US MBA Loan and Re-Payment->Worth It? A Discussion

[RuMMager]

Originally Posted by nagpalkunal

You better be somebody real smart cause otherwise everything that you wrote looks like crap from a disgruntled soul.

And did you notice, you did not substantiate any of your "words of wisdom"

If you don't want to reach up, so be it. Don't write your prejudiced opinion for people who have just started and could very well end up doing themselves much good with an MBA from abroad, but for your note here.

The words 'crap', 'disgruntled' are uncalled for. That means you need PG to understand what I wrote. And what is the prejudice I am showing here?

Moreover I give two craps to a foregin MBA. And I am working in US for a living.

[rawatashish1]

thanks buddy,
it is really very helpful.

[firewithin]

Originally Posted by ponram

I just gave my GMAT a few days back and scored 670. While preparing,i never bothered to think abt financing,placements etc. Now I am unable to concentrate on Essays after reading this post. I should have continued my prev trend of not reading such stuff till my application atleast.
Guys, If you are posting such 'Doomsday' stuff be sure to provide solid evidence. We Indians sure do a lot of gossip.

Have been goin thru this post and my contribution would be folks what exactly do u mean that u need evidence .its plain and simple log on to the top 10 universities in the US
Check out the fees structure of these colleges and also consider the scholarships offered .In most of the colleges u will also have the tab wherein u can check whehter ur elligible for a schol or not .Once done with the basics see ur savings and voila u know how much amount of money sahll be required .You do not need any evidence for all this
Let me also assure u no matter how many schols u get the truth is
a) U will be burning a huge hole in your pocket
b) to repay you would have to atleast stay for a minimum of 5 years
So the choice is yours

[bancsy_me]

Originally Posted by comet_nosce

Confirming each of the statements above..
going through a loan approval process myself so am pretty much acquainted with what it takes.
Another thing that I ignored or rather was unaware of is that any school requires a guarantee of prospective finances before it can issue an I-20.
Loan applications require an I-20.

So to get a loan, one needs the I-20, and to get the I-20 one needs the guarantee of funds, which in turn is the loan.

So all sorry souls who depend on a loan for funding their education.. beware of this deadlock !!

cheers -

This is so unfortunate. Aren't there any exceptions (ie universities that issue I-20s w/o guarantee of finances)? I heard some schools offer guaranteed loans to international students without any US cosigner (Wharton, Tuck, Stanford et al) but I don't know if they require some form of proof that you have the resources (not including any loan) to complete the MBA. Can someone confirm?

[Anand_rao]

Originally Posted by bancsy_me

This is so unfortunate. Aren't there any exceptions (ie universities that issue I-20s w/o guarantee of finances)? I heard some schools offer guaranteed loans to international students without any US cosigner (Wharton, Tuck, Stanford et al) but I don't know if they require some form of proof that you have the resources (not including any loan) to complete the MBA. Can someone confirm?

Uptil last year Darden offered a loan without co-signor. All we needed to do get the I-20, in terms of finances, is to let them know that we were planning to take this loan. This loan was provided by certain institutions and to my knowledge lot of the top B-schools offered the same option. However, there was a law passed in US that restricted instutions having a preferred lender. To my knowledge, these organisations have withdrawn the garunteed loan program.

All said and done, I do beleive that if you get into a top B-school getting a loan should be an issue. You should however, still research the options at every school you are applying to and reach out to financial aid office to ensure that this would not be a constraint if you get in.

[neo_joe]

Originally Posted by kgkid

Rahul i would disagree with you on this. You can get 100K+ easily after an MBA from a top school. Infact, in IB and Consulting you can make upwards of 130K (including bonus, etc) at the drop of the hat. So whatever you are saying is not really what happens. And i am pretty darn sure about it. You would be surprised but in IM your average bonus can be equal to your annual salary (pretty common in the likes of Goldman Sachs and Lehmann Brothers).

Okay when i said 10 years it was more because of the lifestyle you would be leading. If you can stay in a 2 bedroom rented apartment with a Toyota Camry then you can prolly pay back the loan in 4 years max. But, i doubt one would lead that life after an MBA and certainly would want to have a 4 bedroom, 3000 sqft house + BMW etc due to peer pressure...

I hope you understand the perspective now.

I second my decision in saying that an MBA from a top 15 at US business school is absolutely worth it. The global reputation and money is uncomparable.

I totally agree with this perspective. I have worked in the Silicon valley for quite some time and it all matches up with what kgkid is saying.

[xtremelegacy]

This is an extremely interesting conversation you guys have going on here.

But there are a number of factors I think that have to be considered before saying - "oh it takes X years to pay of a loan".
some of them have very well been mentioned - like the quality of your life, your intent on staying in the US/eur, the kind of job u secure..

but then again arent the roi's only so distorted because theyre worth it?
wont an ivy league mba change the trajectory of your career path? as compared to maybe a 30th best college?

[nagpalkunal]

Originally Posted by Anand_rao

Uptil last year Darden offered a loan without co-signor. All we needed to do get the I-20, in terms of finances, is to let them know that we were planning to take this loan. This loan was provided by certain institutions and to my knowledge lot of the top B-schools offered the same option. However, there was a law passed in US that restricted instutions having a preferred lender. To my knowledge, these organisations have withdrawn the garunteed loan program.

All said and done, I do beleive that if you get into a top B-school getting a loan should be an issue. You should however, still research the options at every school you are applying to and reach out to financial aid office to ensure that this would not be a constraint if you get in.

Allow me to add my two cents in this discussion.
Anand, Darden still has loan without co-signor. The law that was passed has reduced the subsidy given to private lenders like national etc. which has then prompted them to reduce or rescind on their commitments to the educational loans. the direct impact is on US citizens and green card holders who are well, sub prime.

(There has also been some major fines including on Sallie Mae, Citibank and others who were the "preferred lenders" because they were being favored for by the financial aid office of certain schools.)


Ok, back to the original discussion. Admittedly though, Sallie Mae which till now used to give loans to internationals albeit at a pretty high rate will not in all probabilities continue to do so. It already has stopped for a lot of US nationals/PRs.

However, and this is a big relief, Citiassist loan still exists for all internationals at top schools like "Darden".


So there. just to clarify certain issues.

Cheers

[cryonerve]

Originally Posted by bancsy_me

This is so unfortunate. Aren't there any exceptions (ie universities that issue I-20s w/o guarantee of finances)? I heard some schools offer guaranteed loans to international students without any US cosigner (Wharton, Tuck, Stanford et al) but I don't know if they require some form of proof that you have the resources (not including any loan) to complete the MBA. Can someone confirm?

To add my 2 cents to the loan discussion.

HBS has a very simple way of assessing your ‘capacity to pay’. It asks you to state your last 3 years income statement… then adds it all up and divides by 10.

This amount is assumed to be your savings.

Except this core amount, which you are expected to pay, as an international candidate you are eligible for:

Fellowship (free) + Citibank Loan (prime-0.125%, interest calculations starts immediately) + HBS Subsidized loan (prime-0.125%, interest calculations starts after you leave school)

This is inclusive of your cost of living.

HBS does not believe in a co-signer as

a. It believes it is discriminatory towards International candidate’s
b. Your word is your bond

In the rare circumstance that you have been unable to save 10% of last 3 year earnings, you can explain this to the administration and you would be eligible for further loan’s.

Repayments:

If you are (like me) India bound, and/or have ambitions of working in a non for profit role/low wages (entrepreneurship? Ask apna PG or ME hehe we work for peanuts ) and believe that you would be unable to pay back the EMI's...

HBS has a loan forgiveness program where HBS pays off CitiBank your monthly installments while you go out and save the World and win the next Nobel prize for peace.

I usually do not visit PG outside my core thread, so if you have questions on this, the HBS 2007 thread is the perfect place to engage me on this

Best,

CY

[bancsy_me]

Originally Posted by nagpalkunal

Allow me to add my two cents in this discussion.
Anand, Darden still has loan without co-signor. The law that was passed has reduced the subsidy given to private lenders like national etc. which has then prompted them to reduce or rescind on their commitments to the educational loans. the direct impact is on US citizens and green card holders who are well, sub prime.

(There has also been some major fines including on Sallie Mae, Citibank and others who were the "preferred lenders" because they were being favored for by the financial aid office of certain schools.)


Ok, back to the original discussion. Admittedly though, Sallie Mae which till now used to give loans to internationals albeit at a pretty high rate will not in all probabilities continue to do so. It already has stopped for a lot of US nationals/PRs.

However, and this is a big relief, Citiassist loan still exists for all internationals at top schools like "Darden".


So there. just to clarify certain issues.

Cheers

Thanks for the info. It's nice to know that financial constraints alone still do not disqualify one from getting into a top MBA school.