How to Pay off Business School - Student Loan Forgiveness Guide


Navigating the loan repayment process for business school can seem overwhelming. However, with some knowledge and understanding of available resources, creating a tailored plan that caters to individual financial situations is possible. MBA graduates can use their financial acumen to repay loans quickly and efficiently.

On average, MBA students take on substantial debt when enrolling in business school. For example, the average debt for master’s degree holders was $80,494 in 2022, according to the Education Data Initiative. This figure highlights the importance of implementing a comprehensive loan repayment plan that enables students to make consistent payments and manage their debts effectively.

This guide provides tips on finding the best MBA loan options, paying off loans promptly, managing debt in school and after graduation, and more.

What Are Loan Forgiveness & Repayment Programs?

Loan forgiveness and repayment programs, sponsored by the office of Federal Student Aid (FSA) and other organizations, are a critical resource for college graduates who feel the burden of loan payments.

Loan forgiveness plans require a commitment to public service for a specific number of years. The Public Service Loan Forgiveness (PSLF) Program is an example of a federal loan forgiveness plan.

Loan repayment plans come in different forms, including Income-Driven Repayment (IDR) plans that can be forgiven over time.

As college loan debt has steadily become more of an issue among graduating students nationwide, loan forgiveness and repayment programs provide crucial opportunities for reducing loan burdens and ensuring financial security after graduation.

Who Qualifies for Loan Forgiveness & Repayment Programs?

Loan forgiveness and repayment programs can offer relief to borrowers who may be struggling to make ends meet, but who qualifies for such benefits? Eligibility factors vary, but here are some general requirements for loan forgiveness and repayment programs:

  • U.S. citizen or legal permanent resident with a valid Social Security number
  • Previous history of borrowing from the office of Federal Student Aid (FSA)
  • Completed at least 120 qualifying payments over ten years (for the PSLF Program)
  • Employed full-time in an eligible industry
  • No back taxes owed
  • No default on previous loans

Eligible individuals who qualify for loan forgiveness should look into their options further and take advantage of the best loan forgiveness and repayment programs.

Benefits of Loan Forgiveness & Repayment Programs

Deciding to pay off student debt can be overwhelming and daunting. However, loan forgiveness and repayment plans provide numerous benefits for borrowers attempting to manage their student loan debt, including the following:

  • Lower monthly payments
  • Reduced loan balances
  • Loan forgiveness (when specific qualifications are met)
  • Building good credit scores
  • Getting complete control over debts

Embracing these solutions will result in more financial freedom as high-interest payments are eliminated, and money is freed for other goals, such as retirement savings or investing in the future. Therefore, loan forgiveness and repayment plans offer a viable solution to those looking to benefit from the advantages of paying off student debt without taking on additional stress or worry.

Examples of Business School Loan Forgiveness & Repayment Programs

From loan forgiveness to income-driven repayment plans, options are available to help borrowers manage their student loans and find relief. Here are some student loan forgiveness and repayment plan options at the federal and corporate levels.

Consolidate Loans

Borrowers with multiple federal loans with different interest rates and payment plans can consider consolidating all loans into one single loan with a fixed interest rate. This will not only simplify repayment but may also lower monthly payments or the total amount due. The office of Federal Student Aid (FSA) offers loan consolidation options.

Direct Loans

Direct Loans are offered by the office of Federal Student Aid that allows borrowers to combine multiple federal student loans into one loan with a single monthly payment. This loan also offers flexible repayment options, including income-driven repayment plans, allowing borrowers to better manage their monthly payments based on their financial situation.

There are four types of direct loans, three of which apply to MBA students:

  • Direct Unsubsidized Loans: These loans do not require financial need, and the borrower is responsible for all interest accrued.
  • Direct PLUS Loans: These loans are available to graduate students and parents of dependent undergraduate students who have passed a credit check and have slightly higher interest rates than other Direct Loans.
  • Direct Consolidation Loans: These loans allow borrowers to combine multiple federal student loans into one loan with a single monthly payment. This loan also offers flexible repayment options, including income-driven repayment plans.

Employee Loan Repayment Benefits

Employee loan repayment benefits are a type of employee benefit offered by employers that allow employees to receive financial assistance with their student loan debt.

This type of benefit may be a lump sum payment, regular payments towards an employee’s student loan balance, or employer contributions to an employee’s student loan repayment program, such as the Public Service Loan Forgiveness program (see below). For example, Google offers a student loan repayment benefit of up to $2,500 per year with no lifetime maximum.

Income-Driven Repayment (IDR) Plans

Income-Driven Repayment (IDR) Plans are federal student loan repayment plans that base the borrower’s monthly loan payment amount on their income and family size. These plans allow borrowers to make lower monthly payments, extend the repayment term length, and qualify for loan forgiveness after completing a certain number of payments.

There are four types of IDR plans:

  • Income-Based Repayment Plan (IBR): Monthly payments are 10 percent (new borrowers) or 15 percent of your discretionary income.
  • Pay As You Earn (PAYE) Plan: Monthly payments are 10 percent of discretionary income, never exceeding the 10-year standard repayment amount.
  • Revised Pay As You Earn (REPAY-E) Plan: Monthly payments are 10 percent of discretionary income.
  • Income Contingent Repayment Plan (ICRP): Monthly payments are 20 percent of your discretionary income or what you would pay for 12 years on an adjusted income.

Public Service Loan Forgiveness (PSLF) Program

The Public Service Loan Forgiveness (PSLF) Program is a federal program that provides loan forgiveness to borrowers who work full-time in public service jobs. The program forgives up to 100 percent of an eligible borrower’s remaining student loan balance after making 120 qualifying monthly payments on their loans. This program includes federal Direct Loans.

Other eligibility requirements include being employed full-time by a government organization or nonprofit 501(c)(3) and having no delinquency or default on payments.

Refinance Loans

Consider refinancing student loans for a lower interest rate and longer repayment terms. This can make it easier to manage debt while saving money on interest. Most banks offer student loan refinancing options.

Sallie Mae MBA Loan

The Sallie Mae MBA Loan is a loan designed for MBA students to help pay for their educational expenses. The loan offers competitive rates, repayment plans, and flexible eligibility requirements, making it an attractive option for those considering an MBA program.

Utilize Tax Benefits

There are several tax benefits available to those with student loan debt. Some ways to take advantage of these benefits include changing your filing status, deducting interest payments from federal income taxes, and researching state-specific tax credits for students and loan borrowers who make timely payments.

Other Options to Pay for Business School

A few options are available to help pay for an MBA program without going into debt. Here are other options to pay for business school tuition and related expenses.

Employee Tuition Reimbursement

Some employers offer employee tuition reimbursement that helps employees offset the cost of education. In addition, employees can receive reimbursements for tuition, books, and other related expenses when they take classes related to their current job or future job opportunities.

Many large and small companies offer tuition assistance programs as part of their benefits packages. Some examples include Microsoft, Disney, IBM, Adobe, Home Depot, Walgreens, and Lowe’s. In addition, many technology startups are also offering tuition assistance to attract and retain top talent.


Many organizations offer grants to help MBA students cover the cost of business school. Grants are awarded by professional associations, private foundations, and donors and can be merit-based or need-based. Like scholarships, grants typically qualify as gifts and do not need to be repaid.

Military Benefits

The Post-9/11 GI Bill provides educational assistance to eligible veterans, service members, and their dependents. As part of this program, veterans may use their benefits to help cover tuition and other costs associated with an MBA program at a public institution.

Alternatively, the Yellow Ribbon Program helps veterans pay for out-of-state and private school tuition that the GI Bill does not cover. For example, the Kellogg School of Management at Northwestern University is a designated Yellow Ribbon Program, meaning the school pays part of a student’s tuition. In contrast, the US Department of Veteran Affairs pays the remaining portion.


For those with the financial means, it is possible to use a portion of personal savings to fund MBA tuition fees without taking out a loan. This option can help graduates avoid the potential burden of student loan debt. In addition, aspiring MBA students can use high-interest savings accounts to optimize their earnings while saving for business school.


Offered by schools, professional organizations, regions, and some are for specific populations such as racial and ethnic minorities, women, first-generation college students, individuals who identify as LGBTQIA+, individuals with cognitive and physical disabilities, and many more. In addition, please see the BSchools Guide to MBA Scholarships.

MBA students have a variety of scholarship options available to them. Sallie Mae offers a graduate school scholarship finder. Other popular scholarship websites include and

Rachel Drummond
Rachel Drummond

Rachel is a freelance writer, educator, and yogini from Oregon. She’s taught English to international university students in the United States and Japan for more than a decade and has a master’s degree in education from the University of Oregon. A dedicated Ashtanga yoga practitioner, Rachel is interested in exploring the nuanced philosophical aspects of contemplative physical practices and how they apply in daily life. She writes about this topic among others on her blog (Instagram: @oregon_yogini).

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