Did we mention that business school is expensive?
Not just the six-figure tuition. Yeah, you need to look carefully at that, but most people take out loans. MBAs tend to be safe bets for lenders and there are more and more private lending options these days. Once you get in, you’ll need to figure out how to pay for it, but most people are able to pull that together.
That’s not what we’re talking about today, though.
Some people do in fact get help with their costs of education, even up to a full-ride scholarship, though those are pretty rare (they’re completely non-existent at many schools including MIT and HBS just to name a couple). It’s generally something like 50% of students get some form of free money at most schools, but the average amount awarded tends to be fairly low. Maybe up to like $10,000 a year or something. Certainly helpful but not taking you all the way.
The bigger issue is that business school is expensive.
Meaning, it’s not just paying the tuition. That just gets you in a seat in the classroom. There’s also all sorts of other costs like books (yes many professors still assign books) and cases (you need to buy the cases that you’ll be studying) and club dues (you said in your essays that you plan on joining five clubs, did you think that was free?) and treks (ditto; not free). And then oh yeah you have to like eat and stuff. Pay rent. Possibly the most rent you’ve ever paid in your life, if you’re looking at a school in the Bay Area or New York City or Boston.
On top of that, you want to have a life, which means different things to different people but unavoidably will involve at least a few happy hours and social events with your fellow students. If you end up going to school in a big city then you’re going to want to take advantage of that opportunity and DO STUFF.
It all adds up.
Here’s an article about the experiences of some lower-income college students who have faced exactly these issues.
Your experience will be different – you are going to be a grad student after all, and so much wiser than those kids in college – but the pressures will be the same. And, of course, you must remember that all of this will be hitting at a time when you’re, like, oh yeah: NOT WORKING. There will be no income coming in for months at a time. That alone could be a real shock to the system. Many of you have been out of college for a number of years and have managed to get your salaries up to a healthy level already. If you’re already pulling in six figures per year then to yank that away cold turkey is not going to be an easy transition.
Which brings us back to the headline for today’s post:
If you’re thinking of applying to bschool this season, to join up for the Class of 2019 next fall, then we encourage you to think of the finances early.
Put away some of that income you’re getting.
Even if you’re not at the six-figure level now (and we do recognize that many of you aren’t) then you still want to find a way to squirrel away some dollars every pay period. It may feel like a squeeze today but we assure you, it’s MUCH easier to deal with that now when you have more income coming in again at another paycheck in two weeks. Set up a system where the money is automatically transferred into a savings account. You can start small – maybe $50 every time you get paid – but once you get used to that level, consider increasing it again, in like July.
Every dollar you sock away now will be so much more valuable to you later.
The MBA tends to have a very attractive ROI. It’s a wise investment on so many levels. However, those returns do not come for some time. Make practical plans for your future and implement them now, and you will thank yourself later.