Who will pay my fees? aka No loan, No MBA
When I mentioned the salary in USD in the various application forms, I used the conversion rate of 1USD = 40INR, and by the time of submission that rate went upto 50 INR !! Its expected to go upto 60 INR. My salary thus became even more negligible in dollar terms. Assuming 150000$-200000$ to be the total cost I would incur for an MBA from US if I bring my family along, we are speaking of 1 crore INR. To give you an idea, dividing that by a number more than 10 would get you to my current annual salary (No I won’t tell you that exact number). 1 crore is an unimaginable sum of money for me. If I were to somehow manage to get a loan for that amount in India, even my whole lifetime wouldn’t be enough to repay the same. Even considering a 10% increase in my annual salary every year and continuing to work beyond 60.
Getting a loan in USD for say, half that amount for an MBA, can be paid off by a)either working in US for 3-5 years or b)working in India with a much higher post-MBA salary within 10-15 years.
So in any case, going for a US MBA for candidates from my pool hinges on the guarantee that a) we would manage the required funds through a combination of scholarships/fin aid/loans/personal savings, and b) the post MBA job would justify and pay for the huge loans that we have incurred. This is the reason why I had to drop some very good schools from my list because they did not guarantee a non-cosignor loan option, or their loan amount did not extend upto the living expenses. Despite all the talk about ‘fit’, this concern became the most defining basis for selecting or eliminating a school.
Exactly a month ago, having finalized my schools, I was knee deep into their essays without the knowledge of what would hit us a few days later. When things came tumbling down, I was glad that I had made the decision to apply to these schools so much in advance because now the applicant volume would begin to surge. And then came the realization that it was going to hit me in more ways than one. Banks have already begun to announce the end of their loan programs to some of the schools.
Hows the changed scenario going to affect things on the ground ? Here’s what I think –
- Banks, and schools, would increasingly shift from a non-cosignor to a cosignor loan option.
- Such a move would hit international applications, mostly countries whose PPP relative to US are like ours where affording the whole cost on our own is out of question.
- It can be presumed that schools would work out some loan program for international applicants.
- Would it hit the schools’ diversity for class of 2011? To a miniscule extent, yes. They would still get enough Indians, Chinese, Koreans, South Africans, and all the various other nationalities, but they may not be from India, China, Korea, South Africa anymore. US itself has enough of them.
- The diversity can easily be traded off with the new volume of US applicants who would apply to these schools. Most of them would be people with a highly successful career before the wall collapsed and put them on the street, and hence schools wouldn’t have to compromise on quality.
- In the above case, would the schools really care about diversity for diversity’s sake?
- Most international applicants already had to face visa issues post their MBA, and the increased competitiveness now at making it into your MBA school would continue to haunt you during post MBA employment as well.
- I see no incentive for the banks to stick with the non-cosignor options anymore, unless the schools push them for the same.
- Do the schools see an incentive in pushing the banks for the same ?
In the best case scenario, perhaps the schools would work out a solution before the first deposits are due by March-April. For me, the guarantee of a loan at this stage is as important as the loan itself. Else it would be haunting my minds when I interview for that school. The reason I’ve applied for all schools in R1 is because I need to arrive at a decision by December. It wont help to have no clarity about the finances. And what about the uncertainty of what might happen when the time comes to pay the fees for the second year ?
First things first. Getting an admit is the priority, I’ll definitely have time to think over everything else later.
Though it has never looked riskier. In fact, it might just go further downhill from here.
Would I have still applied had the crisis occurred before I began the process? Not if I came to know that there’s no way now or in the future for me to arrange the funds.
What would I have done instead? I would have had to apply to schools in asia pacific.
Would that have helped? Perhaps, cos I have decided to leave my job and industry by year end in any case.
Wouldn’t it be wiser to hold on to my job and wait until things improve? Wiser, yes. Possibility, zero.
Why do I get the feeling that I’m in deep shit now? That’s always been the case. Good to realize it sooner.
How would I come out of it? By waiting until December, and then considering my options for the future.
No loan, no MBA ? Yes. Definitely.
Am I worried ? Yes. Apprehensive ? Yes. Scared ? A bit. Why? Because this dream is bigger than anything else.