How Do I Choose The Right MBA Student Loan?

Register for the webinar!Student loans are an essential part of many students’ b-school financing strategies, but they’re rarely user-friendly. You’ll face a multitude of options, and it’s up to you to decide the right loans for your situation. We’ll help you determine the right amount of student loans for your situation in our upcoming webinar, but for now, let’s take a look at the different loan options for MBAs and the general pros and cons of each.

At the highest level, you could borrow three types of loans to pay for your MBA: family loans, personal loans, and student loans. Not everyone has access to the first option of course, but if you do have a family member willing to provide the cash upfront, you could negotiate a great, low-cost funding source. Meanwhile, personal loans are usually far less preferable to student loans: Personal loans rarely offer interest rates lower than 9%, and most importantly, rarely offer in-school payment deferment options, meaning you’ll need to start repaying your loan as soon as you start school. Therefore, we’ll focus on student loans, the category of loans that are most broadly available and effective for MBAs.

There are two types of student loans: federal and private. U.S. citizens and permanent residents are eligible to apply for federal student loans and many private student loans, while international students cannot obtain financing from the U.S. government and should look to their schools’ financial aid office and private programs for financing sources.

The key federal loan programs are Direct Unsubsidized Loans (commonly known as the “Stafford for grad students”) and Direct PLUS Loans. Both offer fixed interest rates, which are set annually following the government’s auction of the 10-year Treasury note in May. At the time of writing, the interest rates are 6.21% and 7.21%, respectively, for these loan programs, and each comes with an added origination fee. This fee is common when borrowing both federal and private student loans, and is usually charged as a percentage of your total loan principal. For example, a 2% origination fee on an $80,000 loan means that a fee of $1,600 is added to your loan balance before your interest rate is applied. The origination fee is 1.073% for the Direct Unsubsidized Loan and 4.292% for the Direct PLUS Loan. Another federal loan program for which some borrowers may be eligible is the Perkins Loan program (which has no origination fee), but this is only available for those with exceptional financial need. If you’re eligible, you’ll be notified after you complete your FAFSA, or the Free Application for Federal Student Aid. Completing the FAFSA online is the first step to obtaining any federal aid.


Why would someone choose federal loans, or choose one loan program over another? Federal loans feature the government’s borrower protections, such as Income-Based Repayment to help those who struggle to meet their monthly payments under the standard loan plan. You can read all about these loan options and protections on the Department of Education’s website. When it comes to the specific federal loans mentioned above, you can only borrow up to $20,500 annually in the lower interest rate Direct Unsubsidized Loan – a limit that many MBAs will easily exceed given the costs of business school. Therefore, aside from the relatively few borrowers eligible for a Perkins Loan, it can make sense to borrow the first $20,500 of your loans via the Direct Unsubsidized Loan program before looking at other loan options.

The other option that many MBAs consider is private student loans from a financial institution like a bank or credit union, or a lending platform such as CommonBond. Private student loans come in more shapes and sizes than federal loans, including fixed and variable rate options. When taking out a loan through a private lender, as a rule of thumb, you’re likely to get lower interest rates on loans with shorter terms. (Lenders charge less interest for shorter terms because they assume less risk in lending for a shorter period.) Depending on the lender, you may find that private loans offer lower rates than the government options, so you might opt for private loans if you want to lower overall interest costs.

The tradeoff when choosing a private lender is that private loans do not come with the same borrower protections as federal options, e.g., you might get deferment and forbearance with a private lender, but you probably will not have an option to adjust your monthly payments based on your income (as you can using the government’s Income-Based-Repayment plan, for example). You should spend time researching private lenders to make sure that it offers basic borrower protections you need, such as in-school deferment. Our recommendation: Call up a lender’s customer service team and talk to someone there. This is a great way to explore your options and make sure you feel comfortable with the lender, especially if you need to ask questions in the future.

In the case of CommonBond, we offer an MBA Student Loan with two options at rates of 6.40% or 6.85% APR, respectively. As mentioned previously, CommonBond borrowers forego federal loan protections but have access to CommonBond-specific protections, like CommonBridge, a program where we help borrowers who are in-between jobs. If you have any questions at all about private loans, get in touch with our Care Team at care@commonbond.co or give us a call at 800-975-7812, and we’ll be happy to help.

MBA 5 Fatal Flaws

Kaitlin Butler is Content Manager at CommonBond, a student lending platform that provides a better student loan experience through lower rates, superior service, a simple application process and a strong commitment to community. CommonBond is also the first company to bring the 1-for-1 model to education and finance.

Related Resources:

Know Before You Go: Paying for Your Columbia MBA
• CommonBond’s Story: A Revolution in Student Loans
• Is it Worth it to Get an MBA?

Show Me The Money

You may get accepted. You may get rejected. Either way, you need to answer one question: "Now what?"

I’ll give you a little advice…everything is negotiable.

On a day like today, I’m doing my happy dance.  My MBA clients have been contacting me with good news from the schools to which they applied.  Several of them have multiple offers with scholarships attached, which immediately present the question:  Can they negotiate their scholarship offers?

Since most of you have yet to take your MBA negotiations class, I’ll give you a little advice…everything is negotiable.  You have an offer of admission and unless you did something egregious that the schools discover in their background research, the school will not take that offer away from you.  In fact, the schools want you to come to their programs so much that they’ve offered you scholarships, tuition discounts, or graduate assistantships to entice you away from other schools.  You are in the power position, but you have limited time to act.

If you have multiple scholarship offers, you have even more power.  So play the schools off each other.  You will need to provide proof of funding and develop a clear statement of what it would take to have you deposit and attend that school.  If school A matches school B’s offer, go back to school B and ask for more.  Many schools have some wiggle room with scholarship offers.  And the worst-case scenario is that school A will say “no” to your request and then there is no harm and no foul.

Caution: While you may be in the power position, remain likeable, respectful and courteous. Don’t shoot yourself in the foot by coming off as arrogant.  And if you have deposited at a school, you have diminished your position of power.

If you need additional consultation on this matter, we are available to help you construct the communication that in the words of one of my former clients made his “investment in Accepted.com a very positive ROI.”

Download your copy of MBA Admissions A-Z: 26 Great Tips

Natalie Grinblatt Epstein By , an accomplished Accepted.com consultant/editor (since 2008) and entrepreneur. Natalie is a former MBA Admissions Dean and Director at Ross, Johnson, and Carey.

Related Resources:

• How to Pay For Your MBA Webinar
• Alumni Funded Student Loans: An Interview with Daniel Macklin of SoFi
• MBA Choices: Dream School vs. Scholarship School?

Know Before You Go: Paying for a Columbia MBA

How will you pay for your MBA?

How will you pay for your MBA?

Financing a degree that costs around $200,000 is a daunting task, and personal finance can be a challenging topic to discuss among young professionals. We know how hard it is to start this conversation, so before we show you how to pay for your MBA in our upcoming webinar, we’d like to share the perspective of Sonya*, a Columbia Class of 2015 MBA. Here’s how she’s thought about financing her MBA since the time she was first admitted and how she’d revisit her strategy with a second chance.

First, here’s more on Sonya’s background: She came to business school with an audit background from a New York City firm and “felt fine about [her] finances, comfortable enough” when she decided to apply for her MBA. She knew she’d be paying her own way through school. She chose her schools based on location, opting for East Coast programs in order to have better access to New York’s tech startup scene. Sonya submitted her three applications in Round 2 and ultimately received her acceptance to Columbia Business School in February. By April, she decided to attend and put down an approximately $2,500 deposit for tuition.

“For two months, I was basking in the glow of ‘hey, I’m going to business school,’” Sonya said. “Then the financial aid office rained on my parade.” Columbia’s financial aid office reached out in June to remind Sonya of loan application deadlines and upcoming payment due dates, and that’s when the cost finally clicked. “I hadn’t really thought of financing until then,” said Sonya. “It certainly wasn’t a factor in my school selection at all,” though she did make sure she applied before Round 3 in order to be eligible for scholarships at her target schools.

Sonya quickly crunched the numbers and reviewed her existing savings, including brokerage accounts and retirement savings. She decided to use student loans to cover all of her tuition costs and her savings to pay for her living expenses, keeping some retirement and brokerage accounts intact to provide a cushion post-MBA.

After one year as an active MBA student at Columbia – “I loved it!” – Sonya sat down to review her finances again, this time with a crystallized career objective: join one of a handful of NYC fintech startups after graduation. After both summer and in-school internships, Sonya had a realistic idea of what her salary would be on this career track, and salary, she advised, is a number that all prospective MBAs should start with when planning to finance their degrees.

“I can still join a startup despite my loan burden, but everyone’s situation is different of course,” Sonya said. The savings she hadn’t touched as an MBA would become a big asset in transitioning to her full-time role.

Now that Sonya is just weeks away from graduating Columbia, what’s her advice for new MBAs? “Think about the costs much earlier than I did, perhaps before even applying for school or taking your GMAT. Think, ‘What’s the financial cost involved, and am I pursing a field that will be able to sustain this debt? Is it worth it to get an MBA?’” Sonya has realized that while she’ll be able to pursue her target salary within her preferred startups, there’s a wide, wide range of startup salaries out there for MBAs, and she’s encountered peers who will need to make tough decisions about their chosen paths come graduation given their student loan costs. Also, Sonya advises new admits to think about financing earlier in order to leave time for a scholarship hunt. In her own experience, starting this search during the June before matriculation eliminated the majority of her potential outside scholarship options.

“For me, it was an amazing two years, and I wouldn’t have changed my decision at all,” she said. “But while I’m okay financially, I should have been more proactive and really looked at my salary after graduation when deciding to get my MBA.”

*Name changed at interviewee’s request.

Download your copy of MBA Admissions A-Z: 26 Great Tips

Kaitlin Butler is Content Manager at CommonBond, a student lending platform that provides a better student loan experience through lower rates, superior service, a simple application process and a strong commitment to community. CommonBond is also the first company to bring the 1-for-1 model to education and finance.
Related Resources:

Is it Worth it to Get an MBA?
How Much Will a Top MBA Earn You
• CommonBond’s Story: A Revolution in Student Loans

3 Ways to Make Your Own Student Loan Luck

Not sure how to fund your MBA? Listen to this podcast for pointers.

Luck can’t pay off student loans, but YOU can!

“Diligence is the mother of good luck.”  – Benjamin Franklin

If you’re one of the 37 million Americans with student loans, you know it’s going to take a lot more than a few four-leaf clovers to make your debt disappear. You wouldn’t rely on winning the lottery in order to pay your loans, would you?  Unfortunately, neglecting to understand the various loan repayment options can be just as foolish, because you may be missing out on opportunities to reduce or even eliminate your debt burden. Essentially, leaving your loans to chance could mean leaving money on the table.

Rather than wait around for good fortune to find you, take a proactive approach by seeing if one of these three options apply to you:

1.  Spend money to save money
. All education loans, whether federal or private, allow for penalty-free prepayment, which means that you can pay more than the monthly minimum or make extra payments without incurring a fee. Prepaying may sound painful, but the benefits can be huge. The more you do it, the sooner you’re done with your loans – and the less interest you spend over the life of the loan.

Let’s say you have a $100,000 student loan balance at a 6.8% interest rate and 10-year term. If you increased your monthly payment by just $100, you’d save about $5,600 in total interest and pay off your loans about a year early. Or perhaps you pay down an extra $2,000 per year using your annual bonus, saving yourself about $7,400 in interest and paying off your loans about 1.5 years early. Every borrower’s situation is different, but you can do the math on your own loans with a calculator like this.

One thing to note – prepaying is most effective when the extra cash is applied directly to your principal, rather than being earmarked for future payments.  It’s best to check with your loan servicer to see what their policy is before increasing or adding extra payments.

How to get lucky: Commit to increasing your monthly student loan payment each time you get a raise and/or putting a percentage of every bonus toward your loan balance.

2.  Recalibrate your rate
. One of the fastest ways to slash your student loan burden is to lower the interest rate on your loans, which can only be accomplished through the act of refinancing. In addition to reducing the amount of interest you pay on your loan over time, refinancing can allow you to make lower monthly payments or shorten your payment term (so that you can be done with your loans sooner).

Student loan refinancing is still a relatively new option, so many borrowers who could be eligible to refinance aren’t even aware the opportunity exists. Which is unfortunate, because the savings can be significant.  For example, the average SoFi borrower saves $9,400 when they refinance with us.*  In addition, some private lenders offer additional benefits to borrowers when they refinance, such as complimentary career coaching and entrepreneurial support.

How to get lucky: When shopping around for a refinance lender, be sure to compare interest rates as well as other potential benefits.

3.  Ask for forgiveness. What borrower hasn’t fantasized about winning the lottery and paying off their loans in one fell swoop?  Unfortunately, you’re more likely to get hit by an asteroid than win a seven figure jackpot. So what’s the next best thing? How about making your student loan balance magically disappear.

It sounds too good to be true, but this is the basic idea behind student loan forgiveness. Surprisingly, there are quite a few ways to get your loan slate wiped clean, but the most well-known one (and the one that applies to the most people) is the government’s Public Service Loan Forgiveness (PSLF) Program. Under the program, borrowers who work full-time for a qualifying public service organization may be eligible to have federal loans forgiven after 10 years of on-time monthly payments.

Before you skim over this section and assume that PSLF won’t apply to you, consider this: The CFPB estimates that about one in four working Americans has a job that meets the definition of “public service”, and yet they believe a “substantial sum” is left on the table by borrowers who don’t take advantage. This may be because the definition is broader than what most people would expect – for example, soldiers, doctors at non-profit hospitals and public defenders are all examples of professions that may qualify a borrower for PSLF.

How to get lucky: Find out if you qualify for PSLF or other forgiveness programs by contacting your student loan servicer.  

*SoFi average borrower savings assumes 10-year student loan refinancing with a weighted average rate of 7.67% and a loan balance of $86,000, compared to SoFi’s median 10-year rates of 5.875% (with AutoPay).

This post is by Anna Wolf and originally appeared on the SoFi Blog. SoFi connects alumni borrowers and investors to refinance private and federal student loans.

Learn how to use sample essays to create an exemplary essay of your own!

Accepted.com: Helping You Write Your Best

Related Resources:

• SoFi: Alumni Funded Student Loans
Tips for Financing Your MBA
• PayScale: How Much You Can Earn, and How to Earn It

The AAMC Fee Assistance Program: How & Who Should Apply

Click here for more tips and advice for medical school!

Application fees shouldn’t prevent aspiring doctors from pursuing their dreams.

Applying to med school isn’t cheap (see our breakdown of costs here), and the AAMC understands that not all applicants will be able to cover these costs.

AAMC’s Fee Assistance Program was created with the conviction that application fees shouldn’t prevent serious aspiring doctors from pursuing their dreams because of financial obstacles.

Let’s take a look at some of the program details…

Subscribing to the Fee Assistance Program

To apply for financial assistance, applicants must fill out the Fee Assistance Program application BEFORE they register for the MCAT, submit the AMCAS application, and subscribe to Pivio.

Note: The award from this program MAY NOT be used retroactively. If applicants already paid for certain application components, they will not be reimbursed.

You can use the application guide to help you with your Fee Assistance Program application.

You will receive an answer from AAMC within 15 business days after submitting your application.

Fee Assistance Program Eligibility

To be eligible for assistance from the AAMC, you must:

• Be a United States citizen, U.S. National, a lawful permanent resident (LPR) of the U.S (“Green Card” holder), or have been granted refugee/asylum or Deferred Action for Childhood Arrivals (DACA) status by the U.S. government.

• Have a reported household income 300% or less than the 2014 national poverty level for the equivalent family size.

• Submit parental financial information and supporting tax documentation.

• Not have already been awarded fee assistance five times (the lifetime maximum).

 Note: Awards expire December 31st of the calendar year after you were granted assistance (for example, if your application is approved January 1, 2015 through December 31, 2015, then your fee assistance will expire on December 31, 2016). If you reapply for benefits the following year, your current award will expire as soon as you’re new award is granted.

2015 Fee Assistance Program Benefits

MCAT benefits you will receive include:

• Reduced registration fees from $300 to $115 in MCAT testing year 2015 (for exams taken through December 31, 2016).

• Copies of The Official Guide to the MCAT® (MCAT2015) Exam and other official MCAT practice products ($125 value).

• Up to $500 towards the psycho-educational or medical evaluation (sometimes required for your MCAT accommodations application).

Medical school admission benefits include:

• Free access to the Medical School Admission Requirements website through December 31, 2016.

• Waiver of AMCAS application fees (for one application with up to 15 med schools). Must be submitted by December 31, 2016.

Pivio benefits include:

• $25 yearly subscription to Pivio for up to two years ($100 value).

Download your free special report: Navigate the Med School Maze!

Accepted: The Premier Admissions Cosultancy
Related Resources:

• The New MCAT: What’s Hype, What’s Real and What You Can Do Today
• How Much Does Applying to Med School Cost?
How to Write the Statement of Disadvantage