Need some general advice on financing my MBA. I’m certain that some of you guys know exactly how to go about this.
I got two options for my MBA:
Cut a big check. I could do it. But I like the idea of having a nice cash cushion to last me which will be reduced significantly if I pay for it all myself.
Debt Financing it. Sounds like a good idea.
I’m a US citizen, but don’t reside in the US and I have pretty much no credit history as a result. I do have parents with perfect credit scores who could co-sign.
So, what should I do? I naturally assumed the government might be the best place to go first. But from what I see on their website the interest rates are actually kind of high. (I have no federal loan history)
The MBA programs to which I have been accepted have loans specific to their schools that they have worked out with local (european banks). I kind of expect the EURO to underperform and inflate so I’m thinking that wouldn’t be a bad option either.
I’d appreciate any high level advice or specific advice you guys have. I’m a rank amateur when it comes to this sort of thing.
Any way you could secure any part of the obligation with part of your cash pile in CDs or such? That is normally a very valuable credit enhancement for a bank.
You should look into whether any of your programs have research assistantships that you can apply for. In addition to paying all or some of your tuition, it will give you a valuable differentiator for your MBA. You could help out a professor with research, and maybe even get credit or mention in a published work. It would also enable you to go a lot deeper into a specific research topic so that you are not so much of a “spectator” as many MBA students that shuffle through these programs tend to be.
If you don’t have this option, I would recommend using mostly cash to finance. Student debt is the absolute worst thing hanging over your head. Use cash and just live lean during your MBA stint, my man. Trust me on this.
^ This will probably piss off a bunch of you. My parents have offered to pay for the whole thing and my brother has offered to lend me the money interest free. However, I don’t want to take their money. If I wanted to take that route, I’d be living a much different life than the one I currently live. #richwhiteboyproblems
Consider that inter-generational gifts are tax free if it’s used to directly finance education. Otherwise, the US is just going to take it out of your parents’ eventual estate.
I don’t know about the Euro-specific loans that your school has worked out, but if the rates are low, you should take the loans even if you have the money.