Friday, December 02, 2005

Financing your MBA - Exhaustively Updated 12/03/2005 - Added INS/Visa Info

1 Northwestern
2 Chicago
3 Pennsylvania
4 Stanford
5 Harvard
6 Michigan
7 Cornell
8 Columbia
10 Dartmouth
11 Duke
12 Virginia
13 NYU
15 Carnegie Mellon
16 UNC Chapel-Hill
17 UC Berkeley
18 Indiana
19 Texas - Austin
20 Emory

There are 3 ranking systems that are more popular than others. Wall Street Journal and US News are the other two entities that pepare B School Rankings. I sort of listed BW rankings here because WSJ lists Michigan at #2 and I didnt want to sound biased. US News Lists Michigan at #10. My point was to throw out names of 20 schools and discuss financial aid possibilities.

If you register with BW and follow the link of each college you'll probably see the annual costs per each college. Yes! its not cheap. So on an average you should expect to cough up more than $100,000. This is actually a good entry barrier for (a) Smart students who have money but want to hold on to their money (b) Smart students who feel they can't do MBA because they don't have money and (c) Smart students who don't want to do an MBA. That these categories of people stay away - actually works in favor of students like me who are of average smartness and don't have any money to start with. Their absence really make our competition slightly better. On behalf of this category, I thank those who preferred to stay in their cubicles. Anyway to end the digression - I feel the whole MBA process is more suited for risk loving category folks and risk neutral folks who are totally frustrated with their current jobs.

Do all people who do MBA have that kind of money?

Bloody NO dude! If people had that kind of money they'd be sitting near a pump set in a village watching test matches and living on interest.

Is there financial assitantship (RA/TA/GA) available for MBA students?

Negligible. Very few people get funding. The program is not built that way. Infact if you had a GA you'd probably resign if you want to keep pace. The situation improves slightly in the second year but not by much.

So How do you penniless folks manage to fund yourself?

In the ranking listed above - the top 13 programs and #17 have guranteed loan programs (if i excluded or included a school by mistake - its only because I didn't know better). For example Michigan has a partnership with CitiBank where every incoming MBA student is provided a loan that covers tuition and living expenses for both years. I think Wharton provide the loan themselves. So bottomline: Most of the top-ranked schools have some sort of a loan program that pays for your tuition and living expenses. Many of these loans offer the flexibility to pay back the loan in 35 years.

Why do they do this? Whats the trust involved?

I don't know. Maybe NPV of doing an MBA has a positive value and a payback period of 6 years (note the usage of jargon). Who knows? People seem to somehow pay it off which is why they seem to continue providing the loan. Its not your father's money, so why the hell do you care? If you can't pay it back - I am sure they will take all the money - that you didn't have to start with in any case - and pay back the loan.

Do MBAs get jobs that pays back loans?

So if you look at the ranking link above - you will see recruitment related statistics. Looks like people are getting jobs and paying it back. Yes! Not all get the super IB/MC kind of jobs. Some (5-6%) graduate without jobs. But they eventually get a job. After they get a job they payback the loan. It also appears that as the ranking goes higher - you stand a better chance of paying it back. I didnt mean it in a way that school #8 is better ranked than #9 (actually they are.. but they aren't...well u get the point). Small deltas in ranks aren't much in terms of getting a job - but schools are kinda perceived in levels and if you are in a top-tier school - you should be okay.

As a bonus info - a miniscule amount of firms do pay your second year fee if they offer you a full-time job after an internship. So there is that too.
How do I show funding for visa as an International Student?
If you get into a good school - Both for M.S and MBA - The visa process is fairly simplyfied. You'll get through with very little questions asked. In general the visa is more dependent on school, scores, acads than actual finances. The school will anyway put the banks name as source of loan based funding in the I-20 if you want it to.
I am married. Can I do MBA? Can I fund myself?
As crazy as it sounds many married people do MBA. Infact 20 of the 30 desis in my batch are married. Yes! we all have been asked questions like "are you crazy?" (Apparently we are). Almost all the spouses have been asked (in many different ways) if they were "aware" of their husbands MBA plans. After being interrogated (by various strangers) if their husbands cheated them and tricked them into the MBA deal, they have all got the sympathetic looks indicating "poor girl- she doesnt know what she got into - its student life". If you are married and decide to do an MBA you will go through this. Apparently most of the general public assume spouses have no brains, can't think on their own, have no relatives who know stuff and have no personality. In fact the spouses get together and joke about it too. There are some husband-wife MBA pairs too. About 50% of the MBAs in my batch are married. So yes! you do MBA if you are married and yes! the loan amount will cover it. Among the desi MBA batch starting this Fall about 10 students got married between Feb-July :-)

Does the TOP 10-20 Bschools require a Collateral or US Cosigner for the loan?

Most of the schools listed above don't require a collatral or US co-signer. I think Texas-Austin does require one. But Texas-Austin is only half as expensive as any other B School. Bottomline - For most schools an admission by itself gurantees loan for both international and domestic students. Please check with individual schools on this but you can be reasonable sure about #1-#13 and #17. The others should have a similar program.

Whats the interest rate of the loan?

Okay Finance is not my domain (although I am boasting for the last 1 week that I did better in my finance exam than those finance specialists. I apologize but I am so proud of underdog-wins kind of situations) They have something called "premium rates". I am told that among the interest rates available "premium rates" is the best possible interest rate. So I know that the rates are competitive. More importantly - I stopped asking questions when I knew this was my only option (same goes for student health insurance too) Just take it. It should be fine

What happens to the loan if the Student's soul separates from his body and decides to live elsewhere ?

No sort of collatral was asked. The guarantor is the school and not my parents. So I suppose nobody (except the school) will be held accountable if my antaryaami shifts residence.

Can the spouse work if she is on F-2 student dependent visa?

No she can't. And getting a job is difficult. very difficult. But it is better than searching for a US based job from India.

Can the student do internship? Does he/she need an OPT to do it?

Almost all students do an internship. International students can do internship. They do it as CPT (Curricular Practical Training) as opposed to OPT (Optional Practical Training). You dont do internship in OPT. You dont even want to try it.

Can students who have used the OPT for previous Masters get another OPT?

OPT is a 12 month buffer to transition from F-1(student) Visa to H1B (work) visa. It is available for 12 months only. If issued for 12 months, the 12 months is considered to have expired even if you did not use the OPT for the entire 12 months. You are eligible for another OPT if you have been out of US (and never entered it) for 1 full year. The H1B also gets reset to a fresh 6 year period in this case.

I did Masters. Converted to H1B. Spent 3 years in H1B and want to do MBA. Can I do that?

You may not be eligible for OPT (see above). If so - You may work out a premium H1B processing (1 month processing) with your company. That seems to be a workable option given that US based Masters degree holders have a separate H1B quota. Apart from the fact that you have a serious race against time in the Green Card domain this should be okay. To start studying - You just have to do a I 535 - H1B-to-F1 change of status application. You need change of status approval (2-4 months) to work in campus. You just need acknowledgement to enroll in courses (2-3 weeks).

How about employment for International students?

A significant chunk of firms require GC/Citizenship. It is sometimes frustrating to watch a firm leave with open interview slots, you like the firm but cant interview there. Some really neat jobs are also out of reach. Having said that, visa status only prevents the job scene from being easier than what it is right now. It does not make getting a job impossible. Almost all international students get jobs. If its not their #1 choice, its motsly because they couldn't beat the compatition and not because of visa issues. If you are coming to US for Marketing General Management, Rotational Program kind of jobs - you stand almost NO CHANCE as a international student. IBM, Intel, HP and many Hi-Tech firms DO NOT sponsor visas for MBA kind of jobs.

Will the loan amount cover travel, entertainment and miscelanious costs?

You cant really be be revelling in alcohol and flying away to Bahamas every long weekend if thats what you are asking. You may be able to watch a movie every week and probably fly to New York or Valley for recuiting events (You certainly have to). You can live in a normal apartment, sleep in bed, watch TV, listen to music, cook food, eat in plates, wear shoes, tie laces etc. The money is not a lot but it does cover the essential stuff and a little bit more.

Bottomline: There are N thousand uncertainities and hurdles. Take that as a given. Essentially if you are doing the same mistake I did, which is base you decision on the answer to - "what is the gurantee that i will get a job and will pay my loan". There is no guarantee. None whatsoever. Like Gandalf said " even the wise cannot see all ends". You may not get a job at the end of the degree. Regardless of your thoughts on who deserves/does not deserve to get a job - only those who get the job will get the job :-) If you dont get a job, the road is just a little longer for you. The statistics of that happening is low but it is real and there. So you do run a risk. The question is are you willing to ride the risk? If the answer is yes then all the above questions will begin to have answers. Otherwise they will just be reasons as to why you chose not to do it.


monk.and.monkey said...


Really Happy to find a post from u on the same topic :)

Regarding the Loan, does the TOP 10 bschools require a Collateral or US Cosigner?. And if by some chance, the graduate got disabled in some accident or deceased, then the loan payment responsibilty will fall into whose head???
Sorry to ask such a question (may be it is a very dumb question), but one shud also consider all the possibilities. One shud not do an MBA taking up a loan, and his parents end up paying it :(
Happy to hear that some loans have a "35 year" pay back period. Also i came across the concept of "My Rich Uncle". How good is that one???

Once again, Thanks for this post.

- Murali

Anush said...

Hey Bharath - how do you manage the general expenses, I mean the misc expenses like: domestic travel for yourself and spouse to meet family/friends, entertainment, india travel, etc? Does the 100K amount account for all these as well? I am assuming not. What are the typical interest rates for the loans? Are there any pre payment penalties? And in your case - assuming that you don't have permanent residency, how does that limit your job options and flexibility?

Ekta said...

Hey Bharat,
Good to see that info like this is no longer restricted to specific sites and that people like you are taking the effort to share the same to help others!

Have done an MBA myself from India and hence know how it can be just to put together basic information like this!

Hawkeye said...

comments questions answered in main blog page.

Anonymous said...


If you can make it one of these 20 , i doubt there will be little possibility that u cannot clear your debts.

As bharath has already mentioned in his previous posts , the institutes look at various aspects of the application and most of the times their focus will be how to market your abilities to the best use of the institution. although i said it bluntly , this is what i got from one of the ladies from university of boston whom i have met in a TopMBa seminar from top universities in the world.

She straight forwardly told me ... if you have numbers we have numbers for you.

means.... if you have good gmat score and good academic credentials we have scholarships and other support for you...

as i understand with my interaction with many MBA students from SP Jain , IIM's .... most institutes before taking you in ... will try to evaluate , if you can do well in the career fairs being conducted in their colleges.

Because the more the people get selcted in the career fairs the more popular the college is.

I Hope i am clear..

for any specific questions on guidance feel free to mail me at


Senthil said...

hey Bharath,
thanx for the info on finance.
but what shud one do when the univ asks for financial statements ??
I certainly don't have that kind of money in my bank accounts :-)

Hawkeye said...

/*if you have good gmat score and good academic credentials */

these carry very limited value in u marketing urself to companies while interviewing. so they carry limited (not negligible) value for you to be appealing to the school.

I agree with te part where u said if the school thinks u will get a job then the school will take u.

Hawkeye said...


u only need to scrape up money for a financial statement for 1st year fees.

again if u are ok with bank loan on ur I20, even that may not be required.

Anonymous said...

Agreed as far as the companies interviews are concerned. But when colleges dont know anything about you , the first thing they see is your scores. However matured they are not to get carried away by the scores i think the first impressions are the best impressions.

Again to contradict my statement above i have come across
some schools which conduct interview first and then they will ask you to submit your application. what is this all about. i dont rememeber the school name now , but i will get back to you with that tomorrow. they have clearly mentioned in their application that the first thing i need is to schedule an interview with them and then the GMAT score and then all the other paper work.

is this the same case with Michigan or any other school u have attended interview of ?

HAve u come across EMORY's brochure ? their way of starting the course with sky diving is very interesting !!!!


Anu said...

A very informative post. Keep up the good work.


Anush said...

Regarding the comment on OPT: Don't we get only one OPT for one Masters? If you already hold a Masters degree from the U.S. and have used up a part of the OPT, I'm pretty sure you won't get another OPT for MBA. What I am not sure about is whether your OPT clock will be reset if you stay outside for one year and come back for your 2nd masters. Couldn't find info on this from

Could you point out an immigration website or something where this is mentioned?

Thanks for the responses in the blog.

Anonymous said...

Hi - Been a frequent guest, never a commenter. :)
I do have one question regarding this post.
You said that general mgmt, marketing, etc don't offer much scope for jobs & hi-tech cos don't often offer sponsorships.
So what are the areas in which MBA's can look forward to an opening or two? I do realize there are no guarantees.
Also, what do u think about an MIS degree? What is that worth? Just curious.

BTW, nice work on your blog here.


Anonymous said...


Thanks again for yet another informative post....

Like the previous commenter, I was also curious about your statement,
If you are coming to US for Marketing General Management, Rotational Program kind of jobs - you stand almost NO CHANCE as a international student. IBM, Intel, HP and many Hi-Tech firms DO NOT sponsor visas for MBA kind of jobs.

What other specializations are 'suited' for the typical Indian profile? Or just about for anyone.. umm... I think what I am really trying to ask is what are the options as far as specializations go and how does one go about choosing specializations?

Also, how much of an increase in salaries can one expect, post-MBA? Assuming one is in a typical '2 years post-MS' position of around 80-90K a year? Would the jump in pay justify the time and money spent on the MBA? (Sorry, it probably does... there wouldnt be any other reasons that all of us go in for the MBA, but would like to hear it in your words and perspective)

Also, as far as jobseekers post-MBA go, will our (probably irrelevant or not-so-relevant) prior work experience hold good? like techie experience for a strategy job after an MBA???

I might sound pretty confused, because I am pretty confused about a lot of things... but, I do want to reiterate that your blog is a great help in clearing many questions I have had in my mind... thanks a lot for the wonderful job!!!

ranju said...

Hey Bharath Ram
Cool Blog man:) I was in need for some MBA related advice. Lots of it here. In case you are wondering who this is, its ranjit ur buddy at SBOA. Hows Boxer Babu doing? Anyways... i am sure i will have some more questions and will read your posts regularly.
If you are the Bay Area anytime, do visit!



snax said...

Hi Bharat,
Nice post, thanks! I have been reading your blog for a while now.

I couldnt agree with you more; I too thank all those brilliant people who choose to contain themselves in their cubicles ;)

BTW, Emory too has loans without requiring a US co-signer.

monk.and.monkey said...


Take a look at this.

I'm not posting this to scare any one around or to list this as one more factor against foreign MBA. But Bharath i would like to know ur take on this and how far about this is true.


Hawkeye said...


ur link just led to a blank page..but here is somethin i found there

Hawkeye said...

here's somne prt-time vs fulltime

monk.and.monkey said...
This comment has been removed by a blog administrator.
monk.and.monkey said...


Sorry to have troubled u with a link to blank page...still i wonder where the original link vanished :)

Anyway it is here now

It is about the "over-discussed" topic of job prospects for internationals after MBA.

Anonymous said...

I have taken the GRE 3 times to this date. Getting a remarkable total score of a 780!
Which may I add is horrifically low. Everytime I take it I learn something fantastically new.

For Example today I bravely asked about the phantom like section #5 aka the "experimental section, "does it count to my score?" The response I got was, "it could if they want it to, or if you don't take it you may lose points". Is this section the reason why my scores are screwed everytime...

I have spent over 150 hours in test prep for this test, and everytime I take it, it seems more and more like a inconsistent bullshit trap. ETS, you must be so proud to have robbed the students with thier eyes open . Bravo!

I am taking it for the 4th time, because they have pissed me off that much. I am sure that there are a million other pre grad students who have fallen into the ETS trap, they know you need them, they know your going to take it again, they are happy and filthy rich, while the students struggle.

So if anyone knows the tricks they have up thier sleeve or would like to dispute that the test is really of honest value please comeforth. Otherwise, you can say I warned you.

Rhea (SVA, advertising) NY.

Muthu Pugal said...

Good post!

Right time to read about this for me. I was wondering about the co-signee situation...

You make a valuable point about the entry barrier... similar to a market barrier...

Being a poor indian, the saying goes,

If you aint got nothin to loose, you aint loosing nothin

RK said...

not sure if you still reply to comments here ;)

i am doing MBA and am doing internship (working in a company away from school) and I got OPT permission. You said, you never do internship in OPT, could you clarify. There was some reason why it was not CPT, but I dont remember now.

Hawkeye said...

why did they say no CPT. applying and gettin an OPT for 3 months is a painful process and they you have to apply again and prove that OPT was only issued for 3 months.

are you sure the OPT duration ISSUED was only 3 months?