Master the credit gap: How to found your business studies

Recessions can be great for business schools – but those signing up still need to fund the studies themselves

As business schools up and down the land will testify, recession can be great for business. Many people – the newly redundant, the employed-but-insecure, and anxious career-changers – tend to seek the reassurance of a postgraduate qualification to help them gain an edge in a competitive job market, or gainfully pass the time until the economy picks up.

But with training budgets trimmed to the bone, those now signing up for business courses – be it a specialist Masters, an MBA or a couple of units of continuing professional development – can no longer rely on corporate sponsorship and must fund the studies themselves.

This can be daunting, particularly in the current economic and financial climate. After all, a business education doesn't come cheap: a good MBA from a top business school can cost £45,000 while a specialist Masters in finance or management could be in the region of £20,000 to £30,000. Accredited professional development courses can cost £5,000 to £10,000.

Business schools, of course, say this is an investment worth making to ensure your career is well positioned when the economy rebounds.

"It's during a recession that companies really should invest in marketing, and an MBA is about marketing yourself," says Brigitte Nicoulaud, head of the MBA programme at Aston Business School in Birmingham.

Yet raising the capital, and the belief, to finance this self improvement can be difficult, particularly when your job may have a limited lifespan. For home students (those based in the UK and the EU), the most obvious choice is to plunder savings and take on debt: career development loans of between £300 and £8,000 are one option, while MBA students studying at institutions accredited by the Association of MBAs can apply for a NatWest MBA loan.

For international students, it can be more difficult as the global credit crunch has seen a number of lenders withdraw from the market. Many institutions now offer a range of scholarships and bursaries to plug this credit gap, while Chevening Scholarships and British Council grants can help international students study in Britain.

Earlier this year, the Graduate Management Admission Council (Gmac) launched a pilot lending programme to help international students attend business schools. The pilot involves a lending base of at least $500m (£303m) to help students attend 40 business schools in the US and Europe in the 2009/10 academic year.

Taking on large loans during a recession can be stressful, so it's worth investigating other interest-free pots of money or discounts to ease the load. Many institutions now offer discounts for returning alumni: at Manchester Metropolitan University Business School, for example, there's a 10 per cent loyalty discount.

Bursaries are increasingly available for those self-funding their studies: Ashridge Business School has started to offer bursaries of £6,000 for those self-funding their executive MBA, something it never had to offer in the past because the majority of EMBA students were fully-funded by their employers, while Aston Business School has created 35 scholarships of up to £3,000 each for UK and EU students entering its full-time MSc programmes in 2009-10.

Lancaster University Management School offers £1,000 bursaries towards course fees on its MBA in management learning and leadership and £3,000 bursaries towards the fees on its EMBA programme.

In fact, a little homework could pay dividends by unearthing hidden pots of gold. Cass Business School in London has a wide range of scholarships on offer to support students on its specialist Masters programmes. The Cullum/Towergate scholarships, worth £10,000 each, are available for MBA or MSc students focusing on risk and insurance, while the Baltic Exchange awards are worth £6,000 per year for students on the MSc shipping trade and finance programme.

It's also worth doing some thorough research and number-crunching to find out exactly what you can afford to do, both in terms of time (it can be demanding to balance a job, postgraduate study and any kind of family life) and money. Mary Meldrum, head of postgraduate programmes at MMU Business School, says it can be worth signing up for individual units and paying on a pro rata basis – around £300 a unit – in order to get a feel for the scheduling and financial commitment required.

"This can be a very useful way to update skills, with units in project management and employment law being particularly good in the current climate," says Meldrum. "It's a Masters-level unit from a good university. It shows you have the commitment to develop yourself and goes down very favourably with employers."

MMU also allows students to pay by direct debit (a deposit of up to £2,000 depending on the course and three further payments) to lessen the up-front load. In the same city, Manchester Business School is also doing its part for hard-pressed self-funders. It offers a highly flexible learning programme to help those balancing work and study to spread the costs of an MBA over three years. The university's global MBA costs £19,800, which is split into five manageable payments of £3,600, payable once every six months, with a fee of £1,800 once the students start the project stage.

"This payment structure helps self-funded students a great deal as they are then able to effectively combine savings from their monthly pay cheques with any other savings they may have, instead of having to rely on one source," says Nigel Banister, chief executive of Manchester Business School Worldwide.

This is certainly the case for Jo Scott, a project manager for Traffic Wales, who is about to start Manchester Business School's global MBA. "I've used a combination of savings and some money from my mum and dad, and I'm basically then budgeting for it, as the costs are spread out over three years," says Scott, who wanted to maintain the security of her job while studying.

"I discussed it with my husband, and we balanced the costs with the benefits. This was something that I'd wanted to do for five years for personal-development reasons, and I didn't want to look back later and regret not doing it."

Chevening scholarships: funded by the Foreign and Commonwealth Office to help high-flying international graduates study in the UK (www.chevening.com). British Council grants: overseas students should contact their local British Council office for details of grants and information on other sources of funding (www.educationuk.org). Career development loans: a bank loan to help you pay for work-related learning. You don't have to start paying the loan back until one month after you stop training (www.direct.gov.uk). Association of MBAs (Amba): students on programmes accredited by the Association of MBAs may be eligible for a NatWest MBA Loan (www.mbaworld.com).

'I remortgaged my home to do an MBA'

Amy Armstrong did an MBA at Ashridge in Hertfordshire, where she is now director of marketing.

"I remortgaged to do a full-time MBA. I saw it as an investment and haven't looked back since. But it all depends on your attitude to risk. Most people end up with a hybrid of savings, loans and family support.

You need to get your family on board because a certain lifestyle may need to be compromised for a couple of years, but it's an investment in the whole family's future.

You need to be resourceful and creative to think about funding. At Ashridge, you have to do a consulting project as part of the MBA, and this does have fee-earning potential, particularly if what you're doing has strategic value for the client.

I negotiated a fee of £15,000 for my consulting work, which effectively halved my costs.

I couldn't guarantee that income before I started the programme, but it was very helpful. It's certainly something to think about when picking business schools."