Financing Your MBA

@novanative: That's unfortunate, I'm sorry to hear that =/.

From what I've been led to believe, it seems that many companies have tightened their purse strings since the economic collapse in 2008, and even if that had no real impact at a particular firm, it sure sounds like a legitimate reason for denying employees aid in there here and now.

@cecilpaladin32

Yup. The good news is that my supervisor and dept head, even the CEO all gave me their blessings on the MBA. I work at a small company of about 80 folks so that's how the CEO is on a first name basis with everyone.

And yes, fewer companies give financial sponsorships to their employees. I wish they would pay my enrollment deposit at least, but no avail. It's all on me either way, and the only financing I have is with the DOE, but at least the financing options are very flexible, and no way am I going with a private loan which was the only way people could finance a graduate education before 2006 when GradPLUS came out.

If you go back to page 7 of this thread, there's a discussion about this. Seems like an intelligent strategy to me.

How soon after you filed your online application did you ger approved from Sallie Mae??

Can/should you compete the Federal application before you have even taken the GMAT, let alone decide which schools you are interested in.

Yes, you can complete the FAFSA before the GMAT and before you apply. If the school you are interested in requires an additional questionnaire, you can often send that in before you are accepted (hopefully) to that school.

he Perkins loan program is a federal loan program that provides low interest (5%) loans to students who demonstrate exceptional financial need. No interest accrues on the loan and repayment does not begin until nine months after the student graduates or is no longer enrolled on at least a half-time basis. Perkins loans are administered through the Tepper School of Business and funds are limited.

I know Perkins offers a good deal for students who possibly qualify, but at most universities that have these loans, they are dished to the undergrad students because all aid tends to go to undergrads, except stafford and GradPLUS. I would also think that perkins is usually given only to students who make relatively low incomes, and/or have a family when entering school, but I may be wrong. I wouldn't qualify anyway based on where I'm applying.

Has anyone encountered the problem of the posted MBA budget being too low? For NYU Stern, the cost of living is stated as $23,534 for room and board, $7,206 for personal expenses, and $936 for local travel (a total of $31,676 for a nine-month academic year, or $3,520 a month; if you spread it across 12 months, it's only $2,640). While you could probably achieve this on a budget (i.e. living like a college student), if I went there I would most likely spend way more than this. My non-retirement savings are quite small and may not cover the excess, especially when you take the summer into account, since you can't simply move out of your apartment if you don't have an internship. Is there any way to borrow over and above this amount, either from the gov't or private lenders?

If you take summer classes, your cost of attendance will be adjusted to reflect a higher living allowance. You would be allowed to borrow up to $42,234 or so for a 12 month year. Otherwise, you can't borrow extra money. You also still get the full living allowance as long as you are enrolled at least half time at the school, generally speaking as far as I know. Don't borrow too much if you don't have to.

I know you can request a budget adjustment, but only for the months you are going to be in class, no exceptions.

You cannot use any type of student loans in order to borrow more money than the cost of attendance, period. And though some of you may disagree with me, I believe that you should only use the Stafford and GradPLUS loans because of the built in federal protections. You don't get that with private lenders.

Thanks for the reply. Has anyone run into the problem of not having enough in loans + non-retirement funds to pay for school + living expenses? I even have a fairly hefty scholarship, but ironically that doesn't help my financial situation at all during business school.

To the private vs. federal loans issue, the way I see it is this: you're paying a hefty premium for the federal "protections" (e.g. forbearance, forgiveness, deferment, etc.). But the probability of you not being able to repay a reasonable amount of student loan debt is (we hope) fairly small. For many of us we have parents, relatives, or loved ones who would most likely help us in such a dire situation. In this case, I would certainly take the lower private rates, since those rates in themselves lower the probability of falling into a dire situation.

I get that private loan rates may be lower if your credit qualifies (or with a cosigner). Yes, my family will help me out if I'm really dire and needed to put down a deposit in school, but they're not going to pay my student loans and see their credit go in the crapper because of me.

Private loans will demand that you pay an ex amount to them regardless of our income, etc., and the payment terms are therefore inflexible as opposed to the federal loans (10 yr forgiveness if in a public service job, IBR/ICR, etc.). Discover and Sallie MAe won't do that for you. All of these loans are non-dischargeable as well, so god forbid you had to file Chapter 7 or 13, these loans are still on your backs after discharge unless you are paralyzed and can't work for the rest of your life.

Granted, the MBA market looks better than the JD market, but given how uncertain job prospects can be, I find it best to have the most flexible payment options are available. I don't intend on going $300K in the hole, but I don't want to see the worst case scenarios pile on me and hear sallie mae come knocking at my door if I can't pay. They make a killing with college students who choose to go to private or out of state public universities, because their parents will only pay so much (EFC), and the students can't borrow federal loans to cost of attendance. Only mom and dad can through PLUS. So the student must use Sallie Mae or go to a cheaper institution (through financial aid and/or tuition price).

I need some advice.

I have about $30k sitting in an open mutual fund. It's not in a Roth or traditional IRA, or even a 529 plan.

My question is should I cash it out prior to starting my MBA (taking out loans to cover the rest) or wait to cash it out until AFTER I graduate and finance my MBA with all loans?

That's for retirement, I'd say take out the loans for the first year, and then re-assess your situation if you want to cash that out in order to limit loan debt.

I have about 25k in outstanding loans from undergrad but am enrolling in an MBA program this fall. does anyone know if lenders are willing to stop/lower interest while I am at school? obviously I will have no/limited income other than my internship while I am attending.

any help or advice is greatly appreciated, and apologies if we've hit on this topic before!

Once interest starts accruing on your loans, it continues to accrue indefinitely until you pay them off. So you may not have to pay your loans while in school, but interest continues to accrue on your undergrad loans. This is definitely the case w/ Federal loans, and is almost always the case with private loans (aka Sallie Mae, etc.)

Three main things to consider when looking for financial aid:

- Grants and scholarships
- Corporate sponsorship
- Loan

There's a useful article on the Global MBA Report website (I think it's in their Admissions/GMAT section?), which gives some guidance and useful links on how to research the above options. It also shows MBA programs ranked by 'Value for Money'!

Personally I'm getting a loan from the Bank of Mum & Dad!!!

thanks for sharing this info.

Have you decided what you're going to do? I'm debating what to do with my money for next year. I've shifted to putting money into a savings account instead of the stock market since I'll be using it shortly for school. I just can't decide what to do with some of my long-term stock holdings and savings when I actually start school. I don't like taking on more debt than I have to but I feel like I'm better off taking a little more loans than I think necessary and holding the cash as a just in case. My wife will be working full time so that will help but she has grad school loans of her own we will need to be paying off so I can't count too much on her salary supporting us a whole lot. Especially if I end up in a big city like NYC or Chicago.