How Veterans Can Finance Their MBA

Estimated reading time: 9 minutes

Thinking about how to finance your MBA can absolutely be a stressful point to anyone looking to attend a top-tier school.  The good news is that there are more options than just your GI Bill for graduate business school

The average cost of a full-time MBA from an average school, according to Investopedia, is $240,000. This includes tuition, books, cost of living, as well as lost income during two years of being a student. That’s some serious cheddar.

Their assumptions are: $40k/year for tuition, $20k/year for boarding and books, and then $60k/year in lost earnings.

And when you start looking into more prestigious schools, especially in places with a higher cost of living, you can expect to pay even more. 

Below is from Harvard Business School (HBS): 

That price tag can seem absolutely staggering. But there are a variety of options, especially as a veteran, to help you pay for your degree. 

VA Options to Finance Your MBA

You likely already know about these, as they are the most popular options for service members to use to pay for higher education. But as I will describe later in the article, there are more ways to do this than you may think — and you could even end up making money in the process. 

GI Bill

The most obvious one that veterans will plan on using is their GI Bill. I’m assuming that almost all of you reading this will be using the Post-9/11 GI Bill. If you are still under the Montgomery GI Bill, this may not be as pertinent to you.

My grandfather went to school on the GI Bill, my dad went to school on the GI Bill, and I will go to school on the GI Bill. This piece of legislation has been one of the most impressive and enduring mechanisms of support to veterans — you should absolutely take advantage of it. 

Ok, actually, let me say that as loud as possible with no room for misinterpretation:

USE.

YOUR.

GI.

BILL.

(ANOTHER LINE FOR EMPHASIS!)

The Servicemen’s Relief Act, aka the GI Bill, is a life-changing opportunity for veterans and you should absolutely take advantage of it. 

The main point of differentiation in the GI BIll is between public and private schools. 

If you use the GI Bill to attend a public school, you can expect that your cost of attendance will be significantly reduced. The Choice Act is a unique piece of legislation more or less compels public schools to charge all veterans in-state rates. Each school has different policies, but most will charge an in-state rate for veterans attending their schools who change their residency to that state while they are there. And if you are considered in-state, the GI Bill then mandates that all your costs of tuition and fees will be covered (depending on your percentage of benefits). 

What does this mean? It means that if you go to a public school and have 100% GI Bill benefits- you will not pay anything to the school. 

That’s a game-changer when it comes to financing your MBA.

And even if you have less than 100% GI Bill coverage, your cost of attendance will still be significantly cheaper. 

Yellow Ribbon Program

The Yellow Ribbon Program is a truly awesome program. Schools can elect to contribute a certain amount up to what the VA provides through the GI Bill. Currently, the maximum rate the VA will provide is $25,162.14 per academic year. That means that the school can choose to match up that amount, and then the VA will ALSO MATCH THAT. 

Quick note: the Yellow Ribbon Program is currently only available to those who are receiving the maximum rate- meaning you need 100% Gi Bill benefits to be eligible. 

Let’s go back to our HBS example, data provided by the HBS Armed Forces Alumni Association : 

After some intense, all-night math sessions (I am a former infantryman after all), I was able to calculate that the estimated cost of attendance for two yeas at HBS is $222,204. 

If you’ll notice, this does not include lost wages, as the previously stated number includes. 

For a veteran using the GI Bill and receiving a Yellow Ribbon match, the annual cost is $20,748. This means the total cost of your MBA is now $41,496. That’s a significant change in how you finance your MBA.

Now, a huge factor not mentioned in the expenses is travel. Honestly, I’ll likely have to do a whole other post on this at some point. But if you think this isn’t a significant cost-the average MBA student spends $21,295 on travel during their two years. 

This is all to say that you should think long and hard if passing on public schools is really best. It may be- but strictly from a financial point the argument is weak considering that public schools like Michigan Ross, UVA Darden, Berkeley Haas, UCLA Anderson, and Texas McCombs all have business schools in the Top 20. 

There are exceptions, which I will mention later. Additionally, there are anecdotal stories of many veterans I’ve encountered who went to private schools who still ended up paying nothing. That data is hard to find and really can only be found through talking with veterans at that private school. If you are interested to get a better idea of how veterans there finance their MBA you need to talk to someone there.

For a full list of the top MBA programs and their Yellow Ribbon Program matches, check out this article.

Voc Rehab

I wrote a whole article about voc rehab which you can find here. 

The main point that I will highlight here is that the best time to apply for voc rehab is RIGHT AFTER YOU GET YOUR DISABILITY RATING. The more you wait, the longer the VA may have to deny your application. 

Scholarship Options

You may be thinking, “what do I need scholarships for? I have the GI Bill or am using voc rehab?” 

Here’s the craziness. If you get scholarships past the GI Bill or voc rehab, you may be able to just pocket that money. 

Yes, you read that right. 

So while you’re classmates are stressing the hundreds of thousands of dollars in student debt, you could conceivably walk away with money as a student. 

I happen to know a veteran at Haas who was awarded a prestigious merit-based scholarship. Guess where that money went? All to her. How much? $80k. 

Now, this doesn’t mean that goes to beer and barbecues. It can. But you will also still have expenses like housing (for the months that BAH doesn’t cover), cases (for some schools), travel, clothes, and student associations. That all can add up. 

Look at this through a surplus mindset. The money is there and the people in charge of doling it out want it to go to students. Don’t rule yourself out of the equation just because you are using the GI Bill or voc rehab. 

There are lots of private scholarships out there that go unused every year. People, these organizations WANT TO GIVE OUT THIS MONEY. It helps their brand and image and makes them feel good. 

The schools you apply to may also have merit-based scholarships. These are usually evaluated with a needs-blind lens, meaning that they are awarded just based on the strength of your candidacy — not whether or not you NEED the money. Schools want to award this money. Let them decide if you are worth the scholarship, and if they decide that, it means they really want you. So don’t have any shame about taking that money. 

What could you use that money for besides the stuff I just mentioned?:

• Starting a business 
• Travel
• Anything you want. 

Important note: Any funds received beyond your qualified educational expenses are considered taxable income. For an official list of these expenses, check out the IRS’ website here. 

School-Specific Scholarships

There’s also a number of schools that have endowments and scholarship funds just for veterans. I happened to write about that on another site, and you can find that list here. 

Private Scholarships

To access the list of private scholarships that are meant specifically for veterans, check out this post on the site. 

Also, a good resource to start on this search is Scholly. A year membership is $44.99/year. Even if you earn just one scholarship, that’s well worth it. In looking for a return on investment in financing your MBA, a $45 subscription that nets you a single $1,000 scholarship just returned over 2000%. I’m not planning on going into finance after my MBA but even I can see that’s worth it.

Federal Loans

If you are still looking for funds after the GI Bill and the Yellow Ribbon Program, and you’re applying to scholarships on the side, the first place you will want to start is federal direct unsubsidized loans. 

Note: Also know about direct SUBSIDIZED loans, but these are only available for undergraduate degrees. 

In order to be eligible, the financial aid office at your school needs to identify your need. These loans cap out at $20,500/year. 

Currently, the interest rate on these loans is at 6.6%.

Private Loans 

You can also look at using private loans. Especially if you are unsure about what it is you really want to do after your MBA, but still need money, then looking into income-driven plans may be your best bet. Basically, these try to tie how much you pay on your loan into how much you make. 

There is also a startup created by HBS grads (HBS getting a lot of love in this one) that pools students together who need student loans and uses that to leverage better rates for those students. Called LeverEdge, they claim their process can save you $14,736 — $15,635 over the life of your loan compared to federal loans. 

If you are thinking about heading back into the public sector, you should also know about Public Service Loan Forgiveness, where your student debt can be wiped clean after 10 years of public service. 

Future Earnings

In looking at how you can pay off loans, many will argue that you will be able to quickly do so with the increased earnings in your post-MBA career, your signing bonus after graduation, and additional bonuses during your first few years after graduation. 

You know what this argument reminds me of? That E-4 who goes and buys a brand new Mustang after deployment because “well, I have all this deployment money.” Don’t finance your MBA like that guy.

Yes- odds are in favor of you being able to quickly pay off your student loans with this newfound wealth. 

OR, you can keep that money for yourself and use it to do literally whatever else you want that doesn’t involve paying back the bank. How do you do this? Maximize benefits and prioritize applying to public schools or schools that have dedicated veteran scholarships where you can ensure you will graduate with little to no debt. 

Then instead of using your bonus to pay back loans, you can invest it, buy a house, take your family on that huge vacation, or save it for a rainy day. It’s now your money and you can use it however you want. 

My kings and queens, after leaving the military you have a host of options available to you to pay for your education. Take advantage of these opportunities. The world is your oyster so grab the hot sauce and horseradish and start shucking.

Related:

Military to MBA (Part 1/7): Is It for You?

5 Reasons Enlisted Don’t Go To Top Grad Schools

4 Business Programs for Veterans

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