How to fund your MBA Abroad
One of the most influential factors when you are deliberating the right MBA program for you is the cost of the program. We tend to observe that most of the students, who opt out of an foreign MBA program, tend to do so because of the expenditure involved. So, if you want to go for an MBA overseas and is worried about the costs and the way to pay it, Don’t worry we demystify some myths for you.
The actual cost of the MBA program
From my observation, whenever I have raised the issue of an MBA from an overseas university (Specifically the USA) I have been dismissed by everybody with a singular reason, it is too expensive. Given the current economic scenario and the worsening rupee, even a reasonable sum by the western standards is too expensive for applicants in India.
Let us put it in perspective by comparing the tuition rates of Harvard Business School and the per capita income of the applicant’s country.
What are the costs that we are talking about?
Here is a sample of the costs of an MBA programme from some of the best universities, just to apprise you of the costs that you might have to incur.
The USA, which is the market leader in education today, has two distinct sets of b-schools. There are the private ones and the others are the public b-schools. Public b-schools are those that are funded for and maintained by the government, while private b-schools are self-funded.
As a result, the fees charged by private b-schools tend to be substantially higher than the public b-schools, and so are the living expenses. Here are some the best private b-schools and their public counterparts.
Best Private B-schools around the world
Here is the cost incurred in some top public b-schools in the USA
How can you afford this MBA?
As you can see, the costs to be incurred here are substantial, and there needs to be a firm plan in place for funding of the same. Here we suggest three options
F-F-F (This can have two connotations)
1. Friends, Family and Father-in-law
2. Fully Funded by the Father-In-Law 🙂
2. Personal Fund
3. Bank Loans
4. Scholarships and Fellowships
If you fall in the first two categories, for all we know, you might not even be reading this post. But for categories no 3 and 4, will find this piece of information really useful.
I will tell you right at the beginning that, if you want to study abroad, depending on an Indian Bank is not recommended. Reasons for it are
•The maximum allowed loan amounts for most of the banks are capped at Rs 20 Lakhs, which going by the above tables will barely suffice to cover your living expenditure, let alone your costs.
•Collateral free loans are not available. The maximum loan sanctioned by any bank, without a collateral is Rs 7.5 Lakhs
•If you get a job abroad, repayment is a big hassle and will involve transactions in foreign currencies.
Funding is not a problem as, most of the top b-schools have lines of credits or partnerships with leading financial institutions. These sanction unsigned loans, which will cover your tuition fees and living expenditure in its entirety. You will be sanctioned the loan, as soon as your admit is finalized and before you go for your visa to ensure you do not have hassles on the financial front.
Scholarships, Fellowships and Loan-Forgiveness programs
All the universities, worth its name have a scholarship program. As one Wharton student put it, all the schools do charge high fees but they ensure that no student misses out on education on account of insufficient funds. There are also some external agencies who do fund deserving and meritorious students.
Amongst the Universities, Wharton has started the Loan-forgiveness program, where they pay students who choose to work in non-profit sectors upto $20,000 a year to repay their loans.
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