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jamesrwrightiii
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Is anyone else freaking out about debt? 25 Mar 2008, 23:30
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piper41955
Debt in this case isn't a horrible thing, lets do the math:

Say you spend 100-150k on an MBA, your prior salary was say 75k and your post is 110k, you have effectively increased your salary by 35k or around 1400 per month after tax. 150k at 6.5% over 15 years is $1300 a month, 100k at 6.5% over 15 years is $872 per month. So even on the high side, you are still technically ahead of the game. Worst case scenario, you put off buying a house for 5 years and agressively pay down debt first.
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I think you are really underestimating the costs here. The interest rate for Stafford Loans is 6.8%. The Total allowed per year for Stafford is 20500. If you want to go Federal to make up the difference, your only other option is Plus Loans which come it at 8.5%. If you consolidate the loans, then the consolidated interest rate is the weighted average of loans at 8.5% and at 6.8%. If you have to take out a ton of money, you will be pretty close to the 8.5% rate..150k at 8.5% a month is around $1860 dollars a month. $1860 dollars a month for 10 years is nothing to sneeze at. At least according to federal guidelines, one would need to make over $230k a year in order to not have a hardship paying back this loan (hardship is defined as having to may more than 10% of your AGI towards loan servicing). Lots of things can happen which may prevent you from paying back the loan..unlike any other debt, there is no discharge of student loan debt for any reason.
It would follow you to your grave. At least any other kind of loan..mortgage..car..gambling debts. etc..can be discharged via bankruptcy.
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Is anyone else freaking out about debt? 26 Mar 2008, 03:20
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wow. A lot of you are fortunate that your SO`s can carry on working.

For me it`s completley different. If i was to go to the USA, my wife will be unable to work for 2 years, and with 2 kids, that`s a lot of extra cash i need to be able to do it.
I can get some income my switching my mortgage for my house in London, to an interest only (it`s rented out) . My post mba-goal is to return to Asia, so if I do get into a USA school, i have to calculate the ROI vs the probable lower income, and balance that figure vs the projected long term benefits. The difficulty is measuring some of the intangibles (alumni networks and potential opportunities) if i was to get into a good USA school.
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Is anyone else freaking out about debt? 09 Feb 2009, 12:29
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Has anyone considered taking a loan against the current mortgage to minimize the loans they need to take out in other places?

For example, if you can refinance at fixed 5%, take some equity cash out, so you can reduce the amount you need to borrow from other sources (such private loans/stafford/ etc.)

I'm at 6.25% right now on my condo, and I have to refinance anyway, so I'm wondering if this is a good idea. I can use the cash I take out on my mortgage to cover my expenses (rent, food) while I'm going to school FullTime.

Any thoughts?
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Is anyone else freaking out about debt? 09 Feb 2009, 14:37
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bigfernhead, you should obviously refinance if you qualify for a fixed mortgate at 5%.

However, I'd be very surprised if someone would extend a home equity line of credit to you at a rate that is considerably lesser than a private education loan.

If you need to borrow additional funds to cover expenses beyond your estimated cost of attendance produced by your school's financial aid office then what you propose might be a decent idea, but beware that most HELOC's will most likely be variable rate and (like with private education loans) you will be taking on some interest risk there.

Or do you know for sure that you can borrow against the equity in your home at 5% fixed?

bigfernhead
Has anyone considered taking a loan against the current mortgage to minimize the loans they need to take out in other places?

For example, if you can refinance at fixed 5%, take some equity cash out, so you can reduce the amount you need to borrow from other sources (such private loans/stafford/ etc.)

I'm at 6.25% right now on my condo, and I have to refinance anyway, so I'm wondering if this is a good idea. I can use the cash I take out on my mortgage to cover my expenses (rent, food) while I'm going to school FullTime.

Any thoughts?
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Is anyone else freaking out about debt? 11 Feb 2009, 07:07
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That's what I'm counting on. Fixed at 5%, not the HELOC.

Figure that'd be cheaper in the long run that at 6.8% fixed for student loans. Sound reasonable?

solaris1
bigfernhead, you should obviously refinance if you qualify for a fixed mortgate at 5%.

However, I'd be very surprised if someone would extend a home equity line of credit to you at a rate that is considerably lesser than a private education loan.

If you need to borrow additional funds to cover expenses beyond your estimated cost of attendance produced by your school's financial aid office then what you propose might be a decent idea, but beware that most HELOC's will most likely be variable rate and (like with private education loans) you will be taking on some interest risk there.

Or do you know for sure that you can borrow against the equity in your home at 5% fixed?

bigfernhead
Has anyone considered taking a loan against the current mortgage to minimize the loans they need to take out in other places?

For example, if you can refinance at fixed 5%, take some equity cash out, so you can reduce the amount you need to borrow from other sources (such private loans/stafford/ etc.)

I'm at 6.25% right now on my condo, and I have to refinance anyway, so I'm wondering if this is a good idea. I can use the cash I take out on my mortgage to cover my expenses (rent, food) while I'm going to school FullTime.

Any thoughts?
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Is anyone else freaking out about debt? 11 Feb 2009, 07:11
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Take a look at https://www.bankrate.com/, $30K home equity loans are at about 8.5% interest. HELOCs are about 5.5%.
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Is anyone else freaking out about debt? 17 Feb 2009, 20:28
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the mortgage interest deduction doesn't phase out at super-low levels like the student loan interest deduction does (https://www.irs.gov/publications/p17/ch29.html).

Something to think about, though - and here's the inner financial counselor coming out. You should realize that you are leveraging up your home - an important source of personal wealth and the place where you live.

If you fall into tough economic times, your house is the last thing you want to default on, and more leverage means a higher likelihood of default.

Obviously most of us will be fine, but it's always something I feel compelled to throw out there.
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Is anyone else freaking out about debt? 18 Feb 2009, 04:46
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Balance the phase out with the fact that you can defer payments on student loans until 6 months post graduation. For mortgages, HELOC, etc., the bank is going to want payments right away. And the payment on a $30,000 HELOC would not be insubstantial if you have no income.

Also, if the past year has taught us anything, it should be that overleveraging your home is not a great idea. Like any other asset, the price of homes can fluctuate - having equity makes it less likely that you will find yourself in a position where your home is worth less than the loans you borrowed against it.
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Is anyone else freaking out about debt? 26 Feb 2016, 17:01
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amorica
It just hit me all of a sudden..I was elated about getting into a couple of schools..this has been a long and hard process. But where my primary focus had been just getting into schools, I know find myself contemplating the potential debt I will incurr. Its putting a damper on me right now. Anyone else feel the same way?
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You and me both!!!
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Is anyone else freaking out about debt? 28 Feb 2016, 15:44
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The OP makes an interesting observation. Yes, the MBA might get you some great corporate job where you get to sit in a cube for 50 hours a week, but what if after two years you realize you want to be a school teacher? In the OPs scenario, he can't go do that because of the monthly debt payment. And he is exactly right. That's why I suggest to everyone that they really consider if this is the right move for them and not just follow the crowd of people who rush to business school when they are 24.
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Is anyone else freaking out about debt? 12 Jan 2021, 04:53
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A few years back, my life was going great and I was enjoying the luxury lifestyle but a single moment changed my life drastically. In a blink of an eye, I was thrown to deal with a great amount of debt. I had no solution in hand to deal with all of this mess. One of my close relative suggested to me about the accredited debt relief company and this organization helped me out in dealing with my debt conveniently. This organization is not less than a Robbin hood for me.
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Is anyone else freaking out about debt? 10 Feb 2021, 13:37
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Hi all,

Personal MBA Coach is here to help you maximize your chances of MBA Scholarship success!

First, let's discuss the basics on MBA scholarships.

Scholarships/fellowships fall into two major categories:

1. Merit-based money offered as a result of the MBA application.

The vast majority of scholarship $$ are offered based on your original MBA application. They do not require you to submit anything additional. Schools offer this money to candidates they are trying to attract (often away from other schools).

This money can come directly from the school itself, having nothing to do with the applicant’s specific demographic or professional background. Or the scholarship may be in collaboration with another organization. While this other organization may suggest guidelines for consideration, it is up to the schools to decide which candidates actually receive the award.

For example, one of our partners, the Forté Foundation, gives the following guidelines to admissions directors selecting Forté Fellowship recipients:

· Candidates should exhibit exemplary leadership in one or more ways: academic leadership, team leadership, community leadership, and creative leadership.

· Candidates should demonstrate a commitment to women and girls via personal mentorship or community involvement. Such commitment is in alignment with the mission of Forté Foundation.

· Schools are encouraged to nominate fellows from their schools who represent diverse educational and work backgrounds, career goals, ethnicities and citizenship.


2. Scholarships that students apply for directly.

These scholarships generally target specific candidates based on industry, ethnicity, gender, etc. A separate application is required for each of these scholarships, and specific criteria apply.

Examples include:

[url=about:blank]The Consortium[/url] (note: you can also apply to participating schools through the scholarship application): Since 1966, we have offered more than $465 million in fellowships to the best and brightest MBA students in the country. We have programs that cover full tuition and mandatory fees for two years of full-time study (Emory also offers a one-year program).


The Paul and Daisy Soros Fellowship For New Americans: The Paul & Daisy Soros Fellowships for New Americans is a $90,000 merit-based fellowship exclusively for immigrants and children of immigrants who are pursuing graduate school in the United States. The program draws nearly 1,800 applications annually for just 30 fellowships.

Military MBA: Military MBA is an education network for military officers and NCOs who are interested in obtaining and applying their MBA graduate degrees for career advancement. We represent MBA schools and prospective MBA students who have a background in the military.

Now that we know the basics about MBA Scholarships, find out what you can do to maximize your chances of earning one of these coveted scholarships.

Here are 4 key tips from Personal MBA Coach.

1) Ensure your application stands out!

The good news for candidates hoping to receive a scholarship is that the same advice Personal MBA Coach provides on developing stand-out applications applies to earning scholarships, too (which is why our clients do so well!).

Business schools look for well-rounded classes. For candidates hoping to secure extra $$, it is even more crucial that your application tells a solid story about how you will add unique value on campus.

At the end of the day, the school wants to pay you to be one of the best students on campus. This can be because of your outstanding academic qualifications or because you will contribute on campus in a unique way.

2) Court your target schools.

MBA Admissions Directors do not want to hand out precious money only to lose the candidate to another top MBA program. Therefore, while it is not required, getting to know a school never hurts your chances of getting $$.

While COVID-19 is preventing MBA applicants from visiting campus, there are many options for reaching out to and connecting with your target MBA programs. In the best-case scenario, you will build a rapport with an admissions representative and directly improve your chances of earning a scholarship.

Even if this does not happen, attending online events and interacting with the school you hope to attend will give you valuable material to make your essays stand out. Remember, students are often the most valuable resources since admissions directors may not be as available to chat with you.

3) Submit your applications as early as possible.

With a limited amount of money to go around, the earlier you can get your applications in, the better. Schools also want to be sure that their classes are filled with well-rounded students and are more likely to use scholarships to ensure this earlier in the process.

By round 3, there is likely to be less money left.

That said, scholarships sometimes do open up even late in the year!

4) Excel in as many areas as possible.

While this may seem obvious, I often see candidates who have a decent GMAT/GRE score but have not put in the extra effort to maximize it. If you took the test once and did little preparation, consider getting a tutor to reach your full potential!

Similarly, I see candidates who do not want to dedicate time outside of the office to beef up their extracurricular profiles.

While I always advise that candidates put their best foot forward, this is even more crucial for those looking for a scholarship. Scholarship recipients most often excel in multiple areas.

About Personal MBA Coach:

Founded by a Wharton MBA and MIT Sloan graduate who sits on the Association of International Graduate Admissions Consultants Board of Directors, Personal MBA Coach has been guiding clients for 14 years and is consistently ranked #1 or #2, currently holding the #1 ranking in the US on Poets&Quants.

We help clients with all aspects of the MBA application process including early planning, GMAT/GRE/EA tutoring, application strategy, school selection, essay editing and mock interviews. Our team includes a former M7 admissions director and former M7 admissions interviewers.

Last year, our clients earned more than $6M in scholarships!
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