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Am I crazy for going to B-school?

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Intern
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Joined: 22 May 2018
Posts: 3
Am I crazy for going to B-school?  [#permalink]

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New post 22 May 2018, 08:18
Hi guys,

I've learned a lot from these forums about the application process, and I've finally gotten into a b-school; now I 'd love thoughts on whether I am making a crazy financial decision. I know this is a major risk/investment like other things in life, but I just need someone who can look at the numbers and flag whether this is clearly a bad (or good) decision.

Current Salary: 80k in nonprofit-- prob 2% increase a year
Current Savings: 35k
Current 401k: 40k
Current Undergrad debt: 55k (10k in fed, 45 in private)

Got into a top 15 school (think Yale, Ross, Stern) and I'm planning to go into management consulting.

What story do the numbers tell?
Intern
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Joined: 06 Oct 2015
Posts: 22
Location: United States
Concentration: Marketing
Schools: Ross '18 (M$)
GMAT 1: 730 Q48 V42
GPA: 3.52
WE: Consulting (Consulting)
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Re: Am I crazy for going to B-school?  [#permalink]

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New post 22 May 2018, 09:53
Do you want to work as a consultant or for a nonprofit? The numbers will work out if you allow yourself a long enough payback period, but that really shouldn't be your focus. How would you rather spend your time? Which career is more exciting for you? This decision should have much less to do with ROI than with happiness.
Intern
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Joined: 22 May 2018
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New post 24 May 2018, 03:13
Good point; I want to eventually transition into social impact and int development (social impact consulting was high on my list but pay out of school seems low and I worry about the debt). So I've resigned myself to working for profit for experience and money and transitioning back to social impact later.

I don't mean to reduce this to just a financial ROI; i just wanted to get a sense of if my debt levels are way too high to enjoy life at all.
Intern
Intern
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B
Joined: 06 Oct 2015
Posts: 22
Location: United States
Concentration: Marketing
Schools: Ross '18 (M$)
GMAT 1: 730 Q48 V42
GPA: 3.52
WE: Consulting (Consulting)
Reviews Badge
Re: Am I crazy for going to B-school?  [#permalink]

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New post 24 May 2018, 06:23
Yeah, I didn't mean to say that finances weren't important, but it's very difficult to tell someone else that loan payments are manageable over ten years without knowing their exact career outcome.

As a starting point though, I used a loan calculator from finaid.org and found that $185,000 in loans (55+130 in new loans), paid over 10 years with an interest rate of 6.8% worked out to $2128 in monthly payments. Also, using a take home pay calculator from ADP, a $140K yearly salary, after federal, state (I used IL), medicare, and a 6% 401k contribution, works out to $7532 in take home pay per month.

There's a million assumptions embedded in these totals, but hopefully this gives you something to think about. Can you commit to a high paying job for the 7-10 years that will be necessary to pay off loans? Can you live the lifestyle you want on $5000 per month? Could you possibly chose a lower cost of living city to live in to make loan payments more manageable?

If you are excited about consulting or other for-profit jobs, I think you can definitely make this work. Good luck with your decision!
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Re: Am I crazy for going to B-school?   [#permalink] 24 May 2018, 06:23
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