Pursuing MBA from a top rated B-school like an IIM, XLRI has always been expensive and making financial arrangement in the range of Rs. 15 to Rs. 20 lakhs to provide for the tuition & other fee, lodging & boarding expenses, study material and other general expenses has never been easy.
Has it ever occurred to you that your MBA programme does come with an expensive price tag? Whether it’s the MBA from IIMs, MDI, SPJIMR, IMT, IMI, BIMTECH or even from the next tier institute, a big hole in your pocket is imminent.
Don’t think that Government sponsored and supported IIMs are less expensive. Their fee structure is even higher than that of Private institutes.
No doubt if you get the opportunity to get admission in MBA 2016-18 programme at FMS Delhi or JBIMS Mumbai, the financial burden is much less as these B-schools have low fee structure but once you get the admission offer from IIM Ahmedabad, IIM Bangalore or IIM Calcutta, you tend to think many times as the issue of dream campus also begins knocking your mind and despite the high fee structure you may opt for them and then start searching out the means and ways to manage the high fee structure and other expenses for 2 years.
Calculate well
If you are a working professional the problem becomes even more crucial as you will have to forego your salary for next 2 years and will bear additional burden of high expenses during the period of study. On the top of it, if you have family and wife is non-working, the 2 sided sword may call for very prudent, balanced and judicious decision.
Almost all the top rated B-schools like IIMs, IIFT, XLRI, SPJIMR have finalized or going to finalize their merit lists for MBA admission 2016. Their high fee structure is available on their site. In the month of April/May you will have to deposit the requisite fee in the B-school. The token amount of first deposit may go in the range of Rs.1 lakh to Rs. 5 lakhs depending upon the B-school where you are going to take admission.
Once you decide upon the dream B-school out of many who are offering you admission, think what are the financial options available to you and whether you will be able to bear the burden of fee and expenses to pursue your dream of doing MBA from a particular B-school and how much time it would take to repay what you had collected from various sources to make your dream come true. Students who are in search of resources, find it difficult to bring in lakhs of Rupees to fulfill their desire of pursuing MBA unless they plan well in advance.
Average fee structure
Top 4 IIMs have a fee range between Rs.15 to Rs.20 lakhs, private B schools have a fee structure beginning from Rs.6 lakhs to Rs.16 lakhs and funding of it is a big issue. You may also go for MBA admission in foreign campuses of some of the B schools at a price tag between Rs. 20 to Rs.30 lakhs if you have the resources. Now you need to explore the available options to fund the MBA much before finalizing your preferred B-school.
Check for the Scholarship
Most of the B schools offer scholarships to high percentilers and to the candidates with outstanding academic record. A part of your expenses can be funded with such scholarship amount. But neither it is offered to all nor it is a very good amount. Hence, it may prove to be a drop in the ocean. If the course fee is about Rs.10 lakhs, scholarship will be somewhere around Rs. 2 to 3 lakhs. You will still need a major chunk for the remaining fee and other expenses.
For example, SPJIMR, Mumbai gives 100% tuition fee waiver in the form of scholarship to a selected few; BIMTECH Greater Noida and FORE New Delhi offer 38 and 42 scholarships respectively to 80 to 100 percentilers with a fee waiver of 23% to 50%; MDI awards 5 scholarships of Rs. 10 thousand each to the toppers. These scholarships, if awarded can definitely reduce the financial burden to some extent but still more funds to pursue the MBA will be required.
How much your family, relatives and friends can support
If you are from a very rich family, you can definitely foot the MBA expenses bill. But if you belong to a middle class family or your self- respect comes in between, there is a problem then.
You may ask for financial assistance from your friends and relatives and promise to repay the same later. It can be an option the sanctity of which is always doubtful. It can be resolved by
- -- Make a written agreement to repay at some later date in the manner suitable to both of you
- -- Try to insert some interest component to be paid alongwith the principal amount, it will make your relative happier and softer
- -- It will relieve you of any irritating incidents
Sometimes it so happens that your relatives may begin enquiring about your personal habits like living style, dressing style, dining out, enjoying the life out as you have borrowed from them and they are not sure whether you are utilizing the money judiciously, writing an agreement may restore your peace of mind.
Your savings
MBA is pursued both by freshers and working professionals. While freshers do not have any source of income, working professional with 2-3 years of work experience might have saved something. So this option may be available to those who are working and are getting hefty pay packet. If you have saved that much, it’s possible that high fee bill can be borne by you.
But then other factors call for consideration. For example if you have any dependants, you will need to look after them. If you are married and your spouse is not working, you need some money for that. Then you may not think of full time MBA which you always wanted to pursue, unless other options like good family support or outside funding is available.
Banks and Financial institutions
This in fact is the best option with the assistance of which you will complete your MBA without imposing a burden on your family or on your savings although a nominal part of the fee and other expenses might have to be borne by you.
Different funding schemes: Premier and Non premier B schools
Banks have two types of education funding schemes. Some of the banks have categorized premium B schools which include IIMs, XLRI, SPJIMR, JBIMS, MDI, IMT, IMI and other top rated institutions for example there is “SBI scholar loan scheme” which caters to the financial need of the students who get admission in these top rated MBA institutes. Similarly Central Bank of India, Dena Bank, Punjab National Bank and many more have attractive funding schemes especially designed for the students of these B schools.
Banks have their parameters to decide such premier B schools and their branches are provided with the lists of these top rated institutes.
Go for Premium MBA study loan scheme-
- -- Low rate of interest in the range of 9.7 to 11% per annum in comparison to regular education loan schemes. SBI is charging 9.7%; Canara Bank 10%; Central Bank 10%
- -- Maximum loan amount can go upto Rs.20 lakhs without any guarantee or collateral security. Higher amount can also be taken by offering the required guarantee and/or security.
- -- Loan upto 100% of course fee can be availed.
- -- Simple interest will be charged during course duration
- -- Additional Interest benefit, if parent becomes co borrower
- -- Repayment begins after one year from the completion of the course and to be made in 7 years
Second type comprises all other MBA/PGDM institutes which are not covered in the premier B school list. Banks provide less financial assistance to pursue education in these institutes and charge higher rate of interest. Besides margin is also required even for slightly higher than minimum prescribed amount say more than Rs.4 lakhs or Rs.7 lakhs which varies from Bank to Bank.
Avail and remain independent
The funding from Bank will help you pursue MBA without any financial hurdle. You may not avail entire loan at one go, better to borrow the amount as and when the institute demands it. It will further reduce the interest burden. Your own savings that you had may be utilized fruitfully at your home or for further income generation.
You have ample repayment period after completion of the course, hence do not have to worry much about the repayment.
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