Returning to college for a Master in Business Administration can be financially daunting. The theories and techniques you study can help you pursue a more successful career path, but the cost of tuition alone can present a barrier to achieving your dreams. Add books and materials to that expense, and you’re looking at a significant investment in the immediate future.
Money should never deter you from an education. Luckily, there are many resources to help you pay for college and budget while in school. In fact, according to the latest report from the National Center for Education Statistics, the amount of financial assistance graduate students receive is on the rise, jumping from $36.7 billion in 2007-08 to $51.7 billion in 2011-12. This assistance came in the form of federal grants and loans, scholarships, employer benefits and other sources. In addition, some simple money management strategies can help you make the most of your income.
Here are a few strategies to help manage the cost of an online degree and stay financially stable throughout your studies:
The following tips can help you balance the cost of an education.
Look for traditional forms of aid
You likely remember filling out the Free Application for Federal Student Aid (“FAFSA”) and applying for scholarships throughout your undergraduate studies. Both of these options are still available to you if and when you decide to return for an MBA; still, the process for applying might not be quite what you remember. For instance, the FAFSA went through some major changes in the fall of 2016. Students could submit an application for the 2017-18 school year beginning Oct. 1, 2016, rather than Jan. 1, 2017. This means that, should you decide to apply for the FAFSA for the upcoming term, you must use tax information from your 2015 filings instead of 2016. In addition, although the federal deadline remains the same, individual states and schools are free to revise their FAFSA calendars as they see fit.
Scholarships often have restrictions and are therefore a little trickier, but you should be able to find some that fit your circumstances. Here are a few available to you regardless of your school of choice or where you reside:
- Elliot C. Roberts Scholarship: Available to first- and second-year graduate students with a demonstrated financial need and studying for a degree in healthcare administration or a similar program, including Master of Business Administration.
- Mary Elizabeth Lockwood Beneventi MBA Scholarship: Available to female MBA students with a minimum grade point average of 3.25.
- Lance Surety’s $1,500 College Scholarship: Available to graduate students enrolled at any accredited American college, university or trade school.
- Wiley CPAexcel Accounting Student Scholarship: Available to full- or part-time students taking at least one accounting course. Winner also receives a free copy of the Wiley CPAexcel Platinum Course.
Review tax incentives
The IRS has credits and deductions designed to ease the burden of paying for college. You may qualify for one or more of these, even if you’re returning to college after spending years in the workforce.
Lifetime learning creditThe LLC can reduce the amount of income tax you pay by up to $2,000 per tax return. To qualify, you must enroll at an eligible school for at least one academic period. Keep in mind that, should the credit you are awarded exceed total amount you owe in taxes, you will not receive the difference as a refund.
Tuition and fees deductionUnless you are listed as a dependent for another person or your filing status is “Married filing separately,” you may be able to deduct certain educational expenses and reduce your taxable income by up to $4,000. The tuition and fees deduction cannot be combined with the lifetime learning credit, so choose the one that makes the most sense for your finances.
Student loan interest deductionIf you’re using a qualified student loan to pay for your MBA and your modified adjusted gross income is less than $80,000, or $160,000 if filing jointly, you can qualify for a deduction based on the interest paid toward that loan during the year. This can decrease your taxable income by up to $2,500.
Business deduction for work-related educationIf you’re pursuing an MBA to maintain or improve the skills necessary to your current work or to meet requirements set by your employer or the law, you may be able to deduct certain educational costs as business expenses. To claim this deduction, you must be working either for yourself or a separate employer.
529 college savings planQualified tuition programs, also known as 529 plans, are created by schools and states and allow you to set up a savings account specifically for college expenses including tuition, books and assorted fees. When it comes to the beneficiary of a 529 college savings plan, there are no age limits, grade restrictions or residency requirements, so you can open one regardless of your age or your degree program. You can also use the funds to pay for an out-of-state school, which may be helpful for you as an online student.
Ask about employer contributions
If you plan to remain with your current employer after graduation, ask your HR department if your company offers any form of tuition reimbursement. You might find your employer more willing to help pay for college than you think. According to the National Association of Colleges and Employers’ 2016 Recruiting Benchmarks Survey, which reviewed 233 respondents, 80.5 percent of employers offer some form of tuition reimbursement.
This encouraging number may be due to the fact that in one case, a widely circulated study from the Lumina Foundation revealed that for every dollar Cigna Corporation invested into its Education Reimbursement Program, the company received a return of $1.29. Hopefully, your business leaders understand a well-educated staff can bring similar benefits.
Review your future salary options
A master’s degree is commonly referred to as an investment, implying big upfront costs of an even bigger payoff in the form of higher wages and a better job down the line. Having a clear view of your future earnings potential can help put these upfront expenses in perspective, making it easier to enroll.
Knowing your future earning potential can keep the cost of an online MBA in perspective.
According to the latest reporting from the Bureau of Labor Statistics, the average worker over 25 with a master’s degree earned $68,000 in 2013. Comparatively, those with only a bachelor’s earned about $12,000 less to reach only $56,000.MBA graduates saw some of the largest wage increases; in fact, many MBA-holding sales agents in the financial sector earned salaries 89 percent higher than people without a post-graduate degree. Their wages reached $170,000 on average, while those without received about $90,000, indicating a potential premium of $80,000. Other business-related occupations with a potential salary increase, according to the BLS, include:
- Logistician: Salaries increased $28,000 to reach $82,000
- Distribution, storage and transportation manager: Salaries increased $28,000 to reach $90,000
- Marketing and sales manager: Salaries increased $30,000 to reach $110,000
An online MBA isn’t something to take lightly, but it is far more accessible than many people think. Paying your tuition may require you to do some additional work on your end, but the benefits of a graduate degree will likely be more than worth it.