As an international student, should I go in with zero financial aid?

Question

I have been admitted to a top-20 US B-School without any scholarship.
I expect to spend 160K-170K including tuition, living, travel, club fees, etc. after making 5k-15k through a summer internship.

My goal is to start up within 2-3years of completing my MBA.
During those 2-3 years after my graduation, I wish to work in the tech industry in the US.
Therefore, from a career perspective, it doesn't seem right to keep paying off an education loan for 8-10years.

I have heard of a few cases where some international students who received visa sponsorship from companies were unlucky in the H1-B lottery process.
Now that's my worst nightmare!
Not only is it a compromise on my career goals, but it also means that I have to pay a massive American education loan on an Indian salary.
At least 3 years of working in the US would help me pay off half that amount.

What's your opinion? Should I take the plunge next week and put down that deposit?
I know this is a "it depends on ...." kind of an answer.
But is there something I am acting completely foolish/unaware about?
My other option is to apply next year with a better GMAT and get a scholarship.
 (Wild, whacky suggestions/answers are as much appreciated as mature, experienced, well thought out ones! Thanks in advance!)

Vibranture · Answer

Hi there, Congrats on your admission offer!

Your concern is valid. However, several Indian students attend top US B-schools without any financial aid (myself included). In fact, most of the top schools tend not to offer scholarships to students from India because of the competitiveness of the candidates. The risk of not having visa sponsorship will always be there, but one way you can reduce your risk is to be proactive and get multiple job offers during recruiting. Then have all the companies file for your H1B and see which one gets approved! Yes, you can have multiple/ concurrent visa applications, so that increases your chances of a lottery. Also, if you will be attending a Top university, your visa is more likely to get approved. Just in case, your visa gets denied/ rejected, having a US MBA degree with you can get you good offers back in India as well. At times some companies (like J&J) recruit in the US B-schools for international offices (incl. India) and would be open to giving you signing bonus that you can use to pay off your student loans. On the other hand, it is also not uncommon to see bright students get good jobs/ visas only to be laid off because of restructuring/ company reasons. The point I'm making is that you can't really be entirely certain before you make either choice. You will have to take a leap of faith at some point. Good luck with your decision!

hiajit · Answer

Thanks a ton. That gives me some direction for sure. Had one question though. How is it that going to a reputed high ranked school increase your chances of getting a visa? Because I thought that apart from 20000 STEM visas, everyone else in the remaining 65000 anyway have to face the lottery. For example, during one particular year, out of two of my friends, the one who went to Kellogg was unlucky and had to return to India, whereas the other one who went to much much lower ranked school landed a job. Basically are you implying that coming out of a good school opens you up to multiple offers thereby increasing the odds of securing a job/visa.

Vibranture · Answer

To answer your Q:How is it that going to a reputed high ranked school increase your chances of getting a visa?

Well, going to a well-known university doesn't help you in the lottery but when your case reaches the USCIS, a student from a reputed school is generally perceived more genuine and well-qualified over someone from rather unknown colleges. Having said that, it is a risky process and your fate/ decision lies with the understanding (or lack thereof) of the immigration officer.

Hope this helped.

hiajit · Answer

Vibranture  ,Thanks! Your input definitely counts.

VeritasPrepEdison · Answer

Another way to think about it is that your post MBA possibilities are not limited to US and India. Opportunities might also be there for you in Europe or other parts of Asia.

If you want to make additional arguments for doing the MBA:
1) It provides future options that you may have yet to consider
2) You may also view it as a consumption good rather than a purely investment - with the intellectual stimulation, prestige, and new experiences it will provide you. Some people spend on fancy cars and possessions, exotic tours, while you will be spending on an expensive education with at least some probability of paying for itself!

Hope these additional perspectives are helpful!

hiajit · Answer

Yes, I have considered those other places in between US and India. But thanks for reinforcing that perspective. At least it doesn't make me question whether I should go in for an MBA at all.

Well about considering it as a consumption good, I would totally agree with you on that. The question I am then battling with is that whether I should go for some school between ranks 20-30 where I possibly might earn scholarship money and tuition will also be a tad bit cheaper (applied in Jan rounds, interviewing now). Because quite honestly, if we are talking international markets, there'll be few recruiters who'll have heard of a non-top10 B-school and will most likely treat a top20 in the same way as top30. (Exceptions in the top10-20 are brands such as NYU, Cornell)

bb · Answer

There is always a question about Entrepreneurs and MBA. The traditional answer is that it does not make sense to load yourself with 100-200K of debt in order to be broke during the startup process.... that of course has been a very weak deterrent to many stubborn entrepreneurs... it is life. I would not worry about H1B as you have no influence over it and who knows what the quota will be in 2 years or what the economy will even be.

One thing to mention/address is that it is going to be VERY hard to pay off your loan in 5 years or less. Not impossible, just very hard. I had a similar plan and there were a few things I was not aware of. 1) After graduation your budget will take many hits - you will need new clothes for work (and because you will be 10-20 lbs heavier thanks to junk food and lack of exercise), 2) You will need a car or a better car 3) You will just spend money much easier as you will be making more in your mind and you will be tired of a student lifestyle. 4) Student loans tend to have low APR so there is always a temptation to use it to pay off other loans (e.g. housing, car, credit cards, etc). Again, it is possible to be disciplined and save enough to pay off your $180 by that time in loans but on a 120K salary, you will pay $30K in taxes ($35K in some states) and you will need to save $50-60/year to pay off your loans in 3 years. That leaves you with $25-40K and rent/car/insurance/etc will eat a lot of it up; not feasible really to live in any major metro area unless you live with many roommates and eat junk food (which many have done for the last 2 years and usually want to stop/edn as soon as humanly possible). Bottom line - that loan will take a while to pay out.

That brings the point of top 20 MBA vs. Top 50 for example - if you are planning to start your own company, a school like Babson or a few others may make the most sense, and esp with a scholarship in hand, you can start working on your venture while in School - I started GMAT Club during my first year of business school (thought it was more of a hobby than a business). The difference in opportunities and the fact that you want to start your company does not justify trying to get into a slightly better ranked program. Just my 2 cents.

hiajit · Answer

bb , Thanks a ton!
I think I was just lost and was feeling pathetic turning down that offer!
You guys have helped me think more clearly and this last post from  bb  has made me look at the larger picture.
I really appreciate all you guys writing such detailed posts. I barely expected any responses.
I hope this topic helps other members who are in a similar situation.
Hopefully, I'll have a story to post here in March or April.

hiajit · Answer

Here's an update: I got through a couple of schools in the top30 category and managed to earn a fair scholarship amount and the overall expense too is $25K cheaper. Had applied in January this year. Going in with a substantially smaller loan seems to have eased the pressure, hopefully a decision I won't regret two years later.

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VeritasPrepEdison · Answer

Congratulations and thanks for sharing the update.

Wish you all the best, enjoy your MBA experience!

As an international student, should I go in with zero financial aid?

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