Congratulations! Now please hand over $100,000 and your first-born.
I have heard from my second and third business school. I got in! Now that business school is really going to happen, I am also figuring out what it means to be a full-time student again. The MBA programs I applied to cost around $150,000-$160,000 for two years: ~$50,000/year for tuition, books, and supplies, and an allowance of ~$25,000-$30,000/year for living expenses. No one ever said graduate school was cheap.
How do I plan to pay for this educational elephant? Fortunately, I’ve been able to save up and I am able to count on some family help. $50,000 comes from my personal savings from post-college work, $40,000 comes from inheritance from my grandmother, and my parents will probably help me out with another $10,000. So that’s $100,000 of tuition. The other $50,000 in living expenses will likely come from a combination of loans and freelance earnings during business school.
School #1 did not offer me any scholarship, so if I go there it will be for the full sticker price. In that case, I will probably have to take out $40,000-$50,000 in loans. They might be loans from the Bank of Mom & Dad with a Dear Daughter Discount, but it’s debt nonetheless. $40,000-$50,000 of repayment will require pre-tax earnings of $60,000-$70,000 to service, which is no small sum. This is a great institution and I feel very lucky to be accepted, but it will be a struggle to pass up the money offered by.. School #2.
School #2 is offering me a not-insignificant-amount of aid. Thanks to a scholarship, the tuition drops down to $27,000/year, and the total cost of attending business school falls to $105,000. If I choose this school, I have a very good chance of graduating debt free if I live frugally and make some side income during school. I don’t even have to fill out a FAFSA! What a coup that would be… if I can graduate from a great MBA program and still have ALL of my income be mine afterwards. Well, mine and Uncle Sam’s. This school’s reputation may be a little bit more regional than the other schools I have applied to, but I believe that all busines schools, with the exception of Harvard and Stanford, are regional in some ways. Bottom line, this school is a solid choice, with a strong alumni network, very down-to-earth people, and a robust recruiting pipeline for the industries I am considering.
School #3 is an Ivy (though the mere fact that it is an Ivy shouldn’t make my parents any more glad about the acceptance, it will. And I am happy because they are happy), and will tell me whether I get any scholarships in a week or two. School #4 will inform me of their acceptance decision in about a month.
CB has also applied to graduate school. He will hear back within the next month. If he gets in, he will have to take out some loans (which will then turn into our loans. Ah the joys of marriage). If he doesn’t get in, he will keep working and support me financially for a year so I can take out fewer loans (ah the joys of marriage) and reapply next year. I think he has a pretty good shot at acceptance, so I am planning as if we will BOTH be in graduate school, BOTH not making much money, BOTH taking out student loans. In that context, I am forced to think about my student loan situation much more carefully than I might otherwise.
How my attitude toward student debt evolved
Even a few years ago, I had resigned myself to taking on $80,000+ in student loans. It’s what almost everyone does and most graduates of top schools can find a job that will service that debt. According to the MBA website Poets & Quants, the average MBA debt load is north of well north of $70,000 (incidentally, all of my schools are on that list… not sure if that’s a good or bad thing).
But the more I thought about it and the more I calculated, the more I realized that I don’t want to graduate with a mountain of debt. Student loan debt doesn’t have to be a fact of life for me. Even if I do take on loans, I want to err on the side of conservatism. I’d like to be able to pay off my graduate loans in 3 years after school. My limit is $50,000 in loans for an MBA. Assuming a family loan interest of 5%, it’d take me $1,500 a month to be able to pay off the loan in 3 years. A big chunk of money, to be sure, but not impossible. If I can keep the loans down to, say, $25,000, I’d be able to pay it off in a little more than a year.
I truly love all of the schools I applied to, having made a decision very early on that I would not submit my application to a school unless I know I will be happy and excited to attend. So I have three great choices right now (hopefully, I will have four great choices once I hear back from School #4). Money is definitely a factor, but how big of a factor? I don’t know.
Related posts:
Wow, that’s expensive. I’d jump all over the one that offers aid, haha. But then, your income will probably increase when you finish so it will pay for itself
Daisy´s last [type] ..February Goals: How I Did
Daisy´s last [type] ..February Goals: How I Did
Congrats on getting accepted! I went to NYU for undergrad and left with 90k worth of debt, so I know the pain of student loans. I definitely don't regret my decision to spend a lot of money on school, even though I'm still paying for them 7 years later (though I should be done this year!). If it's a school you love and something that's going to further your career and make your life better, I think it's a worthy investment. Good luck with making a choice!
Congrats! I was hoping you would do another grad school post.
Congrats on being accepted to the schools – I think that i'd go for one of the ones that gave you more aid, but then again, there are things that play a larger factor than money, like how much you like the town/city the school is in, what you're looking to do when you graduate, and more. I had an easy choice when I went to grad school, I only got into 1 place.
Thanks for this post! I love looking at all these kinds of details. What kind of degree program is your fiance applying to?
I hope this doesn't come off the wrong way, but… Why are you expecting to spend 25-30k$ on living expenses? Are your schools all in the most expensive cities in the country, do you not want to drop your standard of living too far…? If that's not the case I think you can spend less and reduce your loan load a bit. Unless the business school lifestyle itself is more expensive than for other graduate programs (travel for networking?)?
GREAT question. In fact, the schools I've applied to all have lower cost of living than where I live now. But I made those living expenses higher for the following reasons: 1. CB and I will be living apart, like… you have to get on the plane apart. So I want to budget in travel expenses for me to visit my husband!, 2. as you guessed, there is a lot of networking, conferences, and interviews in bschool. And all that takes money to get to. I do plan on living with a roommate and not having a car, so hopefully those things will save me quite a bit.
Adding on to that, you have to consider other things – MBAs have prior work experience, and are getting hired in at a higher level than students of other graduate programs. Wardrobe matters a lot more. Grooming matters a lot more. Your peers are also your network so you need to be on point regularly re: style, more frequent haircuts, better tailoring and daily makeup.
Beyond that, the "living expenses" also has to cover health insurance, doctors' appointments (student health plans are crap).
congrats on all the acceptances, that's such great news! two things: 1) can you pit the schools against each other, i.e. politely letting the the school that didn't offer you a scholarship know of your scholarship offer from the other school, and ask if they are able to provide some sort of scholarship or guaranteed TA ship to you? Schools want sought-after students like yourself to attend their school, it makes them look better, so maybe it's worth a shot? 2) I agree that student loans don't have to be a fact of life. But if you're fairly certain that you'll need the degree for the kind of work that you'll do, and if prestige matters a significant amount for MBA schools, then I'd say a bit more debt is worth it. Be careful though, with what schools tell you and do your own research. I'm sure an ivy school loves to tell you how they're "worth" the higher tuition, but it may not always matter a signficant amount in terms of your job placement prospects.
Thanks for your comment on my blog! I always love what you're writing.
I share your opinion of student loans. You should do everything you can to stay away from them. If you choose school #2, apply for FAFSA anyways! Any money that is paid to the school over the tuition rate gets refunded back into your pocket. Some scholarships have caveats for this, so check yours out first. But as a general rule…
Oh grad school. I struggled with the idea of going (granted I am not getting an MBA), but in the end I'm really glad I did. I didn't have to relocate, and since my program is through a school designed for working professionals, I'm actually able to pay all of my tuition while working full time (plus my husband also works), so I luckily will not graduate with any student loans, which I am really excited about.
P.S. Congrats on being accepted to so many programs!
You are awesome. I wish I had that much saved up for law school.. it's about the same price for 3 or 4 years. I'm hoping for some need-based aid and I will be working full-time to pay off as much as I can too. My parents will also be helping me. Great post!
Good on you for having as much saved as you do. I'm having to weigh some similar issues right now as far as grad school goes (though I only applied to, and got into, one school), but a good portion of what I decide will likely come down to financial aid.
Congratulations on the acceptances! It's so difficult to make any decisions until you've heard back from all of the schools. It'll be interesting to see which one you pick!
Congratulation! How exiting! It will be a big change to go back to school again. Can you take on some TA position or anything like that? I did that for my Masters and it helped quite a bit. I'm sure you will do great in the any of those program.
I'm not sure about TA positions.. but if they are available I will definitely try.
Congrats! There are definitely trade-offs with prestige and cost. Think hard about them. Some things to consider are fit with your future plans (do they specialize in things you're interested in) and outcomes of recent graduates (*especially* unemployment rates– some schools only show average salaries conditional on employment), including where in the country you would like to settle and if the reputation of the school exists in that part of the country.
Congratulations on having so many options. So much better than having no options! While in general it's better to have less debt than more debt, my experience with friends who have gone through MBA programs is that a big chunk of the benefit of an MBA stems from the network it gives you. Even if you don't learn more at HBS than you do elsewhere, the network is more valuable. So keep that in mind in your calculations. In a tight economy, the winner-take-all effect is even more pronounced, so companies that normally recruit at lots of biz schools will only recruit at the ones they perceive as the best. You can also make massive progress on your loans if you land a 6-figure salary but live for the first two years out like you're still a student.
I'd pretty much need to live like a student once I graduate – I'll be supporting CB for his last year of grad school AND paying off my loans.
Great post! I'm looking into an MBA myself, although it's quite a bit cheaper in Canada. With that being said, some of the programs are upwards of $70,000, which is no small chunk of change. I'm writing the GMAT in three weeks, so we'll see what happens at that point.
I love your ambitious goal-setting – I'm hoping to do the same thing in my repayment plan.
Best of luck!
Wow, so many options and a scholarship! When I chose a law school, I only looked at two things – ranking and cost. I applaud your drive to avoid student loans since you've said you'd like to have children, and it will open up more job opportunities – you won't be forced to take on certain high-paying but soul crushing jobs simply to afford student loans. I have friends who did that and are purely miserable (and purely miserable to be around!). Can't wait to hear about the other 2 schools!
Congratulations on all the great options!
Excellent post! Congrats on being accepted into multiple schools and getting offered scholarships.
I left graduate school with $79,000 total in student loans. (All told, that was for a BA, BS, MS, and PhD). I went to the top U.S. school in my field for my doctorate, and I don't regret it. I've found that the name of the school and my connections with the faculty carried a lot of weight.
Something that I found helpful: Figure out your dream job, who is in that kind of job now, and what they did to get there. (Bonus if their career trajectory is clear through their company website or LinkedIn!) Sometimes, having an internship, presenting at conferences, winning awards, or seeking out specific opportunities in grad school can make all of the difference in your later career.
Congratulations on the acceptances. We'll be waiting now to hear the outcome for CB, I assume he applied to the same schools as you? We'll also be waiting with great anticipation to hear where you are going…assuming you share that info.
Nope, different program, different school, different state, same time zone, though!
Do you have a plan for what you'd like to do after graduation and where you'd like to live? Those questions for me drove where I went to school. Some careers require that you have a bigger name-brand behind you, while others are actually better suited to more local schools that have alumni built up within them. I'm sure you've considered it given all the other goodies you've shared here, but I didn't see you mention it, so I thought I'd ask.
Congratulations!! That's awesome that you got into such good schools and I can't wait to hear your decision. Your debt will definitely be manageable with a standard post-MBA salary and 3 years is not too bad at all. Are you planning on switching industries or staying in the same industry you are in now?
That's so exciting! Congrats on all the acceptances. Sounds like #3 would be great if they give you scholarships, otherwise #2 is a pretty strong contender. i agree with some of the other comments though – if you know where you'd like to live/work after, that should be considered when deciding on a school. Many companies will recruit at schools near them so try to place yourself there – if you don't care, then a great school with the least financial burden would be my choice! Good luck!
congrats! or… more likely, congrats*! where the * says, "good luck with those loans for decades" …
first and foremost – Congratulations! When I got in into the graduate school, I was lucky to have a full time job. Also, my school was not even close in tuition fees like yours. What I did was – I set myself a budget and said that I will not go over certain amount in student loans. It was really tough but now I am sooo happy that I did it. I am still paying those loans down. My interest is 0.22%, so I don't worry too much about them. Oh, and do take a student loan interest deduction.
Congratulations on getting in! MBAs are a really though call. Some people say "go to the best school you get into for MBAs and Law School" because those are the schools that will place you in the six-figure gigs (assuming you want to work around the clock). I'm somewhere in between. I have about 80,000 in grad school and undergrad student loans and a great job. Others who graduated with me have double the loans and half the salary and are struggling. It's definitely risk/reward. Good luck!
yay for getting into graduate school but even more so , i'm so happy that you're being so smart about the financially savvy choice for graduate school.
These seem like crazy sums so I hope they really boost your earning potential to justify it (I think they do — MBA's are generally high-earning degrees)
I might consider doing an MBA part-time in the future, but we'll see. Right now I can't stomach paying tuition again lol
The Idea was that higher education is the great equalizer as far as socioeconomics go but in many cases today it has become the great unequalizer.. We have now created a class structure based on these varying degrees' high school' associate' bachelors' masters' or doctorate. Now we have a situation where because of the inflation in higher education costs the likelihood of someone at the middle of the totem pole as far as family income goes has less ability to qualify for and meet the financial qualifications of higher education unless their willing to go deeply into debt or unless their very bright which would mean they could qualify for a scholarship' what about everybody else. What if the standard for getting that better job becomes not the bachelors but the masters degree this will only increase the inequality even more leaving only the rich and affluent to take advanage of higher education and qualify for all the better jobs.