For better or worse, I went to a private college for my MBA. I really enjoyed it and met great people, but it was definitely pricey. Now there are mini MBAs and while I would do it again, maybe I’d attend a public school. Bottom line: it cost me roughly $80K, though clearly not all out of pocket.
I pursued an MBA because I was a career changer. I moved back to Boston, from NYC, at 32 after leaving the media and journalism industry. I was living alone in a 1-bedroom apartment after crashing with my parents for many months.
I could have pursued a management master’s that would have been nearly free but I wanted an accredited MBA program with access to an entrepreneurship case competition. I ended up spending about three years in a part-time evening MBA program and paid for it a number of ways. Here’s how I did it, but disclaimer: this isn’t for everyone. You have to be disciplined with credit cards and understand your monthly cash flow.
My first semester I accepted the full amount FAFSA offered. I was lucky to have my family pay for my college tuition so I wasn’t versed in the financial aid process. Once I saw that it was ~$10K for just the first semester I emailed the financial aid office immediately. I told them I only wanted 50% of the aid available to me and that I would figure out how to pay the rest.
What resulted was a plan that mixed Sallie Mae, 0% interest credit cards, and employer tuition assistance programs.
- Credit Cards. For every semester after my second, I would use 0% interest offer credit cards to pay off 50% of each semester’s tuition.
- I would only take credit cards who offered me 12-24 months at a 0% interest rate, preferably 18-24 months.
- I would pay as much as I could each month and as soon as I paid each tuition bill, I’d submit it to my employer’s tuition assistance program.
- I paid no credit card interest on my tuition payments.
- Employer Tuition Assistance Programs
- The reimbursement program offered $5,250 annually.
- My former employer also offered an additional tuition assistance program that was not guaranteed.
- Ultimately I received at least $20K from my employer. I opted to take longer than my peers to maximize the benefits.
- Family Support
- I unexpectedly received some funds after graduation, which my parents had put aside for higher education. I threw this at my Sallie Mae balance(s). It was less than 20% of the cost of my MBA.
- Monthly Budget
- After graduating, I prioritized debt payoff. Why? Because after my first semester, every loan was unsubsidized, at 6.8% interest. That was on the line for me. While much lower than credit card rates, it wasn’t the 2-3% interest rate I’d heard people talk about. In addition, I had applied for scholarships and grants but not many exist for MBA applicants because the assumption is you’ll graduate and make good money.
Eventually I met my now husband and moved in with him. Given that we met later in life, we were DINK (Double Income No Kids) for about three years. During that period, his mortgage was the same as my previous rent. We were able to save a lot my living together while also both earning six figures.
I prioritized paying off my student loans because I knew we wanted kids eventually. Babies are expensive! I did that while keeping a car loan because it was only a three-year loan with 0.9% interest. Ultimately I paid off over $40K in student loan debt out of my earnings.
I was able to pay off my loans before I had kids, which ended up becoming a two-year journey to motherhood. That’s another story, with some details here (READ: infertility, baby prep and the financial implications of parenthood).
The point of this story is, higher education is tempting, but one has to question the R0I on a Master’s or PhD before jumping in. Run the numbers and figure out 1) the minimum debt payment with your expected loans, and 2) your expected earnings for a post-grad job. Also why are you pursuing it? Do you want it or are you being pressured? Is it necessary? I have family members who make more than me and my husband and never got a Master’s, which we both have. They chose a career in a popular business field, are good at what they do, and have stayed consistent on their path.
I don’t think degrees guarantee anything. But I am glad I pursued my MBA and challenged myself. Do your due diligence and in the words of my father, make a Pros and Cons list!