You beavered away at your GMAT papers, completed the application questions, wrote your essays and briefed your referees. Lastly, you win that coveted place at business school. Then comes the really big question: how to pay for it?

It is no trivial question. Not only are there the course fees and living expenses, there is the cost of the foregone salary. For a one-year programme, participants can easily write off $100,000. For a two-year programme at one of the top US business schools, the cost can be as high as $200,000. So, for anyone other than the seriously wealthy, outside funding is a must.

The first port of call has traditionally been the banks, but last year’s credit squeeze meant a lot of students had problems raising funds and had to agree to exorbitant interest rates when they did.

The good news is that loans are now available again. One advantage of the credit squeeze has been that many business schools have proved themselves particularly creative in acquiring funding for their students, which means that a range of new products are available.

For American students studying in the US, state and government loans schemes are widely available. For students from the UK, a popular source of funding is the MBA loan scheme administered by the Association of MBAs (Amba) in partnership with NatWest bank, which is available for those students studying on programmes accredited by Amba.

The students who had the most difficulty raising loans over the past couple of years were international students, studying outside their home country. The situation was particularly acute in the US, where funding organisations were reluctant to lend money to students who would return to their home country on graduation, making it difficult to enforce the agreement.

Many international students enrolling at a dozen top US schools this year – including Chicago Booth, the Kellogg School of Management at Northwestern University and the Simon Graduate School of Business at the University of Rochester – have taken advantage of a new loan scheme devised between the business schools and Deutsche Bank, and brokered by GMAC, which administers the GMAT test. The scheme enables business schools to directly access capital markets to get funds.

Kevin Moehn of Moehn Management, which is administering the scheme, says the take-up on the programme has hit expected targets, and he is now looking to extend it to top business schools outside the US, such as London Business School and Insead.

Insead already has an innovative loan scheme, developed by three 2006 alumni. Prodigy Finance, as the company is called, has issued a €50m ($75m) community bond, targeted at Insead alumni and business partners, to raise the money to fund students through the one-year programme.

Scholarships and financial aid
It is the boast of many top US business schools that the admissions process is “needs blind” – that no admitted students are turned away because they cannot afford to attend the programme. At Harvard Business School, for example, nearly 50 per cent of the class receives need-based fellowships, on average about $23,000 for each year of the two-year programme.

Though this type of scheme is popular in the US, and continues in spite of the reduction in endowment income caused by the recession, financial aid is more difficult to come by in Europe and Asia. However, schools such as HEC in Paris are developing this kind of fund.

Scholarships are also far more prevalent in the US. Harvard Business School’s website lists more than 30 different scholarships, funded either through the university or outside institutions. These include scholarships for women, veterans, minority and international students.

The latter category includes the Fulbright scholarships, for British citizens studying in the US, and Mohammed bin Rashid Al Maktoum Foundation fellowships, available to students from the Middle East at more than 20 top business schools around the world. These include Stanford, Duke, Chicago Booth and Michigan in the US; London Business School, Iese and IMD in Europe; and Melbourne Business School, Monash University and the National University of Singapore in the Asia-Pacific region.

Several European business schools are also working hard to increase the number of scholarships available. At HEC Paris, about half of the MBA students receive some sort of scholarship, says Valerié Gauthier, dean of the HEC MBA. However, the average sum is small compared to US standards, at about €6,000.

“In Europe, there is intense competition,” says Prof Gauthier. “At MBA fairs, for example, some students go round the schools and say, ‘I have a 760 GMAT, what are you going to give me?’”

Lots of the smaller European schools do have partial scholarships. Cass Business School at City University in London, for example, has five scholarships of between £10,000 ($16,600) and £30,000, the most generous for a student from South Africa to study in London. Insead focuses on scholarships for students from Africa more generally.

The burden of course costs need not necessarily be met entirely by the student. Data from the FT rankings over the years show that up to 10 per cent of alumni receive assistance from employers. Anecdotal evidence suggests that such funding may be harder to secure, in the current economic conditions.

You are unlikely to leave business school without debts hanging over you. Even Harvard, arguably the most generous business school of them all, points out that the average outstanding debt for the class that graduated in 2009 was $76,958.

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