How to Smartly Fund a US MBA
The sheen of American MBA has attracted the students worldwide for several decades. These premiere programs, generally boasting a legacy of over a hundred years, confer an enviable amalgamation of academic rigor, collaborative team projects, live simulations, experiential learning, interactive case studies, multicultural exposure, vibrant campus life, robust global network, profound intellectual capital, strong brand value, erudite faculty, seasoned career services, versatile extra-curricular activities, brilliant networking opportunities, and access to a spectrum of potential recruiters. The once in a lifetime experience has its weight in gold but, rightly so, cost in hefty dollars; the huge sums of expected expenses discourage a big chunk of international students to give up on their plans for American MBAs. The situation is quite sorry because most students give up their dreams without fully exploring the possible ways of funding a US MBA. Here is a sincere attempt to inform the prospective candidates about various smart ways to fund a US MBA.
Up to 100% scholarships on tuition are available for MBA Programs. Personally, coming from a humble background and wanting to return to India to pursue my entrepreneurial plans, I could not have even thought of an American MBA if it were not for scholarships. A premiere American B school was very kind to offer me 100% scholarship and I, as a matter of personal choice, accepted to pursue a global MBA over the IIMs and ISB. Most MBA scholarships are merit-based and the very factors that decide one’s admission- work experience, academic record including the GMAT score, and co-curricular activities- decide the possibility and extent of scholarships. It is important to understand that not all schools are scholarship friendly and thus, a candidate must conduct adequate research upon the scholarship opportunities while short-listing the schools. Further, a candidate must research well and speak to the current students and recent alumni from the prospective schools about the competitiveness of profile and GMAT score of students who win scholarships; one must conduct thorough introspection and contemplation in finalizing the portfolio of schools. A few of the scholarship friendly prominent American Business Schools include- Goizueta, Olin, Carey, Boston University, Owen, Jones, Smeal, Kelley, Fisher, Smith, Broad, UIUC, Irvine, Krannert, Foster, and Tippie.
Collateral Free Loans
Most of the US top 20 B schools have the option of collateral free loans; this means that the schools have tie-ups with certain American financial institutions that give loans to admitted students, without any collateral or co-signer. Such loans cover the tuition as well as living expenses and come at very attractive rates- generally around 5%. For students wanting to work in the States for a few years after graduating, collateral free loans are wonderful options. Assuming a total expense of $100,000 in one’s education and the average starting salary of $130,000 (as is the case in the top 20 American MBA programs), one can comfortably pay back the loan in a few years. The learning, exposure, network, and brand of the premiere school shall remain for a lifetime! Very few schools have the option of collateral free loans and all such programs are extremely competitive- think, the financial institutions are trusting that the alumni will definitely have great job offers and will be able to pay the loans back. Hence, the prospective candidates, while short-listing schools, must research well over the availability of such loans and their chances of admission in such, premiere schools. A few American B schools with the option of collateral free loans include- Harvard, Wharton, Booth, Stanford, Sloan, Haas, Tuck Stern, Duke, Yale, and Cornell.
A US Based Co-signer
The citizens of USA or Green Card holders with robust credit history can sign education loans for international students. Hence, in case some of your relatives are in such positions and are willing to vouch for you, the options of cheap (~5%), convenient loan is easy for you. The Co-signed loans are very common and almost all of the US top 75 MBA programs have this option.
While most US programs are quite expensive, there are a few economical options as well. With due deliberation and planning, one can attend a prominent yet economical program. Remember, it is not that the economical programs are low ranked and the costly ones are ranked high; the cost of the program depends on various factors- whether it has state funding, location, batch size etc. Many programs costing more may be relatively low in prestige and vice versa. For example, BYU Marriott, a school consistently ranked among the top 35, is very economical as the total expense for an international student is around $65,000; similarly, the UMass MBA, a decent option, costs as less as $40,000 despite the upbeat location in Massachusetts. The aspiring candidates are advised to use resources such as the US News Rakings for obtaining complete idea of the fee structure, employability, average starting salaries etc.
Loans from Indian Banks
A sum of up to INR 7.5 Lacs is available without any collateral and a sum of up to INR 30 Lacs is available on mortgages by certain public sector banks. Private financial institutions such as Credila provide loans for even higher amounts on commensurate mortgages. The option of loans from Indian banks is not my personal favourite as the interest rates are high and the paper work is cumbersome- often leading to a non approval despite serious investment of time and efforts. My recommendation is that this option be used only in case a student needs only a small sum.
Earn while you Work
International students, especially Indians, are the hardworking lot, willing to earn their ways as they learn. Thankfully, the ecosystem of American Universities and the program structure allow substantial leeway to earn. An international student is allowed to work for a maximum of 20 hours per week on campus; various Graduate Assistantship, Teaching Assistantship, and Campus jobs are available. Further, most MBA programs involve an internship period of around three months during which a candidate can earn as decently as $6,000 per month. Generally, the norm is that the Indian students earn almost all of their living expenses and it’s largely the tuition fee that one needs to arrange.
Overall, I wish to reinstate that there are multiple ways to fund a US MBA; the aspiring candidates must put their efforts on what is in their control- the GMAT, profile, and applications. For money- one, other, or a few together of the ways suggested above shall come to rescue. Personally, I completed my MBA, boosted my entrepreneurial venture alongside, and saved enough during those two years to return to India and start my first corporate office; all without giving any financial trouble to the elders in my family. I always tell my students, if I could fund a US MBA, anybody can!
Guest Author :
Mr. Mayank V. Srivastava is the founder of ExpertsGlobal.com – an online training service institute that mentor and guide students to achieve higher education abroad and helping them getting admission in their dream university.