Getting Started on Financial Aid
Don't make the mistake of thinking that you won't need
financial aid for business school, or that you won't be eligible
for it. A graduate education is a major investment and almost all
students need some form of financial assistance during their
academic careers.
To avoid financial difficulty during business school, you
should work out a sound financial plan from the very beginning.
Financial aid programs fall into three major categories:
How can my GMAT score help me obtain financial
aid?
Business school administrators say that GMAT scores are an
important factor in evaluating the many high-achieving students
who apply for financial aid. Get started learning about your
financial aid options on these pages and find out how an
exceptional GMAT score can increase your chances of earning
financial aid that you don’t need to pay back.
Attend one of our free events to find out more!
Are You Eligible?
Some programs award aid based solely on a student's need,
while others are based solely on merit. However, there are also
some programs based on a combination of both. Under many
scholarship programs, for example, selection of the recipient is
based on merit, but the award amount will depend on need.
Merit-Based Aid
Merit-based financial aid is awarded on the basis of personal
achievements or individual characteristics. It usually comes in
the form of scholarships or grants and it rarely needs to be
repaid. You will learn more about merit-based aid in the Gift Aid
section, where the benefits of a high GMAT score will be
explained in-depth.
Need-Based Aid
Eligibility for need-based financial aid programs is
determined by one of two need-analysis formulas that seek to
measure a family's financial strength and ability to pay for
school expenses:
- Federal Methodology: A need-analysis
procedure developed by Congress used to calculate family
contribution (FC).
- Institutional Methodology: An alternate
method of calculating FC used by individual colleges to
determine eligibility for institutional and non-federal
aid.
Federal Methodology, a formula that is specified by law, takes into account many variables, including expenses over which a family has no discretion, such as taxes, employment expenses, and basic needs. There's also an allowance for your parents' saving for retirement that increases as they get older in recognition that more of their assets should be available to them as they near retirement age.
Once your family's assets and income are totaled, these allowances are subtracted off of the top, leaving an amount over which your family theoretically has discretion. Congress believes that the primary responsibility for paying for education is with the parents and students themselves, to the extent that they are able. That means that at least a portion of their savings and income should go toward paying educational expenses.
Remember that much of need-based aid available to students does need to be paid back at varied interest rates.
