<p>My eventual goal is to get an MBA from a top school.</p>
<p>One drawback is that my undergraduate gpa is not competitive at all. </p>
<p>Here are my reasons for obtaining this Master’s</p>
<li>It will be done part time at a nearby reputable univ during nights/weekends so I will continue working and have a steady flow of income = I have the financial means</li>
<li>I need to do well in these Master’s courses to make my future application more attractive to business schools (i.e. proving that I’m academically capable)</li>
<li>The school’s name is well known in its region (East Coast). The degree will help me open more opportunities in this large metropolis city that my undergraduate degree would not. (connections?)</li>
</ol>
<p>are my reasons valid? my undergraduate debt is around 20k. 35k extra isn’t that bad right for my Masters? since it will be done while I work FT</p>
<p>To really answer your question, you should tell us what your undergrad degree is in, what school it’s from, just how bad your GPA was, the Master’s you’re thinking of getting, etc.</p>
<p>55k in student loans equals approx. $630 a month for 10 years at 6.8%. You will pay over $20k in interest. And, I highly doubt that banks are even giving that interest rate out right now. (7.8% = $665/mo., 24k in interest; 8.8% = $700/mo., 28k in interest)The calculator I am using says you need to make 75k annually to justify this. I think it would be closer to 85k myself. Simply because I enjoy things like food, clothing and shelter.</p>
<p>Now, Imagine paying on this loan for 4 years, and then adding another 20 - 40 k on top for business school.</p>
<p>^with 55K in loans you don’t repay them in 10 years. It is typical to repay them over 20 years with a graduated payment plan.</p>
<p>I did it. I don’t regret it. I am on my way to a fully funded PhD now, but I knew the PhD would be funded. If there is a possibility that you won’t have to pay for the MBA it might be a good idea. But it would probably be better to get some valuable work experience that is a big part of the MBA application.</p>
<p>I was citing that formula to make a point.
Taking longer to pay student loans makes it better? Who the hell wants to be paying for school two decades after you graduate!
And with academic difficulties in the past, do you believe a funded grad program to be a definite?
I am not trying to knock the OP… The more school the better! I just think there are few masters degrees worth 35k… especially used purely for a MBA set up.
Now, going for an MBA and taking on some debt to do so (and ending up with about 40 to 50k in total debt) might be worth it. MBA degree has a strong chance at a great ROI, given the right work experience.</p>
<p>Belevitt, the federal loan limit for loans is currently 10 years. You can extend it to 30 years with extended repayment, but it’s not a good idea because you end up paying more in interest than you took out in loans.</p>
<p>The best preparation for an MBA is to get a full-time job, in business, and work your way up as rapidly as possible to a management/supervisory position. I’m not sure than an MA would help you get admissions to an MBA program. The skill set and things studied are quite different, unless you’re getting an MS in finance or an MA in economics or something. And even then, the thing studied are still quite different.</p>
<p>Juillet, I am telling what my and my wife’s situation is. It may not be as good to repay a 55K loan over 30 years as it would be to repay it over 10 years, but the monthly payments are pretty unaffordable on entry level salaries if you try to repay over 10 years. I expect that down the road, I will be taking a home equity loan and knocking out all of our student loans in a single shot. My and my wife’s decision are not ill-informed, she is a professional financial aid counselor in higher education.</p>
<p>I didn’t say that it couldn’t be done and that it wasn’t done, I was just saying it’s not necessarily a good idea to do it. You and your wife have to make decisions that are best for you, and your situation is different as well if you are planning to knock out all of your student loans in one fell swoop. Under normal conditions of extended repayment, a person will end up paying more than twice as much as they took out in student loans - with the majority of it being interest - so it’s not smart financially if you can afford to pay it off on 10. Some people just can’t, though.</p>
<p>At what point is the return on your investment so diluted that it was not a good idea in the first place?
I am all for higher education, but choosing a school that puts you in 35k worth of undergrad debt and then possibly another 25k for graduate is really not the best idea (in any combination).
You really do not understand what that five, six or seven hundred a month loan payment feels like at 19 or 20. Over time, it wears on you. Only 4% of the workforce in America earns more than 100k annually, and that is about what you would need to make in order to pay 60k off in under ten years.
Medicine, law and possibly a top 10 MBA is the only real career paths that could conceivably pay such a steep amount of debt off in a short period of time. These loan calculators do not factor in the surprise instances that pop up throughout your adult life that strain your finances.
This just makes me feel like choosing a well known, 3rd tier state university for my graduate studies, and attending part time while I pay as I go, was really the right thing to do. Yes it will take longer and my MBA will probably rely more on my work experience than a top b-school, but I will be debt free when I am done.</p>