February 23, 2008 9:35 PM PST
Sunday, February 24, 2008
Monday, February 11, 2008
How to Pay for an MBA
Business school is a costly investment. Here are some tips on how to make it more manageable
by Francesca Di Meglio
Aponte is certain that enrolling in graduate business school was a "sound financial decision," even though she will be paying off loans after graduation in 2009. Like anyone making such a big investment, Aponte was apprehensive, but she consider that a positive. "It's a good thing to be concerned about finances," she says. "Don't shy away from being nervous." It shows that personal finance—and your financial security—is important to you.
So embrace your anxiety. If you're an aspiring MBA losing sleep over how you are going to afford graduate business school, then you should check out the financial aid tips below:
Ask for Help
Even before you apply, you can get information about the financial aid services available at each school that interests you. Some of them have financial aid offices specific to the graduate business school; others require business students to work with the main university financial aid office along with everyone else. All of them have professionals available to answer your questions and explain the complex world of financial aid. Take advantage of this resource.
Susan Brooks, the financial aid assistant director at Kenan-Flagler, suggests keeping financial aid folders for each of the schools to which you applied—and reading all the material they send you. Do additional research on your own on available scholarships, grants, and federal vs. private loans. Understanding your options, what each school is offering, and educating yourself about student loans in general is key to getting the best deal possible. "Approach it as you would any business decision," says Aponte. "Get as much information as you can as fast as you can."
Get Your Financial House in Order
Take your cues from Aponte and start cutting costs from your current budget as soon as you decide you want to go back to school. Bring a brown bag lunch, nix your Starbucks habit, or quit hanging around the mall on sale day—whatever you can do to keep a few extra dollars in your savings. This will help prepare you for being without a salary for two years. In addition, you'll ideally want some sort of savings for emergencies and a sense of security while you're in business school. Get your credit score from a service such as myfico.com and start paying off other debts, especially bad debt like credit cards. Your lenders will use your credit score to judge your application, so you'll want to be in good standing.
Determine how much you'll need
Consider the cost of the schools to which you have been accepted. If you applied to a state school where you are a resident the tuition will likely be lower and you might think that's reason enough to attend the program. But before making any decisions, you should figure out how much you'll actually need to live and pay for each of the programs. Tuition alone is not enough. You must also consider the cost of living in that state and unexpected expenses for things such as traveling for the job search, purchasing business attire, and attending networking events. Compare the totals you come up with for each program to your current budget to see if you can swing it.
Borrow Intelligently
Once you know how much you need, you can start looking for the money. Free money, the kind you will not have to pay back, should be on the top of your list. This includes scholarships and grants. Talk to the financial aid services staff at your school to determine what, if any, scholarships and grants are available. But keep in mind that it is more difficult for graduate business students to get such offers. "People don't have as much sympathy for MBAs," says Dan Thibeault, co-founder of Graduate Leverage, student loan consolidation and debt management company, in Boston (BusinessWeek.com, 1/27/05).
Most experts suggest that you look to exhaust federal loans, with fixed interest rates, after you have collected all the free money you can and before you turn to private lenders. Graduate business students can take out up to $8,500 in subsidized Stafford loans, which are based on need, do not accrue interest on the loan while your are in school, and come with a fixed interest rate, currently 6.8%. An unsubsidized Stafford loan is the same loan, but interest accrues while you're in school. Since 2006, graduate business students have also been able to consider the Graduate PLUS Loan, which comes with a limit of $20,500. In the past, says Paul S. Garrard, vice-president for student financial services for Sallie Mae (SLM) graduate and professional programs, grad students typically used private loans after they had exhausted the Stafford loans and scholarships. Now they can continue to turn to the government with the PLUS loan.
Not all the experts agree that this is the way to go. Thibeault says students should take advantage of the sudden and dramatic drop in interest rates because they could find a better deal with private lenders than with the government. About 65% to 70% of MBAs can get private loans at a lower rate, he adds. Garrard argues that these private loans have variable interest rates with no caps, which means you could have a great rate when you apply for the loan, but it could skyrocket while you're in school or when you're ready to pay. Whatever you do, at least apply for the federal loans. All U.S. citizens are eligible for Stafford loans, and you might choose to use them simply to keep from tying up your assets, say experts.
Students with a bent for nonprofit work might qualify for loan forgiveness. The College Cost Reduction and Access Act of 2007 has the government completely forgiving your federal loan balance if you go into the nonprofit sector or government after graduation and stay there for at least 10 years, says Thibeault. Only federal loans apply, and after graduation you'll have to consolidate into one direct loan program, he adds.
Live Like a Student
The rise of private loans, says Rob Rex, managing director of OTO Networks, which runs the Student Finance Domain in Baltimore, tempts students to live above their means while they're in school. Business students are especially vulnerable because many of them had good salaries before the MBA program and had become accustomed to a certain lifestyle.
Your best bet, however, is to return to living like a student. Get a roommate if you can stand it, refrain from big purchases, and watch your pennies a little more closely. Rex suggests using online loan calculators to see how much budgeting can really save you and how much you'll have to pay each month after graduation. It just might scare you into accepting pizza and beer instead of caviar and champagne during business school.
by Francesca Di Meglio
Aponte is certain that enrolling in graduate business school was a "sound financial decision," even though she will be paying off loans after graduation in 2009. Like anyone making such a big investment, Aponte was apprehensive, but she consider that a positive. "It's a good thing to be concerned about finances," she says. "Don't shy away from being nervous." It shows that personal finance—and your financial security—is important to you.
So embrace your anxiety. If you're an aspiring MBA losing sleep over how you are going to afford graduate business school, then you should check out the financial aid tips below:
Ask for Help
Even before you apply, you can get information about the financial aid services available at each school that interests you. Some of them have financial aid offices specific to the graduate business school; others require business students to work with the main university financial aid office along with everyone else. All of them have professionals available to answer your questions and explain the complex world of financial aid. Take advantage of this resource.
Susan Brooks, the financial aid assistant director at Kenan-Flagler, suggests keeping financial aid folders for each of the schools to which you applied—and reading all the material they send you. Do additional research on your own on available scholarships, grants, and federal vs. private loans. Understanding your options, what each school is offering, and educating yourself about student loans in general is key to getting the best deal possible. "Approach it as you would any business decision," says Aponte. "Get as much information as you can as fast as you can."
Get Your Financial House in Order
Take your cues from Aponte and start cutting costs from your current budget as soon as you decide you want to go back to school. Bring a brown bag lunch, nix your Starbucks habit, or quit hanging around the mall on sale day—whatever you can do to keep a few extra dollars in your savings. This will help prepare you for being without a salary for two years. In addition, you'll ideally want some sort of savings for emergencies and a sense of security while you're in business school. Get your credit score from a service such as myfico.com and start paying off other debts, especially bad debt like credit cards. Your lenders will use your credit score to judge your application, so you'll want to be in good standing.
Determine how much you'll need
Consider the cost of the schools to which you have been accepted. If you applied to a state school where you are a resident the tuition will likely be lower and you might think that's reason enough to attend the program. But before making any decisions, you should figure out how much you'll actually need to live and pay for each of the programs. Tuition alone is not enough. You must also consider the cost of living in that state and unexpected expenses for things such as traveling for the job search, purchasing business attire, and attending networking events. Compare the totals you come up with for each program to your current budget to see if you can swing it.
Borrow Intelligently
Once you know how much you need, you can start looking for the money. Free money, the kind you will not have to pay back, should be on the top of your list. This includes scholarships and grants. Talk to the financial aid services staff at your school to determine what, if any, scholarships and grants are available. But keep in mind that it is more difficult for graduate business students to get such offers. "People don't have as much sympathy for MBAs," says Dan Thibeault, co-founder of Graduate Leverage, student loan consolidation and debt management company, in Boston (BusinessWeek.com, 1/27/05).
Most experts suggest that you look to exhaust federal loans, with fixed interest rates, after you have collected all the free money you can and before you turn to private lenders. Graduate business students can take out up to $8,500 in subsidized Stafford loans, which are based on need, do not accrue interest on the loan while your are in school, and come with a fixed interest rate, currently 6.8%. An unsubsidized Stafford loan is the same loan, but interest accrues while you're in school. Since 2006, graduate business students have also been able to consider the Graduate PLUS Loan, which comes with a limit of $20,500. In the past, says Paul S. Garrard, vice-president for student financial services for Sallie Mae (SLM) graduate and professional programs, grad students typically used private loans after they had exhausted the Stafford loans and scholarships. Now they can continue to turn to the government with the PLUS loan.
Not all the experts agree that this is the way to go. Thibeault says students should take advantage of the sudden and dramatic drop in interest rates because they could find a better deal with private lenders than with the government. About 65% to 70% of MBAs can get private loans at a lower rate, he adds. Garrard argues that these private loans have variable interest rates with no caps, which means you could have a great rate when you apply for the loan, but it could skyrocket while you're in school or when you're ready to pay. Whatever you do, at least apply for the federal loans. All U.S. citizens are eligible for Stafford loans, and you might choose to use them simply to keep from tying up your assets, say experts.
Students with a bent for nonprofit work might qualify for loan forgiveness. The College Cost Reduction and Access Act of 2007 has the government completely forgiving your federal loan balance if you go into the nonprofit sector or government after graduation and stay there for at least 10 years, says Thibeault. Only federal loans apply, and after graduation you'll have to consolidate into one direct loan program, he adds.
Live Like a Student
The rise of private loans, says Rob Rex, managing director of OTO Networks, which runs the Student Finance Domain in Baltimore, tempts students to live above their means while they're in school. Business students are especially vulnerable because many of them had good salaries before the MBA program and had become accustomed to a certain lifestyle.
Your best bet, however, is to return to living like a student. Get a roommate if you can stand it, refrain from big purchases, and watch your pennies a little more closely. Rex suggests using online loan calculators to see how much budgeting can really save you and how much you'll have to pay each month after graduation. It just might scare you into accepting pizza and beer instead of caviar and champagne during business school.
Tuesday, February 05, 2008
A day spoilt by ugly pieces of news
At first, the acts of certain politicians and their goons, in mumbai. It was painful to see how they beat up those guys. Just how, how, HOW thoughtless, heartless can someone be. And do they really think there will be groups of people supporting them for such acts? I'll be ashamed to know if there is any such group.
Then there was this post in the bulletin board, about some hospital in bangalore that was about to cut open a dead-body just to ensure a big bill. What form of a human being can ever come up with such a devious, heinous plan.
And then there was a new about an event - a shot even Final Destination series would be proud of - a young guy getting on top of a tamarind tree on insistence of some kids and getting electrocuted. The manner of his death was really horrifying and I can't even describe it myself. Anybody who'd have read that piece of news on the front page of today's (4th Feb) TOI won't be able to get the images out of his mind.
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