Financing Your MBA

huh?

Bump=getting an older thread back up towards the top of the queue so people are more likely to notice it and give their input.

I don't know how most people do it, but I'd say as long as you keep enough cash on hand to cover living expenses and keep you set in case of an emergency, you're fine paying out of pocket for your MBA.

But if you have some solid investments that are likely to pay off at a higher return than the interest rate you would be paying on your loans, you'd be better off putting some of that cash into investments and taking out loans for your degree.

I am curious about this too. Not sure how much cash to keep and how much to use to avoid taking a bigger loan. I was thinking of setting aside $10k for any emergencies or to cover a few months living expenses after graduation, does this amount sound reasonable? Would it be best to take any remaining cash to pay first semester tuition and living expenses and defer receiving any loan disbursements until I run out to cut down on accruing interest?

I have no idea how student loans work, fortunately didn't need for undergrad...do they disburse the full tuition amount upfront and then continue to pay out for living expenses throughout the year? Also do I need to reapply for loans each year, or do I apply for the full amount I think I will need at once?

Yes, have a "banker" boyfriend and you will be all set

Well that wasn't too helpful...anyone else?

Looks like I'm your banker boyfriend.

Your financial aid accounting will happen twice in the year, at the beginning of each semester.

Around August, they will take your total due for the first semester and then apply half of any scholarships, loans, or grants that you've received. If there's money left over, that's the part they disburse. You can take out financial aid up to the school's total cost of attendance (COA). COA = tuition plus fees plus an estimated cost of living plus a first year laptop. They'll repeat this process around January and you will get your other half.

Cash versus Loans: That's a personal decision. We all know that you pay more on debt than you make on savings, but that's not really the decision point here. I guess I would get as much as you can in loans and other financial aid. Then make a spending plan so that you don't burn through the disbursement before second semester starts. Hold the cash to the side to pay for things that you can't get a student loan for: getting hit by a car (yep, it happened to me my fist term), touring Argentinian wine country with your awesome new friends (couldn't go - was having surgery from car accident), a shopping spree after realizing that your nonprofit wardrobe won't make the cut for banking interviews (I thought my COA should have been ratcheted up accordingly, by no dice).

If it turns out that that $10M is just sitting there after year 2, then go ahead and pay down those loans! Or put a down payment on a house or whatever.

That's how I would have done it.

ouch....it's almost a bit funny reading it, but it must have sucked at the time... hope you're all okay from it now

thanks for the helpful post!

Thanks...appreciate the reply and hope you are fully recovered!

I should have enough cash to pay almost the first year's tuition and living expenses without touching the $10k in my emergency fund (unless I get hit by a car, but I would suppose that constitutes as an emergency lol) so I was wondering if I should put off receiving loan disbursements until I actually need it to avoid the interest accumulating during that time?

I'm inclined to take go a little heavier on loans the first year, on the assumption that whatever I think I'll need for living expenses, I'll end up spending more. The one thing that's clear from talking to current and former students is that all the extracurricular activities can add up, but are unique experiences worth the cost. I want to keep an extra cushion on hand for the first year at least - and maybe I can borrow less the second year.

Even with enough cash to cover TCA for a year, I'd consider at least taking advantage of the Stafford Subsidized loan since interest doesn't accrue while in school. Unless I'm missing something, if you pay it back at graduation it's essentially free money for two years (less the origination fee which works out to something like $50).

I'm guessing I probably won't qualify for the subsidized loan and the unsubsidized would accrue interest while in school

Anyone consider structured loans from parents? Can retirement money be used for these?

This thread is helpful. People havent mentioned any outside scholarships, are there well known MBA scholarships that people can apply for?

Hey I posted a thread about this, but it got no responses. Maybe this is a better place to ask it.

Does applying early decision to a school hurt your chances of getting financial aid / scholarships?

Okay - how does it work if your parents are covering a significant portion of your MBA - for example all of tuition? Should they write me one big check a year? What are the cons? I'll need to take out a loan to cover the rest of my cost of living expenses.

Oh and why does FAFSA have a March deadline for CA residents. I haven't applied yet, am I screwed for this year?

From my understanding - if your parents write you a check the value over $13k will be subject to the gift tax. If they make the check payable to your school the gift tax doesn't apply.

Has anyone been approved for the Direct Stafford/Plus loans? Do you have an idea of the general turnaround time for this? I submitted by SAR/MPN to my school almost three weeks ago, but haven't heard anything back.