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Loans or not for MBA financing?

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Intern
Joined: 13 Nov 2013
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Loans or not for MBA financing? [#permalink]

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22 Dec 2013, 00:41
Is there any situation in which it's worth it to actually take out loans to pay for an MBA if you don't need to? The one situation in which it looked like it would be worth it is if you have a US government subsidized loan where the government pays interest until you graduate, but that seems to require financial need which someone who can pay for their MBA in cash would not be able to demonstrate.

Has anyone here taken out loans even when they have enough money saved to pay for school? If so, why?
Manhattan GMAT Instructor
Joined: 01 Jul 2013
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Re: Loans or not for MBA financing? [#permalink]

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22 Dec 2013, 21:34
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It's a simple question of the 'cost' of that money today and tomorrow.

If you have the cash on hand, do you think you can generate a higher-return with that cash than what it would cost you to borrow? Remember that there is a small interest tax deduction on back-end when you are paying it back. Are you relatively risk-averse and prefer having cash on hand?

Treat this no differently than you would any other asset/investment (car loan, etc.)
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Brian Lange | Manhattan GMAT Instructor | North Carolina

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Re: Loans or not for MBA financing? [#permalink]

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06 Mar 2014, 19:25
I had the same question. I ran into a few articles on TopMBA that helped me a lot. Its too much to try to explain on here but basically you have the option of scholarships, loans and financial aid.
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15 Mar 2014, 18:45
Mediatech 6 -- What did you decide to do here? Your journey is one faced by many students -- and I bet that people would appreciate learning about what you decided to do.
Thanks!
-Brian
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Re: Loans or not for MBA financing? [#permalink]

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16 Mar 2014, 10:06
brianlange77 wrote:
It's a simple question of the 'cost' of that money today and tomorrow.

If you have the cash on hand, do you think you can generate a higher-return with that cash than what it would cost you to borrow? Remember that there is a small interest tax deduction on back-end when you are paying it back. Are you relatively risk-averse and prefer having cash on hand?

Treat this no differently than you would any other asset/investment (car loan, etc.)

Pretty reasonable line of thinking.

As a side note, if you have the cash to pay for an MBA, you're part of a very fortunate minority!!?! Why walk away from your successful PE career now?
Manhattan GMAT Instructor
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Re: Loans or not for MBA financing? [#permalink]

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29 Mar 2014, 17:42
brandon432 wrote:
brianlange77 wrote:
It's a simple question of the 'cost' of that money today and tomorrow.

If you have the cash on hand, do you think you can generate a higher-return with that cash than what it would cost you to borrow? Remember that there is a small interest tax deduction on back-end when you are paying it back. Are you relatively risk-averse and prefer having cash on hand?

Treat this no differently than you would any other asset/investment (car loan, etc.)

Pretty reasonable line of thinking.

As a side note, if you have the cash to pay for an MBA, you're part of a very fortunate minority!!?! Why walk away from your successful PE career now?

It's important for people to think about the long-haul. Sometimes, you have to take a step sideways, or even backwards, to get to the ultimate goal. And there is no one.. I repeat.. NO ONE.. who best knows what your ultimate goal is than the guy (or gal) you see in the mirror on a daily basis!
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Brian Lange | Manhattan GMAT Instructor | North Carolina

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Re: Loans or not for MBA financing? [#permalink]

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12 Apr 2016, 08:55
Loan interest rates with Prodigy Finance are a bit high...Do international students in the UK have any other option?

Regards

M
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Re: Loans or not for MBA financing? [#permalink]

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19 May 2016, 23:52
mediatech6 wrote:
Is there any situation in which it's worth it to actually take out loans to pay for an MBA if you don't need to? The one situation in which it looked like it would be worth it is if you have a US government subsidized loan where the government pays interest until you graduate, but that seems to require financial need which someone who can pay for their MBA in cash would not be able to demonstrate.

Has anyone here taken out loans even when they have enough money saved to pay for school? If so, why?

Yes, it could make sense to do so. Evaluating this as the cost of your source of funds could lead to the conclusion that it is a good option to take on a loan for the MBA.

Money is fungible. Thus, the savings you have could go into the business or personal expenditure you would take on in the near future, if the interest and terms on the student loan would be more favorable than that for the business loan/personal loan, then it could make sense to take on the loan.

Another reason would be the preference to maintain a certain level of liquidity throughout, while doing the MBA. This could be as emergency funds, especially if you have dependents, or if you are looking for an investment opportunity.

Look forward to hearing what you did and how you feel about your decision. All the best!
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Re: Loans or not for MBA financing?   [#permalink] 19 May 2016, 23:52
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