Changing mind about going this fall due to debt : Business School Life
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# Changing mind about going this fall due to debt

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18 Jul 2007, 14:33
I am thinking about bailing. The school is close to me so it's not as if I had to sign a new lease. I was going to be able to stay put in my current apartment. What is freaking me out is the loans. I know my loans would not be much compared to a private school, but the public school I would be going to, a top 50, is relatively expensive for a state institution. With capitalization, I would probably come out around 50k in the hole. What also scares me is placement statistics..average earnings coming out is around 68 k..but some people earn 40..and some earn 110. I was definitely scared when I saw people going to places like Chicago and Haas... and coming out and making 25k..I am not sure how that happened..a hair stylist makes 25k

If I wasn't an older student, I may not be so apprehensive about the loan debt..but unfortunately due to illnesses with both of my parents I had to put off going back for about 3 years (I will be 31 if I go and graduate this dfall( I don't want to be paying off huge loans right when I am trying to get married, and have a family, buy a house etc... Unfortunately I just met my girlfriend last fall..and she is not going to be a huge earner..she is an elementary teacher. Her parents are religious so no chance of us moving in together while I am in school..and the one bad thing is unlike other loans...there are no do overs with student loans..they follow you to the day you die.

I am very sad about not going, but I don't want to be in school thinking about debt 24/7..I am not a person that handles anxiety well
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18 Jul 2007, 16:42
Well, debt is certainly a major consideration. You should also include opportunity costs of the two years that you spend out of the work force. As we have discussed before, ultra-elites are no brainers, and elites are more or less no brainers for most people. Beyond that, people should have a clear idea of what they want to accomplish and how an MBA will help. Not surprisingly, a form of this question is common to most MBA applications.

(I came out of undergrad with nearly $30k and have paid off most of it in 6 years -- while making practically nothing:$9k, $17k,$19k, $24,$25, and $30. Nonprofit is grand! And we've managed to buy a home during all this.) Your friend's story is one I've heard before, and it really is a horrible situation. However, it's certainly not the norm. Again, you need to make decisions based on you and your goals. Is there something else going on? SVP Joined: 24 Aug 2006 Posts: 2132 Followers: 3 Kudos [?]: 138 [0], given: 0 [#permalink] ### Show Tags 19 Jul 2007, 08:20 Debt is certainly an issue. My friend and I joke about taking a$10k vacation before we start bschool. Hell what's another $10k on top of$200k?

I agree with Pelihu about the ultra elites/elites. If you try hard enough at those schools, there's no reason you shouldn't be able to land an 85k+bonus job. But if you're at a lower cluster school, it may be tougher.

Bschool is not for everyone, because some people can't cut it and because some people don't need it. There's no shame in not going.

But, I sense there might be some other issue with you, so I will finish by posting this little gem by Alex Chu (I read this every now and then to inspire myself):

So It's this overwhelming fear and indifference that prevents most people from accomplishing great things (you'll notice it in many office environments -- there's always that guy who bitches and moans, and is always planning on leaving but never does right? Or the guy who always responds with "that's just the way it is. It is what it is."). Nothing big accomplished comes without great sacrifice or heartache or a trail of disappointments along the way. It's like loving someone -- the person you love the most is also the very person who can hurt you the most.
So if you think about anyone who overachieves - whether it's athletic, artistic, social/political, entrepreneurial, etc. they poured their heart and soul into it. They weren't casual about their process, no matter how flip or nonchalant they seem to be about it not being a big deal. It is a big deal - few people are in the mood to talk about and relive all the crap they've gone through to get to where they are. You need the courage to endure suffering and heartbreak in order to have your shot at glory (whatever that may be).

Another thing. You are who you associate with. If you want to be inspired to do great things, you need to be around others who have done such things already -- what they have done can help feed, galvanize and inspire you. I'll stop now as it's becoming too Dale Carnegie...
I really hope I'm just touching on the obvious here - nothing I'm saying here is new. But you want to know the difference between an overachiever and someone who's not -- the masses overestimate natural talent, and underestimate the heart and guts necessary to turn that talent into something special.
Alex Chu
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19 Jul 2007, 09:01
I just signed and returned a promissary notice to Sallie Mae for almost that same amount, and that's just for the first year at a tier two school. Figure in a (soon to be) unemployed wife and barely enough in savings to scrape by a meager existence until mid '08 - when I say meager, I mean packed tuna sandwiches and bicycle commuting - yet somehow I have a hard time being convinced that a reputable American graduate business education (arguably the world's best) won't have a positive influence on my career during an anticipated period of sustained global economic growth with record low unemployment rates. And that's taking the WCS in which I will have to start over from scratch after completing an MBA.

As hackneyed as it sounds, nothing worth having in this world is free. An AACSB accredited MBA, even if it's from a trans elite school, opens doors, period. An elite or ultra elite MBA knocks the doors clean off their hinges with the force of a battering ram.

Another certainty is that the door almost never magically opens on it's own.

Anybody can claim financial hardship and request a one year forebearance (with interest accruing), however, inevitably at some point in time the same individual is going to have to face monthly repayments of ~$700 on a$90K loan for a long, long time. What it comes down to is how much is a shot at a significantly life changing opportunity worth to you? How much faith do you have in yourself? Are you just flirting with the idea of an MBA because it seems like the fashionable thing to do or do you you have somewhat of a plan as to where you want to be in 2, 5, 10+ years, allowing for possible contingencies?

If as you say you are 31 now, then you should have roughly 25~30 good working years ahead of you post-MBA. Calculate your salary now with realistic annual pay raises and compare that figure to the bottom 80% of what your school's reported first year starting annual income. Add in conservative wage increases and expand the first figure over 22 years and the second over 20 years. Don't even consider bonuses. If the latter figure is not at least 15% higher than the former, and you place no intrinsic value on knowledge, the advanced degree itself, and potentially a new marketable skill with an exponentially increased professional network, then perhaps an MBA is not for you.
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19 Jul 2007, 16:03
I am guessing the MBA is not for me then.
It is something I would do if the risks were not so high. I am not totally risk adverse, but I am rather frugal. Putting it this way, if the cost for this program was what it was 7-8 years ago, I would not have an issue with going back right now. I would really like to go into finance, but not bad enough to put myself under that kind of pressure to succeed during and after the program. Tuition is going to go up another 8% this fall, and probably another 8% next fall. I am not someone that deals with anxiety well. Plus I have some concerns about my mother's health..if something goes wrong during school, I don't want to have to leave or be faced with helping her out and trying to go to school. It wouldn't be worth it

I did get a full tuition scholarship and an assistantship for another state school in the midwest, but I don't think I can leave right now.

This just really sucks..
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19 Jul 2007, 16:35
The more the risk generally the greater the return though. I think that people who get MBA's only for the money will more often than not be dissappointed. Yes it most likely will be a finacial gain but the people doing it only for the money are the ones that generally having images of millions in their heads and if 10 years out they are "only" making 200K a year they wont be happy. If you like what you do, can get by comfortably, and are terrified of the debt then dont subject yourself to all the stress.

And honestly, if you are risk adverse and get anxious over money then you shouldn't get an MBA and go into finance. Imagine what losing other people's money would do to you. Imagine a downturn in the markets where you lose millions in a day. In business you will deal with figures factors higher than 50K and you would need to be comfortable with that or you would put yourself into an early grave.
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19 Jul 2007, 21:18
Well now it may be changing again...it looks like student loan reform is going to pass..and worst case scenario, I won't have to sacrifice more than 15% of my disposable income for student loans and if the balance is not paid in 20 years, the debt is forgiven.. If this goes through, the same thing that happened to my friend could not happen to me..sure if loans are deferred for any length of time interest will balloon, but any time you are not making income it would still count towards the 20 years..so basically I won't have to worry about these loans following me to my grave regardless..
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19 Jul 2007, 21:27
I am primarily concerned about my employability coming out..if this was a top 10-20 school, I don't think it would be as much of an issue. Its borderline top 50..its a good regional school and is ranked in some areas..Salary stats are ok..average salary for finance is 71k a year..but some come out of there making 40-45 (those with no experience in finance..such as myself)
Maybe I should reinvigorate myself and try for a better school next fall:?
Maybe I won't be so apprehensive?
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19 Jul 2007, 21:52
I think you're being smart. 2 years of your life and $75-150k are huge commitments, and it's wise to give it some careful consideration. If you're not comfortable with the situation at hand, then giving it another go this year and trying for a better school seems to make sense. Senior Manager Joined: 02 May 2004 Posts: 311 Followers: 1 Kudos [?]: 7 [0], given: 0 [#permalink] ### Show Tags 20 Jul 2007, 04:22 I think I will pick up my student ID..that will allow me to ride public transportation for free for three years..and my free copies of Vista Ultimate and Office 07..before I formally withdrawl from the program..that is the last I can do considering the deposit for the program was 1 k:) Current Student Joined: 29 Jan 2005 Posts: 5238 Followers: 24 Kudos [?]: 365 [0], given: 0 [#permalink] ### Show Tags 20 Jul 2007, 04:30 If you don't mind sharing, which school are you having second thoughts about? If you hold out for another year, are you absolutely sure that you can/will want to put yourself through the entire admissions application process again? How much confidence do you have in your ability to gain admissions to a significantly better program? Senior Manager Joined: 02 May 2004 Posts: 311 Followers: 1 Kudos [?]: 7 [0], given: 0 [#permalink] ### Show Tags 20 Jul 2007, 05:25 The school is Pittsburgh (Katz). I went to undergrad there and the program is local for me. I had some major family issues (father battled prostate cancer..and my mother became ill as well) over the last two years, and I did not feel comfortable applying to a school too far from home in case I had to help out. I was planning on going back sooner, but couldn't due to those issues..didn't want to be distracted..If I was a few years younger, I am not sure I would be so concerned about debt as I wouldn't mind living like a pauper for a few years to pay it down... I received a 12k scholarship from them, and only 1/3 receives any type of scholarship... Stats are 690 GMAT and 3.8 QPA I know I can break the 700 mark..I actually bombed the verbal section in comparison to what I usually get..I got a 41 and on every single practice test I got 44-45, and in one instance a 46. Unfortunately they do not offer assistantships..I wouldn't have cared if I was sweeping the dean's floor every night. I am not overly concerned about the quality of a program as long as its AASCB accredited..I mean it would have to be top 50, but I would like a program where I can obtain an assistantship..and take on minimal debt. I am not looking to move into IB or consulting..I would be content just to move into finance in a non-sales capacity at a decent salary ($65+).
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20 Jul 2007, 08:01
You might be well served to delay your MBA for a year. Start studying ofr the GMAT again and bump your GMAT up 30-40 points and apply to CMU. They seem to really like higher GMATs (probably to help the rankings like many in the mid to high teens). Your GPA is solid, your GMAT is good, and with good work experience you have a good shot if you put it together right. Your personal struggles definitely are something to use for essays, the whole overcoming adversity is always a good story.

If your school will let you differ you could attempt an application to CMU and if you get in great if not then you got yourself an extra year to reevaluate b-school instead of rushing to a decision. If you get into CMU that will give you access to much better jobs and higher pay. It would be worth paying all expenses out of your pocket to attend it instead of accepting the scholarship to the lesser school.
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20 Jul 2007, 12:11
Would your company pay if you went part time? Seems like that could be the right compromise for your situation. I don't think your stats (read: numbers) are keeping you out of higher ranked schools, plenty people with your #'s at ultras and elites, but rather other stuff in your profile or maybe how your application essays come across. There are areas of finance like operations and risk management where you would get to experience the markets, wouldn't have to go against your risk appetite (actually you'd be charged with keeping the traders in line lol), and have a decent work/life balance. I dunno who hires in Pittsburgh but if you moved to NYC, Boston, Chicago, San Fran, etc. you'd probably be looking at \$75K or more. You only live once, if the job of your dreams is attainable with an MBA then screw the debt and go for it. If you want to stay where you are then don't bother.
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20 Jul 2007, 13:06
I thought my employer had tuition reimbursement when I started, but they don't pay for MBA's..doesn't make sense..class has to be related to current job..which is kind of dumb

On another note, I have an interview with a Pittsburgh division of ML next Tuesday..they have tuition reimbursement:)
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20 Jul 2007, 14:39
You have very good stats @ 690 and 3.8. If I were in your shoes i'd defer another year. Apply to some other programs next year including FT or PT @CMU. I think they (CMU) have a pretty good flexmode program. In the meantime nail the interview with the job that gives tuition re-imbursement.

jamesrwrightiii wrote:
I thought my employer had tuition reimbursement when I started, but they don't pay for MBA's..doesn't make sense..class has to be related to current job..which is kind of dumb

On another note, I have an interview with a Pittsburgh division of ML next Tuesday..they have tuition reimbursement:)

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