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Financing Your MBA

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Re: Financing Your MBA [#permalink] New post 15 May 2010, 07:54
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If last year was any indication, no matter how high your personal credit score, you won't qualify for lenders' best rates unless you have an equally creditworthy co-signer with you on your application.

Times2012 wrote:
Does anyone have an idea what credit score it takes to qualify for the best rates from private lenders? I was surprised to find out that I "qualified" for the worst rate 7.75 + LIBOR from Discover Financial. My credit score is in the 80th percentile.


At 7.75 + LIBOR you may as well borrow under the Dept. of Ed.'s Direct Lending PLUS loan program, whose interest rate is fixed at 7.9%/
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Re: Financing Your MBA [#permalink] New post 26 May 2010, 09:03
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not sure if someone already posted this (i saw historical LIBOR and prime), but here for reference, average effective student loan rates:

http://www.finaid.org/loans/historicalrates.phtml
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Re: Financing Your MBA [#permalink] New post 01 Jun 2010, 12:19
Trying to understand the mechanics of loans a little better.
1) If you apply for a private loan, do you forgo Federal Plus in its entirety? So you can't do 20K in private and the rest in Federal, right?
2) I heard your credit score temporarily deteriorates every time there is a credit check request done on your profile. So how do you shop around for a loan? Or does student loan check not impact your credit score?
3) Is it always better to have a co-signer? Even if you think your credit score is somewhat good?

Thanks!
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Re: Financing Your MBA [#permalink] New post 17 Jun 2010, 19:20
Not sure what you mean, it's up to you what kind of loans you choose to take on. If your school calculates your annual cost of attendance at say $80,000; you can take whatever combination of Federal or Private loans you want (subject to some Federal loan annual maximums) until you hit that $80,000 ceiling.


dindin wrote:
1) If you apply for a private loan, do you forgo Federal Plus in its entirety? So you can't do 20K in private and the rest in Federal, right?
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Re: Financing Your MBA [#permalink] New post 06 Jul 2010, 16:23
so what banks (if any) are people using? i'm looking at citi, wells fargo, and discover. any other good ones? i was hoping to co-sign and get the lowest possible rate
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Re: Financing Your MBA [#permalink] New post 08 Jul 2010, 12:35
shadowsjc wrote:
so what banks (if any) are people using? i'm looking at citi, wells fargo, and discover. any other good ones? i was hoping to co-sign and get the lowest possible rate


I applied to like 5 programs. I have perfect credit, and used a cosigner with perfect credit. Chase gave me the lowest rate. I believe someone over at BW reported Sallie Mae gave a great rate too. So I'd add those to your list
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Re: Financing Your MBA [#permalink] New post 18 Jul 2010, 18:52
i just heard back from sallie mae w/ cosigner (800+ credit score): 9% + LIBOR. looks like i'll be emptying out my bank account to pay for year 1.
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Re: Financing Your MBA [#permalink] New post 30 Jul 2010, 14:20
I have a question about financing/applying. Some of the schools apps ask you to say how you are financing your MBA and fill in percentages coming from self, family, employer, scholarships, government, etc. How does anyone already know that during the application process? I haven't even done my FAFSA yet so I'm a bit confused about what to put for these questions. Any advice?
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Re: Financing Your MBA [#permalink] New post 02 Aug 2010, 11:07
bruinboi wrote:
I have a question about financing/applying. Some of the schools apps ask you to say how you are financing your MBA and fill in percentages coming from self, family, employer, scholarships, government, etc. How does anyone already know that during the application process? I haven't even done my FAFSA yet so I'm a bit confused about what to put for these questions. Any advice?


They just want estimates. They won't hold you liable if your estimates aren't 100% accurate.

At some schools, it is a good planning tool to have such data for budgeting in future scholarships and etc.
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Re: Financing Your MBA [#permalink] New post 21 Oct 2010, 07:23
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B-school applicants take a massive beating to their wallets!

Here's a story on the massive expenses they incur even before starting their university life. You can check out the story on the BusinessBecause website - titled 'Costs pack a punch for B-school applicants'.

Thanks! :)
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Re: Financing Your MBA [#permalink] New post 15 Dec 2010, 10:15
This is a great thread - it's really beneficial to read through a couple years' worth of experiences!

A question: what impact does state residency have on financial aid (excluding tuition differences at state schools)? Do most people switch residency to the location of their school? I did not do this for undergrad but I'm not sure what makes the most sense for MBA - since I might only be in that state for two years I'm not sure whether to move everything or to use a more permanent address in a different state.
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Re: Financing Your MBA [#permalink] New post 21 Dec 2010, 10:02
So here's my question:

I just got into Wharton. Can I use a 529 account to pay for it (partially...since I don't yet have one)? I live in New York and could deduct up to $5000 from state income tax so it would definitely be worth if it if I could. There are 10 days left in 2010 so I would be able to make a 2010 contribution and a 2011 contribution (and maybe a 2012 contribution) and get the benefit of the tax deduction. Allowed to do this? Not allowed? Anyone have any past experience with 529 accounts?
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Re: Financing Your MBA [#permalink] New post 21 Dec 2010, 13:51
I'm not a CFP, but I did stay at a Holiday Inn Express last night.

Just kidding, but it sounds like a great plan, mate! I did some online searching to see if New York tries to recapture the deduction on the other side, but have found that everything looks solid. If you have already earmarked the cash, definitely push it into a 529 on both sides of the calendar.

I just finished a financial planning class, and our professor told us that because you get this state tax deduction, tax-free growth, and tax-free withdrawal that it's one of the best investment vehicles available.

A Health Savings Account is the top dog because most states give a tax deduction AND you get a federal deduction along with the tax-free growth and tax-free withdrawal, but that won't help you pay for Wharton : P
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Re: Financing Your MBA [#permalink] New post 21 Dec 2010, 13:53
method wrote:
I'm not a CFP, but I did stay at a Holiday Inn Express last night.

Just kidding, but it sounds like a great plan, mate! I did some online searching to see if New York tries to recapture the deduction on the other side, but have found that everything looks solid. If you have already earmarked the cash, definitely push it into a 529 on both sides of the calendar.

I just finished a financial planning class, and our professor told us that because you get this state tax deduction, tax-free growth, and tax-free withdrawal that it's one of the best investment vehicles available.

A Health Savings Account is the top dog because most states give a tax deduction AND you get a federal deduction along with the tax-free growth and tax-free withdrawal, but that won't help you pay for Wharton : P

Thanks. I did a bit of research after posting and called Wharton SFS and they said I definitely can make payments from a 529 account so I opened an account with $5K and will put another $5K in next year. Thanks for confirmation though.
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Re: Financing Your MBA [#permalink] New post 21 Dec 2010, 15:16
This obviously doesn't apply for International students, does it...?
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Re: Financing Your MBA [#permalink] New post 21 Dec 2010, 19:16
MackyCee wrote:
This obviously doesn't apply for International students, does it...?


Well, if you don't pay taxes here it wouldn't help you...it does apply to US students going to school internationally (at least for NY...differs by state)
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Re: Financing Your MBA [#permalink] New post 24 Dec 2010, 20:44
How do people think about using their own savings vs taking on debt? Looking to other bankers and private equity guys here....are you taking on (relatively cheap) debt to conserve savings? Using all your cash to avoid debt? Take on as much debt as it takes to keep you living the lifestyle to which you've grown accustomed?
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Re: Financing Your MBA [#permalink] New post 26 Dec 2010, 08:48
Jmw125 wrote:
How do people think about using their own savings vs taking on debt? Looking to other bankers and private equity guys here....are you taking on (relatively cheap) debt to conserve savings? Using all your cash to avoid debt? Take on as much debt as it takes to keep you living the lifestyle to which you've grown accustomed?


I don't know how you figure that student loan debt is cheap. Graduate loans are 6.8% for Stafford & 7.9% for GradPLUS. Most people don't actually get a much better rate from private lenders (which often don't offer fixed rates). It's debatable whether you'll see higher returns than that in the market in the next several years (particularly in real terms). People taking on as much debt as needed to live a particular lifestyle is what got us into the whole mess we just suffered, you should surely tighten down and try to live on a more reasonable budget while in school.
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Re: Financing Your MBA [#permalink] New post 26 Dec 2010, 10:48
highhopes wrote:
Jmw125 wrote:
How do people think about using their own savings vs taking on debt? Looking to other bankers and private equity guys here....are you taking on (relatively cheap) debt to conserve savings? Using all your cash to avoid debt? Take on as much debt as it takes to keep you living the lifestyle to which you've grown accustomed?


I don't know how you figure that student loan debt is cheap. Graduate loans are 6.8% for Stafford & 7.9% for GradPLUS. Most people don't actually get a much better rate from private lenders (which often don't offer fixed rates). It's debatable whether you'll see higher returns than that in the market in the next several years (particularly in real terms). People taking on as much debt as needed to live a particular lifestyle is what got us into the whole mess we just suffered, you should surely tighten down and try to live on a more reasonable budget while in school.

So as a current student, tell me what % of your pre-MBA savings did you use to pay for business school.

Oh, and i'd just like to say that this type of loan to someone like me has absolutely nothing to do with what "got us into trouble". I work in PE and by the time i matriculate will have more than my two years of tuition saved up. I will graduate with a job that will result in my having no problem paying off whatever debt i take on. That is not nearly the issue. My question is simply around graduating with more debt and more cash as opposed to less debt and less cash. Also nothing to do with my rate of return in the market...more to do with security of having available cash and potentially the ability to put a down payment on somewhere to live post MBA.
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Re: Financing Your MBA [#permalink] New post 31 Dec 2010, 09:11
Regarding demonstrating need for need based scholarships: Is the need usually determined by your income over the last three years or also the amount of cash you have in your bank account / other assets. I am asking because I hold some assets under my name that are actually for a family member, but it will inflate my assets when I'm applying for scholarships. If it is only based on income I'm fine. Should I transfer the assets to the appropriate person before the time comes to apply? Is there a time limit by which this should be done?
Re: Financing Your MBA   [#permalink] 31 Dec 2010, 09:11
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