Financial Implications of Studying for an MBA
The MBA (Master of Business Administration) qualification was first established in the USA in the early 1900s, but was not adopted by European educational institutions until the 1960s.
The MBA still remains the most popular postgraduate degree qualification in the world and is widely considered to offer the best passport into a high level career in business management.
The UK averages 10,000 students annually who commence an MBA. Due to the eligibility criteria, the majority of these will be over 25 years of age and will already have experience of working in a managerial position.
Despite having the benefit of a secure income, many MBA candidates will find the financial investment involved in studying for their degree a huge challenge and may have to research other options rather than self-funding.
With the tuition fees for an MBA costing anything from £3,250 – £65,000 and the average being £24,500, many will seek financial support from other donors.
Many large companies are prepared to offer their employees sponsorship or funding if they want to further their career with a business related qualification. Special consideration is generally given to those members of the workforce who could add value to the organization through acquiring an extra area of expertise which will help them to fulfill their role more effectively.
This type of sponsorship is normally linked to a loyalty agreement which the employee will have to sign committing them to a specified period of employment following the attainment of their degree. Failure to comply with the agreement will lead to a financial penalty being imposed.
Employees can approach their Departmental Manager or the HR (Human Resources) department of their company to find out if such funding is available from their employer.
The Professional and Career Development Loan
The PCDL is a financial scheme run in conjunction with the Learning and Skills Council (LSC) and participating UK High Street banks, currently Barclays and The Co-operative Bank. It is available to anyone unemployed, self-employed or in full or part-time employment.
A PCDL is basically a bank loan which the student will take out with one of the participating financial providers, for any amount from £300 to £10,000, repaying the debt on completion of the degree course.
Where the scheme differs from a conventional agreement is that the LSC will pay the interest on the loan for the duration of the student’s study period and for a month after completion. Following this time, the student will resume repayment at the fixed rate agreed at the commencement of the loan term.
Rates of interest charged under the PCDL scheme are set to be competitive with those charged for personal, unsecured loans from other financial providers. The current rates offered by the participating banks are set at 9.9%pa, equivalent to 5-6% APR over the full term of the loan.
Funding through Higher Education Institutions
One of the primary sources of funding for scholarships and bursaries comes from universities and HEIs (Higher Education Institutions) and is accessed through three main channels.
Research Councils make funds available for any students who wish to study for a PhD or Master’s degree, although they may only be available for specific courses.
Endowments are generally offered to a University or HEI by past alumni to be awarded, in their name, for the funding of a specific degree course or to a student studying a particular area of expertise.
This sort of funding is notoriously hard to secure with a strict criteria for eligibility being demanded by the donor. They generally provide only partial payment of the course fees and, although some endowments are made annually, many are in the form of a one-off award.
The Government Hardship Fund is available to all UK and EU students and is allocated through the HEIs to support those students who wish to study for a degree and have the necessary academic requirements, but are facing some kind of financial hardship.
All of the individual universities and Higher Education Institutions will have their own eligibility criteria for acceptance for funding and students should apply through the Student Finance Office prior to the commencement of their studies.
Ian Wright loves to help people get the education they need. He writes for FinancialTraining.co.uk, which helps students from the UK and around the world discover their financial education options with British universities.