Updated: April 23, 2025
If you decided to get a Master of Business Administration (MBA) degree to advance your career, you know just how expensive business school can be. According to the Princeton Review, the average cost of tuition can exceed $150,000, so it’s no surprise the average MBA graduate has over $81,000 in debt between their undergraduate and graduate loans. Many top MBA programs’ high tuition costs drive students to borrow over $100,000.
To pay for your advanced degree, you may have taken out Grad PLUS Loans or private graduate school loans, which generally have higher interest rates than other forms of education debt. As of 2025, Grad PLUS Loans have an interest rate of 9.08%. With such a high rate, your balance can quickly grow due to interest charges.
However, earning an MBA can have a significant impact on your salary potential. The National Association of Colleges and Employers projected that the average salary for MBA grads is $77,632, which is higher than the average salary for all Americans.
With a higher-than-average income, you could be a good candidate for student loan refinancing. By refinancing MBA debt, you might secure a lower interest rate and save money over the life of your loans.
Should You Refinance Your MBA Loans?
Refinancing your student loans gives you the chance to modify your repayment conditions to best fit your financial goals. For example, you can reduce your interest rate and adjust your repayment term to save on your total balance. Additionally, you can consolidate multiple loans into one monthly payment.
Here are a few reasons to consider refinancing your MBA loans:
1. You can save money over the course of your loan repayment
By refinancing your student loans, you could qualify for a lower interest rate. With a lower rate, less interest will accrue on your debt, allowing you to save money over the length of your repayment term. Depending on your loan balance and your current interest rate, the savings can be significant.
For example, let’s say you had $100,000 in student loan debt at 9.08% interest and a 10-year repayment term. By the time you paid off your loan, you would have repaid a total of $152,531. Interest charges would cost you nearly $52,531.
If you refinanced your debt and qualified for a 10-year loan at 6.8% interest, you could save thousands. Over the course of your repayment, you’d pay a total of just $138,096. By refinancing your loans, you’d save $14,435.
| Original Loan: | Refinanced Loan: | |
| Loan Balance: | $100,000 | $100,000 |
| Interest Rate: | 9.08% | 6.8% |
| Loan Term: | 10 years | 10 years |
| Minimum Monthly Payment: | $1,271 | $1,151 |
| Total Interest: | $52,531 | $38,096 $138,096 |
| Total Repaid: | $152,531 | $138,096 |
2. You can pay off your business school loans earlier
If you refinance your debt, you could qualify for a lower rate (though it depends on the current rate environment.) A lower rate means more of your monthly payment will go toward your loan’s principal instead of interest charges. If you keep making the same minimum payment you had before you refinanced your loans, you can pay off your student loans faster.
For instance, let’s say you had refinanced the loan mentioned above. After refinancing, you had a 10-year loan at 6.8% interest and a minimum monthly payment of $1,151. But instead of making that monthly payment, you continued paying your old monthly payment — $1,271 per month.
By keeping your old payment, you’d pay off your loan in under nine years — eliminating your debt over a year ahead of schedule — and save over $5,000 in interest charges.
3. You can reduce your monthly MBA loan payments
If you have trouble affording your monthly payments after graduation, student loan refinancing can still be an effective solution. When you refinance, you can opt for a longer loan term, reducing your monthly payments.
But you’ll likely pay more in interest charges with a longer term, so that’s something to consider before you sign your loan paperwork. That said, you’ll have more breathing room in your current budget, making it easier to pay your bills if money is tight. As you progress in your career and earn more money, you can make extra payments to reduce interest charges.
4. You can reinvest in your business or yourself
If refinancing your MBA loans leads to greater monthly savings, you’ll have earned the financial freedom to pursue both your personal and business goals. You may choose to reinvest some of your savings to start your own business or broaden your worldview by taking an international trip.
Have fun with your new savings! While it’s important to spend responsibly, don’t forget to enjoy the flexibility more savings provides. This is the perfect opportunity to cross a few things off your bucket list and achieve more of your goals.
Considerations When Refinancing Business School Loans
Before refinancing your business school loans, however, let’s look at a few situations in which this financial move might not be your best option.
If you have a significant number of federal loans, refinancing will mean losing any deferment or benefits you’re currently receiving. Additionally, if you’re on an Income-Driven Repayment (IDR) plan, you’ll be required to opt for a standard monthly payment if you refinance your MBA loans.
A stable, steady income stream is also important for receiving the best possible refinancing rates. If you’re starting a new business and are funneling most of your income back into business growth, you may have difficulty qualifying for a low rate. That said, there’s no reason not to look into refinancing to explore the types of rates you may be eligible for.
