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Potential Loans Terrifying

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Current Student
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Joined: 15 Jan 2013
Posts: 22
Location: United States
Schools: Booth '16 (M)
GMAT 1: 710 Q49 V38
GPA: 3.65
Followers: 0

Kudos [?]: 8 [0], given: 1

Potential Loans Terrifying [#permalink] New post 28 Mar 2014, 19:24
Hello All!

Recently, I was fortunate enough to be taken off the Booth Waitlist. However, a few days of elation was quickly replaced by anxiety over the amount of loans I will need to take out. I was offered no scholarship. Thus, my two year cost will be about $180,000. In addition, I still have $60,000 in undergrad loans. This means, I will have about $240,000 of loans when I graduate. I just read a report stating that the average indebtness of a Booth graduate is around $75,000, which seems so low! So my question for you guys if do you think Booth it is worth 180K plus the 60K of undergrad loans that I have? Should I apply to a lower-ranked program and hope for a sizable scholarship?

A little about my background. I currently work in the non-profit sector and make around 55K a year. I hope to work within the consulting industry after Booth for a few years to pay off my loans. I know everyone says a top 5 school is worth every penny, but I'm trying to fathom how long it will take to pay everything off.

New Booth Admit :-D
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Re: Potential Loans Terrifying [#permalink] New post 28 Mar 2014, 21:34
That's quite a lot of debt. Do you have any kind of savings at all? I'm personally attending a school ranked in the top 11-16 range instead and will only take out $60k in loans total after the cost savings. I know people will go in debt to attend their dream school no matter the cost, but I can't fathom having that level of debt on my shoulders. What will you do if you don't get that consulting job? Even if you do get that consulting job, that $240K debt is roughly $340K (pre-tax earnings) that you need to earn to pay that off.

Not trying to sound negative but it's worth thinking about.
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Re: Potential Loans Terrifying [#permalink] New post 28 Mar 2014, 22:03
Expert's post
3 Questions:
1. Have you explored all of the angles at scholarship at booth? I know there are a few options i.e. Polsky Center has one.
2. Did you apply only to one school?
3. If it were Harvard, would you have the same reservations?

I have to admit, that's tough to have a debt burden of that size. Not impossible (but it is pretty much a mortgage in most places).
When calculating, I would take out the $60K from your equation since that's not going anywhere and your living expenses should probably be "fixed" too. They are higher in Chicago than in Pittsburgh but there is still a good chunk of them, so let's say 60K is another fixed amount. So your burden from Booth is only $120K

It is probably a bit too late to get money in top 30 or top 20 school (you can try though) for R3
I would say that the difference of MBA vs. BA is magnitude higher than Top 30 MBA vs. Top 5 MBA.

Can you pull together an application in 2 weeks? Most deadlines are around April 15th. all-mba-deadlines-for-157075.html... probably tough to do that and get the money (which usually scholarship funds are pretty dry by this time, but still holding). If you can pull it off and get an admit from a top 20 or 30 school it is worth a shot. I don't know your capacity but looking at your score (schools sometimes try to woo high scoring individuals which helps them with rankings), your chances for a scholarship at this point are about average.

If you are thinking about applying next year, then I would suggest against it. You are making $55K which is not bad but after Booth you will be making 2x that (well, 1.5x since taxes will be a lot more). Usually waiting a year is not worth it to go through the whole exercise again, unless you enjoyed it.

Ultimately, business school application is a process that requires a lot of effort, faith and luck. It tests you where you are weakest and makes you a stronger person. The decisions you make are yours. People in your situation have gone to school and succeeded and people with much less debt failed.
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Current Student
avatar
Joined: 15 Jan 2013
Posts: 22
Location: United States
Schools: Booth '16 (M)
GMAT 1: 710 Q49 V38
GPA: 3.65
Followers: 0

Kudos [?]: 8 [0], given: 1

Re: Potential Loans Terrifying [#permalink] New post 28 Mar 2014, 22:35
bb wrote:
3 Questions:
1. Have you explored all of the angles at scholarship at booth? I know there are a few options i.e. Polsky Center has one.
2. Did you apply only to one school?
3. If it were Harvard, would you have the same reservations?

I have to admit, that's tough to have a debt burden of that size. Not impossible (but it is pretty much a mortgage in most places).
When calculating, I would take out the $60K from your equation since that's not going anywhere and your living expenses should probably be "fixed" too. They are higher in Chicago than in Pittsburgh but there is still a good chunk of them, so let's say 60K is another fixed amount. So your burden from Booth is only $120K

It is probably a bit too late to get money in top 30 or top 20 school (you can try though) for R3
I would say that the difference of MBA vs. BA is magnitude higher than Top 30 MBA vs. Top 5 MBA.

Can you pull together an application in 2 weeks? Most deadlines are around April 15th. all-mba-deadlines-for-157075.html... probably tough to do that and get the money (which usually scholarship funds are pretty dry by this time, but still holding). If you can pull it off and get an admit from a top 20 or 30 school it is worth a shot. I don't know your capacity but looking at your score (schools sometimes try to woo high scoring individuals which helps them with rankings), your chances for a scholarship at this point are about average.

If you are thinking about applying next year, then I would suggest against it. You are making $55K which is not bad but after Booth you will be making 2x that (well, 1.5x since taxes will be a lot more). Usually waiting a year is not worth it to go through the whole exercise again, unless you enjoyed it.

Ultimately, business school application is a process that requires a lot of effort, faith and luck. It tests you where you are weakest and makes you a stronger person. The decisions you make are yours. People in your situation have gone to school and succeeded and people with much less debt failed.


Thank you for your response!

1.) I have emailed admissions, and they stated they have already given out all of those scholarships/fellowships at this point.
2.) I applied to three other schools (Harvard, Stanford, Wharton) and was ultimately dinged by all of them.
3.) I don't think I would have this problem if it were Harvard since I know they provide need-based aid. Speaking with current Harvard students, I know I would receive a 30K need based scholarship a year.

I am definitely leaning towards just taking out the full-amount since Booth is a top 5 school. In addition, I'm thinking about trying out the consulting world for a few years. I'm just not sure if its manageable.
Expert Post
Founder
Founder
User avatar
Affiliations: UA-1K, SPG-G, HH-D
Joined: 04 Dec 2002
Posts: 12347
Location: United States (WA)
GMAT 1: 750 Q49 V42
GPA: 3.5
WE: Information Technology (Hospitality and Tourism)
Followers: 2324

Kudos [?]: 9436 [0], given: 3701

GMAT ToolKit User Premium Member CAT Tests
Re: Potential Loans Terrifying [#permalink] New post 28 Mar 2014, 22:51
Expert's post
Good luck with your choice! Everything has a price in this world.
Jobs don't pay extra money for nothing. It is a semi-perfect market where companies try to pay as little as they can and applicants try to get away with as much as they can.

If you thought applications were hard, wait till the school starts. MBA will be a lot of work, and if you think that was hard, wait will you have to start the recruiting process. If anyone really realized and looked at all the work involved, I think the ranks of bschools would be much thinner. But all the work is designed to make you better, smarter, more valuable... not many other ways of doing that.

P.S.
If i were you, I would start thinking your current work experience and bringing value to the table of your future employer. Of course you may have been a star in your org but many others are too and have big names on their resumes. If you don't have a big name and amazing experience, your internship will be a critical part of your recruiting later on. Start working on it now - make friends, find people, identify a few companies who can potentially be a good fit and start networking and connecting with folks working there, those who had interned there before (2nd year students when you start).
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Re: Potential Loans Terrifying   [#permalink] 28 Mar 2014, 22:51
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