and forbearance programs.
Grad PLUS Loan
The Grad PLUS Loan is available to graduate and professional degree students. Unlike the Direct Unsubsidized Loan, borrowers will have to pass a credit check to qualify for this kind of loan. If you don’t, you’ll have to add an endorser to the loan, which is similar to a cosigner.
There is a six-month grace period after you graduate, leave school or drop below half-time enrollment. Borrowers can choose from a variety of repayment plans ranging from 10 to 25 years.
The rate on the Grad PLUS Loan is higher than the rate for Direct Unsubsidized Loans. If you have good credit or a creditworthy cosigner, you may be able to receive a lower rate with a private lender.
Best private MBA student loans
Private loans for college can give you the additional funds necessary to obtain your degree. Eligibility and rates for private MBA student loans can vary based on:
- Your credit score
- Your income
- Whether you have an eligible cosigner
- The loan repayment term
The companies below have been reviewed by the LendEDU team and are our picks for the best MBA student loans from our partners.
Editorial Selection: Best Overall
- Get up to 100% of school-certified costs of attendance covered
- Your choice between 16 different repayment schedules
- Receive a credit decision in just 3 minutes
College Ave is an online lender that offers loan products for many different types of degrees, including a customizable MBA loan that’s available to students in business school. Here’s more information on College Ave’s MBA loan:
- Fixed rates: (APR) 3.99% – 9.95%
- Varirable rates (APR): 1.99% – 9.95%
- Repayment terms: 5, 8, 10, or 15 years
- In-school repayment options: Deferred, interest-only payments, $25 monthly payments, and full principal and interest payments.
- Grace period: 9 months
- Cosigner release: Available after making more than half of scheduled payments
Why College Ave’s MBA student loan stands out
College Ave offers low interest rates, flexible repayment terms, and multiple repayment options. It also offers a nine-month grace period, while many other lenders only offer six months before payments begin.
Who’s eligible for College Ave’s MBA student loan
U.S. citizens or permanent residents and international students are eligible to apply with a cosigner who is a U.S. citizen or permanent resident. Only students attending an accredited and approved school will be eligible for an MBA loan. Depending on your credit history, you may need a cosigner to be approved.
Earnest is an online lender offering student loans for undergraduate and graduate school, including business school. Here are the key features of Earnest’s MBA loan:
- Fixed rates (APR): 3.24% – 10.99%
- Variable rates (APR): 0.94% – 9.89%
- Repayment terms: 5, 7, 10, 12, or 15 years
- In-school repayment options: Deferred, interest-only payments, $25 monthly payments, and full principal and interest payments
- Grace period: 9 months
- Cosigner release: Earnest does not have any cosigner release options, but borrowers who are eligible to refinance can take out a new loan without a cosigner
Why Earnest’s MBA student loan stands out
One of the most unique benefits that Earnest offers is letting borrowers skip a payment once a year with no fees. This can help borrowers when they have a surprise expense or want to use the funds for a vacation, holiday gifts, and more. Earnest also has a nine-month grace period, one of the longest among private student lenders.
Who’s eligible for Earnest’s MBA student loan
Only full-time MBA students attending an approved school are eligible for an MBA loan, so part-time students do not qualify. Earnest provides loans for students in all states except Nevada. Students must be U.S. citizens or permanent residents or have a cosigner who is a U.S. citizen or permanent resident.
Ascent is an online student lender offering a specific graduate student loan for students attending business school. Borrowers can apply for this loan with or without a cosigner depending on whether or not they meet the eligibility requirements. Here is more information about the Ascent MBA Student Loan:
- Fixed rates (APR): 5.31% – 14.96%
- Variable rates (APR): 1.79% – 11.12%
- Repayment terms: 7, 10, 12, or 15 years
- In-school repayment options: Deferred, interest-only payments, and $25 monthly payments
- Grace period: 9 months
- Cosigner release: Available after 12 months of consecutive on-time payments and meeting eligibility criteria
Why Ascent’s MBA student loan stands out
Ascent is one of the few options available for borrowers who can’t find someone to cosign their loan. Additionally, borrowers who graduate may be eligible for a one percent cash reward.
Who’s eligible for Ascent’s MBA student loan
Students who are U.S. citizens or permanent residents are eligible to apply without a cosigner. However, international students or DACA students will need a cosigner who is a U.S. citizen or permanent resident.
Editorial Selection: Best for Cosigners
- Cosigners can be released after 12 on-time payments
- Defer payments for up to 48 months during internship
- Available for students enrolled less than half time
Sallie Mae offers a wide variety of student loans, including MBA loans. Borrowers can have up to 100% of their costs covered, including tuition, fees, books, and living expenses. There is no aggregate borrowing limit for MBA students.
- Fixed rates (APR): 4.75% – 12.11%
- Variable rates (APR): 2.25% – 11.76%
- Repayment terms: Up to 15 years
- In-school repayment options: Deferred payments, interest-only payments, and $25 monthly payments
- Grace period: 6 months
- Cosigner release: Available after 12 months of on-time consecutive payments
Why Sallie Mae’s MBA student loan stands out
Students can qualify for up to 48 months of deferment during an internship after graduation. This can allow students to take on a low-paying positions without worrying about their student loans.
Borrowers are also eligible for 12 months of interest-only payments after the grace period is over, which adds even more flexibility.
Who’s eligible for Sallie Mae’s MBA student loan
Students must be U.S. citizens or permanent residents or have a cosigner who is a U.S. citizen or permanent resident. Only students who are receiving a full MBA degree are eligible, not those receiving a business certificate.
How to choose the best MBA student loan
While getting an MBA can help set the stage for a successful career, you’re also likely to leave school with a lot of debt. Data shows that the average MBA student borrower graduates with $66,000 in student loans.
By doing research and comparing your options, you can minimize the total debt you take on for your degree.
Here are a few things to keep in mind when applying for MBA student loans:
- Maximize federal Direct Unsubsidized Loans first. Federal student loans are the safest option because they have protections not offered by private lenders. You should take out the max in Direct Unsubsidized Loans first because they typically have the lowest rates offered among any MBA loans.
- Choose between the Grad PLUS Loan and a private loan. The Grad PLUS Loan has the same protections as the unsubsidized loan, but comes with higher interest rates. If you have good or excellent credit and a steady income, you may be able to receive a lower rate with a private lender.
- Choose an affordable repayment plan. Whichever path you choose, make sure you’ll be able to afford your payments after you graduate. By doing this, you can minimize the risk of missing a payment down the road.
If you are still unsure about your financing options, check out our guide on how to pay for an MBA.
Frequently asked questions about MBA student loans
Which MBA student loan is the best?
The best type of MBA student loan depends on what you can qualify for. In general, federal loans offer more repayment options and extra benefits like longer deferment periods. But if you can afford to pay off the loan quickly, then a private loan with a lower interest rate may be a better fit.
Do I need a cosigner for MBA student loans?
If you’re taking out federal student loans, you will usually not need a cosigner. However, if you are considering Grad PLUS loans, a negative event on your credit history may require you to add an endorser, which is similar to a cosigner.
If you’re taking out private student loans, you may need a cosigner unless you have a good credit score and a steady source of income.
Do MBA student loans cover living expenses?
MBA student loans almost always cover living expenses such as housing, transportation, groceries, and more. Make sure to understand what your loans will cover before you take them out.
How much can I borrow with MBA student loans?
The amount you can borrow with MBA student loans depends on the specific lender, but most let borrowers take out the annual cost of attendance. Some lenders may have an aggregate limit, while others do not.
When does repayment on MBA student loans start?
Repayment on MBA loans begins when the grace period is over. For federal student loan borrowers, the grace period lasts six months after you graduate, leave school or drop below part-time status. The grace period for private loans is usually between six and nine months.
Check your official loan documents to see when repayment begins. If you have federal student loans and can’t afford repayment right away, you may be able to defer your loans and delay repayment.
1 Ascent Student Loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 10/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Author: Zina Kumok