Wednesday, May 18, 2011

Assuming MBA = student loans

I feel like there's a pervasive assumption that anyone getting a top notch professional degree is going into debt to do so. Of course this is not unfounded.  There are dozens of stories in the media about how law, business, and medical school students are graduating with back breaking debt and many of them don't even have jobs.

But I also know that there are plenty of people out there not paying a dime for their degrees.  There are students in MD-PhD programs whose whole educations are being paid for through research funding.  There are also plenty of business school students, full time and part time whose companies are picking up the tab for their degrees.  These tracks are not at all uncommon and result in degrees and zero student loans.

Less prevalent, but still common, are students who pay for their whole degree in cash either from their own pockets or their family's. Like the sponsored students, these cash heavy folks will never even fill out a financial aid form.

Finally, there at least used to be the model of working your way through school.  With the huge price tags now associated with just one year's tuition at a good school this may not be possible without scholarships and grants - merit or need-based.  After all, it's pretty hard to earn $50,000 after tax plus living expenses while a full time student.  But many schools have generous scholarships and financial aid so it appears possible to potentially still graduate without debt. At least I hope so given this is my path of choice.

With these routes to a debt-free degree available it irks me that most discussions of these degrees presume student loans that will be nearly impossible to shake and a ten-year payback period with no mention of an alternative.  Yes, these degrees are very expensive and targeted mostly at people in their 20s who haven't had a chance to accumulate as many resources, but assuming six figures of debt for every graduate is almost a self-fulfilling prophecy.

What do you think? Am I way off base here?

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4 comments:

  1. I took the research assistantship route to my degree and graduated without any debt (with $5000 in bank saved from my stipend). For MBA, I would like to do a part time MBA and that is proving to be expensive. But, this time I am trying a different route - I am planning to move to a company that will pay for my MBA.

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  2. I was fortunate - my company picked up the tab for my part time MBA. I would not have been able to pursue it otherwise - I was not prepared to borrow that much money when I already had a decent career in accounting.

    I did work my way through my undergraduate degree (back in the early 90s when tuition was crazy low compared to now); a combination of scholarships, a gift from my grandmother, and restaurant work allowed me to graduate debt free.

    I'm now saving money to help my three kids when it is their turn, but they all know they will have to work to help pay the bills.

    I believe if you are creative, you can manage to get your degree with no debt (or in the worst case, very little).

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  4. Hi, I love your outstanding blog. Actually, student loan payments do not have to be repaid until 180 days after you leave or graduate from school. The federal government offers flexible repayment plans that can fit your budget. You can even consolidate your federal loans into one, low repayment plan. I think it's may be helpful for a poor student to carry on study. thanks all! @Lisa R.

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