Finding Financial Aid for Business School

Finding financial aid for business school is a snap as long as you know where to look. Between loans, scholarships, grants, and other financial aid programs, you can easily scrounge up the resources to pay for your education.

Here's a brief breakdown of all of your options, with information on how to apply for each.

FAFSA.

You probably applied for federal financial aid when you were an undergraduate. If you did, you likely remember that the process begins by completing the Free Application for Federal Student Aid (FAFSA). By answering questions about your financial situation (or your parents' financial situation if you're still a dependent), you'll get access to the maximum aid possible for your education.

To be considered for federal aid, you'll need to complete the FAFSA form. Registration opens October 1, and aid is applicable for the following academic year. (For example, if you wanted federal aid for the 2020–21 school year, you could start applying October 1, 2019.) The U.S. Department of Education recommends filing your FAFSA as quickly as possible to receive the most aid. You'll need to gather several items before you start, including copies of your tax returns and any previous financial aid documents. The FAFSA website lists everything you'll need and provides a step-by-step guide to filling out your application.

Once you've been approved, the government will send you a copy of your financial aid package.

Types of student loans.

The U.S. Department of Education provides more than $120 billion in federal student aid each year through grants, loans, and work-study programs. Because student loans must be repaid in full, it's important to borrow the least amount possible to cover your expenses while earning your business degree or MBA.

The Department of Education offers four types of loans through its Direct Loan Program.

Direct subsidized loans.

Undergraduate students can borrow up to $5,500 per year in subsidized direct student loans, but the amount they can receive depends on their academic year and whether they're financially independent. The U.S. Department of Education caps the amount of subsidized loan money an undergraduate student can receive in an academic career at $23,000. Graduate students are only eligible for student loans if they are financially independent; their per-year limits are the same as for undergraduates, but their aggregate limit is $65,500, and that includes any undergraduate loans.

Subsidized loans are based on financial need, and only the amount borrowed needs to be repaid. The government pays the interest on the loan so long as you meet certain conditions.

Direct student loans.

Graduate students may borrow up to $20,500 per year in unsubsidized Direct Student Loans through the Stafford Loan Program. Because these loans are unsubsidized, the borrower must pay the interest accrued while attending school. You'll find out how much you can borrow through the Stafford Loan Program after you receive your financial aid package.

Direct PLUS loans.

If you need more than $20,500 a year, you might be eligible for an unsubsidized Direct PLUS loan. There are two types of Direct PLUS loans: Grad Plus loans, which are borrowed by the student; or Parent PLUS loans, which are borrowed by the student's parent(s).

Direct consolidation loans.

Direct consolidation loans let you combine your eligible federal student loans into a single loan with a single loan servicer. Consolidation simplifies loan repayment by giving you a single (and often lower) monthly payment and could open up income-driven repayment plan options. But because consolidated loans often carry longer terms, you'll likely end up making more payments and paying more in the long run.

Banks, credit unions, and other lenders offer private student loans. Unlike federal student loans, private lenders set their own terms and conditions and require a credit check or cosigner. However, interest rates on private loans are usually higher than those funded by the federal government.

Work-study programs.

If you qualify, your federal financial aid package might also include a federal work-study award—a salaried or hourly part-time job that helps pay your expenses. Each participating school has a finite amount of work-study funds—another reason to fill out that FAFSA form early.

One caveat: you can't earn more than your award specifies.

Grants and scholarships.

There are thousands of grants and scholarships offered by state and federal governments, nonprofits, and professional organizations and available to students. Grants are typically awarded based on need, while scholarships are usually merit-based. Grants and scholarships don't need to be repaid—unless you don't follow the eligibility rules.

Below are a few places to find grants and scholarships.

1. Online search tools such as the one from the U.S. Department of Labor, which returns the following sampling of scholarships for business students:

• BusinessStudent.com Business Leaders Scholarship: Two $1,500 merit-based awards for online and on-campus undergraduate, graduate, or doctoral business students each year.

• The Richard Metzler Scholarship: One $5,000 award from the Foundation for Excellence in Management Consulting for business students who excel in consulting.

• The National Academy for Human Resources Scholarship: $5,000 awards for graduate students enrolled in a human resources or HR-related program.

2. Your college's financial aid office. Western Governors University, for example, offers two scholarships for business students:

• The SHRM Leadership Scholarship: Up to $2,000 toward undergraduate or graduate tuition for Society for Human Resource Management national, regional, or chapter leaders.

• The Leaders in Nonprofit Scholarship: $2,000 award with Free for Charity for professionals working in the nonprofit sector.

3. The Department of Education website for state grant agencies.

Employer tuition-match programs.

Many employers offer tuition-assistance or tuition-reimbursement programs to help their employees pay for school and learn valuable skills for the workplace. If you're pursuing a business degree while working, talk to your employer or HR manager about any assistance programs they might offer.

Finding financial aid for business school can be simple. No matter where you attend business school, you'll be able to find the financial help you need.