5 case studies that prove that paying back a US MBA loan is the easiest thing in the world


education-loanJamboree has been helping bright, motivated young professionals get into the Business Schools of their dreams for decades, and we have solved many questions and doubts over that time period, some of them recurring. One of the most common questions that we still hear multiple times a day is this: What is the best way to fund a good MBA abroad? Will the $200K price tag be a problem? Is it actually worth it?

Our answer is always the same – a top global MBA is a transformative experience: both for you as a professional and for your career. You should make any investment necessary to acquire this degree, given that the returns on your investment – from a career, satisfaction or network point of view – are so attractive. From any viewpoint – purely economic or holistic – the RoI of an MBA abroad is unquestionably high.

However, we are often asked to make this more ‘real’ for our own students, to give them examples to further strengthen their conviction that a good global MBA is worth the investment. We share multiple detailed stories of our own alumni, and even put them in touch so that they can have all their questions answered.

For the first time in our Jamboree In Depth Series, we are making some of these inspirational stories available to you, our valued readers. These five case studies are very different, and all of them aim to give you an idea of the sheer breadth of the options available, and the flexibility of those options, when it comes to paying back your MBA education loan.

For Shweta (name changed) paying back a US MBA loan was a 15 year, low cost, low worry affair

We just talked about pay back flexibility – Shweta’s is a classic case of just how easy and stress free it can be to fulfill the terms of an MBA loan. Post her MBA from an Ivy League Business School, Shweta tried out multiple careers to find where her true talents lay, and took a few years off to start a family. For her, the pay back period was essentially elongated, due to the relaxed terms of borrowing that she had access to, as a student of her School. After making the relatively small payment per year, she still had plenty left over to invest, to use for family purposes, or to spend on luxuries. She scarcely even noticed that the loan was there!

The key lesson from this case study is that the terms of your loan will not be a problem. Even if the amount might look large, you will always have access to fair payment conditions, that give you the freedom to live your life and plan your professional career at exactly the pace that you think is best for yourself. Think of it – where else do you have access to a 15 year education loan?

For Varun (name changed), a determined effort saw a loan pay back period of less than 4 years! 

Varun’s is a case that was almost the polar opposite of Shweta’s. Varun did not want even the remote prospect of a loan – even one as benign as the typical US Business School loan – hanging over his head; he planned to pay it back as quickly as possible. Again, the infrastructure at his university – in this case, the placement system – helped him; he was able to secure a job in a private equity giant, levelling up from his small, boutique PE experience pre MBA. With a large base salary and huge, performance linked annual bonuses, he was quickly able to earn enough to pay back the loan in record time, without having to compromise on quality of life at all.

The learning from Varun’s case is, paradoxically, the same as in the first case – that the system has huge flexibility. For every person who wants to take more than a decade to pay back their loan on their own terms, there might be someone who wants to do it quickly, and move on to the next stage of their lives. Every Business School provides its graduates multiple opportunities to earn big money – whether it is through a consistently high median batch salary, or super high paying sectors like hedge funds and private equity, or through encouraging entrepreneurship and a big, VC fuelled exit. You can pay back quickly or slowly; your Business School will always be with you.

For Tina (name changed), a large part of the initial loan was forgiven by the Business School and the bank acting in accord, given her entry intothe non profit sector

Now that we have looked closely at a high paying sector, it’s time to do the exact opposite, and examine a career path where a large part of impact is measured in social welfare. Every year, hundreds of students from the most elite Business Schools in the world decide to enter the social impact sector, and assume leadership positions in non profits. They are paid well abroad – in contrast to some non funded positions in India – but the scale of their remuneration cannot compare with that of their classmates in the for profit sector – definitely not in the growth stage of their careers, in any case.

Hence, a large number of Business Schools help these students financially, in a move that reaffirms the fact that these institutions stand for capitalism with a conscience, rather than the blind pursuit of profit at any cost. The help takes many forms – some Schools actively institute scholarships with the help of alumni or endowments, some Schools work with loan banks to forgive a certain part of the tuition fee loan, and yet others help with the scale of their networks, and bring in corporate or foundation donors who will sponsor some part of the MBA degree.

This is remarkable, because it (along with the previous two case studies) shows that money is just not a factor when deciding whether to do a big name MBA abroad or not. If you can pay back a $200K loan quickly, slowly, or not at all (to a large extent, and in certain very specific cases) then nothing can stop you from doing anything that you want to; you are free to take over the world in whichever way you choose. At the entry level, you get scholarships and tuition fee waivers if you have worked in a country where the exchange rate means that your dollar savings are lower; as you exit your Business School degree, you could well get another scholarship to pursue your passion of impacting society positively!

For Bhakti (name changed), a two year bond with her pre-MBA employer saw her essentially get an MBA worth $200,000 for free

If you are already overwhelmed with the immense range of options before someone who is looking to pay off an MBA loan, you haven’t seen anything yet! Bhakti was a beneficiary of the reasonably common Sponsor MBA scheme, which many professional firms adopt to retain their young, driven talent who have not yet completed an MBA.

In many management consulting and VC firms, it is common for foreign offices (and some Indian offices) to reward exceptional performers with an offer of partial or complete sponsorship of MBA tuition fees; some offers even include cost of living. This generous offer is, of course, conditional on the person returning to that organization post MBA, and completing a minimum number of years (it usually varies between 1.5 and 4). This is a great option for anyone to have before they head to Business School; it makes it a lot easier to compare offers when you have an exact dollar value for how much you stand to gain from each.

The lesson from Bhakti’s case is that you should always be aware that up to 10% of any Business School cohort might be sponsored candidates, and that you can choose to enter one of these professional streams pre MBA so as to give yourself a chance of the sponsorship option. In addition, management consulting and VC firms are just the agile first movers in the MBA sponsorship space; it is a sound business investment for any kind of company to create a similar program for any of its young high achievers. You can talk to your HR about this at your place of work, even if there is no formal policy; once they have seen retention and return rates at places which have similar policies, you might well be able to start a trend in your office.

For Irfan (name changed), an opportunity in the family business allowed him to reduce his salary post MBA for a few years, in return for full MBA sponsorship

This option is closely allied to the previous one – of having an employer bear the costs of your MBA – to a small or large extent. Of course, in a large corporate, the rules will be fixed to some extent, you will not have too much leeway.

In Irfan’s case, being an important part of a family business meant that he could tailor funding options to his convenience; he was able to pay for a large proportion of his MBA through his potential salary or stock options that he would have earned on his return to the family trade, post an MBA. This worked out perfectly for him, because there was no two year bond or long term economic implication; he was able to do that which was best for his career plan, just like the others in this case study series.

We have included Irfan’s example in this set to further illustrate that determination to find a way to fund a foreign MBA will always ensure success. At the outset, the Business School infrastructure ensures that you have many, many loan pay back options and the most lenient of conditions; in addition, if you explore all possible avenues, you are guaranteed to find something that works well for you.

We have covered the top 5 ways to sponsor your MBA or pay back your loan on your own terms, but this is only the beginning: the many other case studies to which our full time students have access tell them about full sponsorship of an MBA abroad through exclusive scholarships, additional ways to slash fees payable, and so on. If you would like to have access to all our accumulated wisdom on the foreign MBA, or on how to get there, or on how to manage everything once you get in, do get in touch!

You can easily book a session with our GMAT and Business School application experts and coaches at any of our centres; they will be happy to help you in any way, whether it deals with suggesting that program of ours which is best suited for your needs, or giving you a flavour of what life is actually like in one of the elite B-Schools of the world, or just helping you think through all your career options in a rational way, and helping you decide what is best for you. All the best!

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