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Financing Your MBA

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Re: Financing Your MBA [#permalink] New post 24 Jan 2009, 16:52
aaudetat wrote:
MeddlingKid wrote:
I recall reading, some time ago, that one should try to postpone any financial gifts when attempting to secure Federal aid for B-School. When I receive my Financial Aid package, will the amount I have in my 401(k) and/or savings account affect how much the Federal government would be willing to loan me? I recall hearing that one could borrow up to the full budgeted yearly amount from the Fed, but I'm guessing the amount of money in my accounts would determine how much Uncle Sam gives me in unsubsidized loans.


they do not count qualified retirement accounts (401k, IRA) or the value of your home. They will look at non-qualified accounts, such as savings, money market, stocks, etc.

The subsidized/unsubsidized part is determined by need.


So a person could, theoretically, take out the full amount in Plus loans even if he didn't receive any need-based Stafford aid?
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Re: Financing Your MBA [#permalink] New post 24 Jan 2009, 16:58
Yes, but why would you want to do that if you can take $20,500 in unsubsidized Stafford loans at 6.8% each year, as opposed to the GradPlus loans at 8.5%.

Eligibility for unsubsidized Stafford loans is not need-based. And even if you qualify for subsidized Stafford loans, you can only borrow $8,500 a year under the auspices of that program.

MeddlingKid wrote:
So a person could, theoretically, take out the full amount in Plus loans even if he didn't receive any need-based Stafford aid?
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Re: Financing Your MBA [#permalink] New post 24 Jan 2009, 18:00
solaris1 wrote:
Eligibility for unsubsidized Stafford loans is not need-based. And even if you qualify for a subsidized Stafford loans, you can only borrow $8,500 a year under the auspices of that program.

not need-based? my bad. I know that in undergrad my friends from wealthier families got all of their staffords as unsubsidized while mine were all subsidized.
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Paying for MBA [#permalink] New post 25 Jan 2009, 02:39
I read this article talking about financial aid and loans are down this year. This hasn't hit me yet, since I applied in R2. For those of you that applied in R1 and got admitted, have you guys started looking into how to finance the education? Is financial aid and loans really down? I think Kry said his loan jumped to 11%, that's crazy, my credit card rate isn't even that high. Any anecdotes you would like to share?

http://news.yahoo.com/s/ap/20090125/ap_ ... PCw_Gs0NUE

Last edited by nink on 25 Jan 2009, 05:35, edited 1 time in total.
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Re: Financing Your MBA [#permalink] New post 25 Jan 2009, 06:14
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From what I understand, the federal loan programs (Stafford and GradPLUS) are still readily available, at 6.8% and 8.5% fixed rates. It's the private loans that are the problem.

I won't know for certain what my situation is until I get my financial aid letter from the school with my "expected family contribution." But I expect that just using federal loans and savings I'll be able to afford school. It's more a matter of if I can get private loans as well at a reasonable rate, I'll be able to keep more of my savings and/or live more comfortably at school.
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Re: Financing Your MBA [#permalink] New post 25 Jan 2009, 09:05
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aaudetat wrote:
solaris1 wrote:
Eligibility for unsubsidized Stafford loans is not need-based. And even if you qualify for a subsidized Stafford loans, you can only borrow $8,500 a year under the auspices of that program.

not need-based? my bad. I know that in undergrad my friends from wealthier families got all of their staffords as unsubsidized while mine were all subsidized.


From a non-official website (http://www.staffordloan.com/stafford-loan-info/graduate-stafford-loan.php):
Subsidized Stafford Loans are awarded to graduate students based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government "subsidizes" the interest during these times.

Unsubsidized Stafford Loans are not awarded based on financial needs. Any eligible graduate student can take out unsubsidized stafford loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full.

And the rates (school year/subsidized rate/unsubsidized rate):

2008-09 6.00% 6.80%
2009-10 5.60% 6.80%
2010-11 4.50% 6.80%
2011-12 3.40% 6.80%
2012-13 6.80% 6.80%
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Re: Financing Your MBA [#permalink] New post 25 Jan 2009, 09:18
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Just a quick comment, the official website for federal student aid programs is:
http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp.

Everything else is just some lender posing as an "official" resource. StaffordLoan.com is just a site owned by one such lender, and is not affiliated with the Department of Education's Stafford program.

While you are free to go with any lender for Stafford and GradPLUS loans (the incentives and rates virtually all lenders offer are now identical), it's probably a good idea to pick a Stafford/GradPLUS lender "recommended" by your school's financial aid office.

This doesn't apply to private education loans however.

isa wrote:

And the rates you posted isa apply to undergraduate Stafford loans. Stafford loans for graduate study are fixed at 6.80%, they don't come down gradually like the undergraduate ones will in coming years.
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Re: Financing Your MBA [#permalink] New post 25 Jan 2009, 09:24
solaris1 wrote:
Just a quick comment, the official website for federal student aid programs is:
http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp.

Everything else is just some lender posing as an "official" resource. StaffordLoan.com is just a site owned by one such lender, and is not affiliated with the Department of Education's Stafford program.

While you are free to go with any lender for Stafford and GradPLUS loans (the incentives and rates virtually all lenders offer are now identical), it's probably a good idea to pick a Stafford/GradPLUS lender "recommended" by your school's financial aid office.

This doesn't apply to private education loans however.

isa wrote:


Woah - good to know that there are sites posing as "official" resources. Thanks for the heads up.
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Re: Financing Your MBA [#permalink] New post 25 Jan 2009, 09:26
solaris1 wrote:
And the rates you posted isa apply to undergraduate Stafford loans. Stafford loans for graduate study are fixed at 6.80%, they don't come down gradually like the undergraduate ones will in coming years.


Good to know solaris1 - I was actually going to ask why they come down gradually. I had heard that the rates were fixed so that was confusing. :)
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Re: Financing Your MBA [#permalink] New post 26 Jan 2009, 13:04
FYI

BW is hosting a chat with with Dan Thibeault, president and co-founder of Graduate Leverage, a student lending organization launched by Harvard Business School students. He’ll be answering questions about everything from how international students can find a co-signer to how much money you’ll really need to fund your MBA education.

http://forums.businessweek.com/n/pfx/fo ... &tid=79078
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Re: Financing Your MBA [#permalink] New post 26 Jan 2009, 13:29
ninkorn wrote:
FYI

BW is hosting a chat with with Dan Thibeault, president and co-founder of Graduate Leverage, a student lending organization launched by Harvard Business School students. He’ll be answering questions about everything from how international students can find a co-signer to how much money you’ll really need to fund your MBA education.

http://forums.businessweek.com/n/pfx/fo ... &tid=79078



FYI - I met this guy and thought he was pretty cool. We talked about teaming up to do something at Fuqua, but somehow first year slipped away from me....
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Re: Financing Your MBA [#permalink] New post 28 Jan 2009, 08:27
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Stimulus Plan Would Provide Flood of Aid to Education

The economic stimulus plan that Congress has scheduled for a vote on Wednesday would shower the nation’s school districts, child care centers and university campuses with $150 billion in new federal spending, a vast two-year investment that would more than double the Department of Education’s current budget.

http://www.nytimes.com/2009/01/28/educa ... ml?_r=1&hp
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Re: Financing Your MBA [#permalink] New post 30 Jan 2009, 07:49
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Financial Woes Force B-School Cutbacks
Plunging endowments and reductions in state funding are leading to layoffs, salary freezes, even program shutdowns. And the worst is still to come

http://www.businessweek.com/bschools/co ... =rss_daily

Chat Transcript: MBA Loan Crisis
Dan Thibeault, co-founder of Graduate Leverage, fields questions on the loan challenges facing international MBA applicants

http://www.businessweek.com/bschools/co ... =rss_daily
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Re: Financing Your MBA [#permalink] New post 05 Feb 2009, 16:56
I have no problem covering the tuition and estimated living expenses through scholarship and Stafford loans. However, I am very confused as to how one covers car payments and credit card debt through the two years without income. I know it is illegal to direct education loans to such expenses, but I also find it hard to believe that no one has ever attended grad school who hasn't owned their car in full or had zero credit card debt. Also, I know federal loans can't be taken out over the school's estimated expenses. My particular school's estimate seems paltry at best...can private education loans be taken out to cover expenses above the estimated amount, or are these too capped off at what the school estimates?
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Re: Financing Your MBA [#permalink] New post 09 Feb 2009, 10:57
Has anyone tried to take a loan against their current mortgage to fund their education?
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Re: Financing Your MBA [#permalink] New post 09 Feb 2009, 12:29
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Private education loans are capped up to the estimated cost of attendance figure calculated by your school's financial aid office. You can try and have your school's financial aid folks adjust your budget to account for car payments and credit card debt (not sure if they'll agree, but worth a try) but unless I'm mistaken you're expected to pay existing debt (with the exception of existing student loan debt) with your personal savings I suppose.

DimpBiz wrote:
I have no problem covering the tuition and estimated living expenses through scholarship and Stafford loans. However, I am very confused as to how one covers car payments and credit card debt through the two years without income. I know it is illegal to direct education loans to such expenses, but I also find it hard to believe that no one has ever attended grad school who hasn't owned their car in full or had zero credit card debt. Also, I know federal loans can't be taken out over the school's estimated expenses. My particular school's estimate seems paltry at best...can private education loans be taken out to cover expenses above the estimated amount, or are these too capped off at what the school estimates?
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Re: Financing Your MBA [#permalink] New post 09 Feb 2009, 13:33
I'm going into B-school with no debt, save a leased car that I'll be making payments on for another year and a half or so. The payment isn't bad. I know it'll make things a little tighter budget-wise, but who's to know if I use part of my cost of living allowance from my loan to pay for my car (and save on, say, rent or something else)? Surely others have done this.
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Re: Financing Your MBA [#permalink] New post 10 Feb 2009, 04:50
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bigfernhead wrote:
Has anyone tried to take a loan against their current mortgage to fund their education?


Assuming people still have enough home equity to borrow against, I think the downside to this is that you'd have to start making payments as soon as the loan is disbursed, whereas student loans you can generally defer payments until after graduation (interest still accrues during the deferral period).

I'm also going into school with a car lease, and will be making those payments out of personal savings. However, since money is fungible, I don't think anyone could ever track whether the payments for car-related expenses came from savings or from my loans.
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Re: Financing Your MBA [#permalink] New post 11 Feb 2009, 06:06
I'm going with the idea that you can take the loan out at the rate of financing for the home, which would be cheaper than the rate of loans for school....
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Re: Financing Your MBA [#permalink] New post 11 Feb 2009, 06:07
bigfernhead wrote:
I'm going with the idea that you can take the loan out at the rate of financing for the home, which would be cheaper than the rate of loans for school....

Just remember that there is no grace period on home loans. You'll have to take out more to be able to make payments on the loan while in school.
Re: Financing Your MBA   [#permalink] 11 Feb 2009, 06:07
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