It is important to understand that most universities do not offer financial assistance to international students for a program like MBA. The few who manage tuition waivers and assistantships usually get it after they reach the university and usually after a semester.
It still makes sense to take a loan. This is because the kind of jobs that you would get on completion of the MBA program, you should manage to pay back your loans within a year or two.
A typical loan required for an MBA program in a mid tier university in US would be about Rs. 20 – 25 lakhs. (Many banks offer education loans).
On completion of an MBA, you would typically get a job with an average salary of say US $ 75,000 per annum (This could vary depending on how you perform in your program and job interviews). Remember, you have to perform well in your program to get jobs.
After taxes and expenses, you could easily save about US $ 10,000-15,000 or more a year. This means you can pay back your loans in about two years. Imagine, trying to earn this kind of money anywhere in the world in such a short time. That’s USA for you.
Coming back to the types of financial aid, we have:
|Sources of funds||Amount||Rate of Interest||Advantages||Disadvantages|
|Bank Loans||US $ 10,000||16-18%||Repayment after completion of course||Requires security like property/assets|
|(In home country)||– US $ 30,000|
|University Funding||Part or complete tuition fees||–||No repayment||Depending on funding type, you may have to work for upto 20 hours a week.|
|Loans & Aid from Other Sources (U.S.)||Complete tuition fees & expenses||Approx. 8 %||Low interest rates,||Requires a Co-signor, who is U.S. resident/Green card holder|
|Easy repayment terms|
|Scholarships in home country||Varies||–||No repayment||Very few available, tough competition|
|Scholarships in U.S.||Varies||–||No repayment||Very few available, tough competition|
This is perhaps the simplest option of all. The university presents an official estimate of study and living expenses, and you get a letter or affidavit from your parents or a rich relative, in which they declare their income and support for your studies. This is satisfactory for both the university and the visa authorities.
This kind of funding is usually the most common. Unfortunately, most of the university funding is for research based and science programs and not for the MBA programs. The different types of financial help available:
Types of Assistance
Merit based assistance is awarded in many forms, from tuition waivers, various types of assistantships, to fellowships. The most common are listed here :
- Tuition Waiver: This means that the student does not have to pay the tuition fees at the university. However, general fees (for the use of university facilities like the library, computers, and sports and health services) usually have to be borne by the student. A tuition waiver is frequently awarded in conjunction with a scholarship or teaching/research assistantship.
- Scholarship / Fellowship: This is usually an outright grant based on the student’s academic ability and performance. Hence, Only a truly outstanding student may be considered for this type of award, before enrolling at the university. A full scholarship would pay for a student’s entire living expenses at that university, whereas a partial scholarship would require additional funds from the student. These awards are few and very competitive.
- Assistantship: Most students who receive assistance usually do so in the form of an assistantship, i.e. a cash stipend sufficient for their living expenses, and/or tuition waiver. To get this, they have to work for a maximum of 20 hours per week. This work normally consists of teaching and research activities. Teaching assistantships are more likely to be in universities, which have large undergraduate classes whereas research assistantships tend to be more common in those fields and universities in which considerable research is in progress. Information brochures of most universities give this information.
- Who Should Apply?
Students have a greater chance of getting financial aid if they:
show evidence of a high level of academic achievement
achieve high GMAT scores
demonstrate financial need but have private funding to cover some of the cost. Financial need is not crucial for some awards.
Bank Loans & Aid from other Sources (U.S.)
These are the best alternative for students applying to the MBA program. One thing to keep in mind when applying for loans is that, in most cases, you need to have a co-signer who is a U.S. citizen or permanent resident. The co-signer is responsible for paying back the loan if you should default on it.
There are some banks that waive the co-signer requirement for specific schools. You should check this information from the school website.
As an example, Citibank provides loans to international students admitted to Harvard Business School without a co-signer. Another example is Bank of America providing loans without a co-signer to students at Kenan-Flagler, University of North Carolina (at the time of writing this, the CEO of Bank of America is an alumnus of Kenan-Flagler School of Management)
The terms of the loans usually require any interest or principal payments after graduation. Read the terms of any and all loans before you sign. Make sure you understand those terms and what your repayment schedule and fees entail. Ask for assistance in interpreting the fine print if you are having trouble understanding it.
We have seen that a lot of students are very debt-averse. If you have been accepted to a good program, your chances of getting a good job are very good and paying off the loan is not that big an ordeal as it seems. So, if you do get admitted to a school of your choice, we would recommend that you explore this funding alternative.
There are many other sources of funding especially for graduate students applying to the universities in US. These need some spadework. If you try hard, you may find the kind of funding that suits your needs.
A few good websites that offer information for international students are :
Financial Aid for International Students (www.finaid.org)
NAFSA Association of International Educators (www.nafsa.org)
Scholarships in U.S.A.
1.AT&T Leadership Awards (For U.S. only): U.S. $ 5,000 awards for the students from the Asia-Pacific region going to the U.S. for study in any discipline. Applications must reach the programme’s Malaysia office by 15th September. Decisions are announced by 31st December.
For more details and application form, write to USEFI or email email@example.com or fax at (886) 2-2715-7013 (attn: AT&T Leadership Award).
2. Rotary Ambassadorial Scholarships: The scholarship amount goes upto U.S. $ 25,000 for studies in any subject and any country.
For any information, contact any Rotary Club office or write to:
The Scholarships Programme,
Rotary International, One Rotary Centre,
1560 Sherman Avenue,
Evanston, Illinois, U.S.A.