There are many options available to students to help fund an MBA education, ranging from part-time jobs to federal and personal loans.
Part-time employment is available to students with financial need through the Federal Work-Study Program, administered by Ohio State’s Office of Financial Aid. Other employment opportunities are posted in Ohio State’s Student Employment Office and our student newspaper, the Lantern.
The majority of MBA students use loans to finance their education, either in total or in part, and many sources of loans exist. Federal loans are available for domestic students only.
Federal Stafford Loan
The Federal Stafford Student Loan program is divided into two types: subsidized and unsubsidized. The Ohio State University is a lender in the Federal Stafford Loan program. The maximum amount a student can borrow in one academic year is $18,500.
A subsidized loan is based on financial need, as determined by federal guidelines. The financial aid office will determine the amount of subsidized loan a student can borrow. The federal government pays interest on the subsidized portion, while the student is in school at least half time and for six months after the student leaves school. The maximum subsidized loan is $8,500.
An unsubsidized portion is not based on financial need. The interest begins to accrue on the loan when the funds are disbursed to the student. The borrower can choose to make regular interest payments while in school, or have the interest capitalized at repayment. The maximum unsubsidized loan amount is $18,500 minus any subsidized amounts. Students who do not qualify for a subsidized loan may still borrow the full $18,500 in an unsubsidized loan.
Federal Perkins Loan
Funds for the Federal Perkins Loan program are provided by the federal government. The Federal Perkins Loan is limited to full-time second year students only. The financial aid office will determine the amount of Federal Perkins Loan a student can borrow, up to $6,000 in one year. The loan is based on financial need and is designated for exceptionally needy students. The interest rate is 5 percent during the life of the loan. No interest accrues on the loan while the student is enrolled in school.
Direct PLUS Loan
Federal Direct Graduate PLUS Loan is a federal loan available to graduate and professional students based on educational costs. This loan, in combination with other aid, cannot exceed educational costs as determined by Ohio State.
MBA students interested in applying must be U.S. citizens or eligible non-citizens, meet all other requirements listed as Student Rights and Responsibilities, and pass a required credit check. They must also have applied for their annual maximum eligibility under the Federal Direct Subsidized and Unsubsidized Loan Program.
Alternative loans are NOT federal loans; they are credit-based loans funded by various lenders. These funds are often used to supplement the Federal Stafford loan program.
The maximum amount that can be borrowed in an academic year is the student’s cost of attendance minus all other financial aid (including any Stafford loan, scholarships, tuition benefits, or veteran’s benefits). Interest rates vary, are adjusted quarterly, and are generally based on Prime or the U.S. 91-Day T-Bill plus points; rates are higher than the federal loan program.
Interest accrues on these loans from the first date of disbursement. Interest can be capitalized or paid quarterly. Repayment of principle and interest begins six months after leaving school. Also, various insurance and repayment fees may be charged, depending on the lender. Students with adverse credit standing will be required to have a co-signer. There is no penalty for prepayment. The repayment period can be up to 20 years.
The Global Student Loan Corporation
The Global Student Loan Corporation is a lending institution for international and distance learning students that does not require a co-signer in the host country.
All students can apply for the private, credit-based alternative loan. Most banks are happy to consider lending to finance education based on their individual lending policies. You should contact your banking institution to inquire about the possibilities of obtaining a bank loan.