Just a Taiwanese-American blogging about his travels outdoors and occasionally his thoughts on life.

Tuesday, September 20, 2016

[Off-Theme] Debt vs No Debt (AKA good MBA versus cheaper MBA)



During the decision process, some applicants will have to decide whether to go to a better ranked school with limited financial aid or go to a lower ranked school with a very attractive scholarship package.

So what is the right choice to make? The answer is: it depends.

If you're an incredibly ambitious finance person and the MBA is the natural next step in your career, then it's almost a no-brainer to go to the best ranked school you can get into. Especially if you're making around 100k or lower.

However, if you're a career changer, that's when things get complicated. There are simply too many variables that can determine your success or failure during your journey. Regardless, at minimum you need to fully explore both possibilities before pressing forward. Only when you have a pretty good objective idea of the pros and cons of either decision, can your choice be vindicated.

Some pros of going to a high ranking MBA program with little/no scholarship:

1. Connections will help you get an interview
2. Name brand will help you get an interview
3. Access to top education resources and career center
4. Alumni network will help you get an interview
5. If you get the job, you can leverage your education for a high or higher salary.
6. Recruiters

Some cons of going to a high ranking MBA program with little/no scholarship:

1. Debt. Perhaps around 100-140k debt.
2. No guarantee of getting high paying job.

Some pros of going to a lower ranking MBA program with full/large scholarship:

1. No debt.
2. Smaller class size, potentially higher quality education experience for you.

Some cons of going to a lower ranking MBA program with full/large scholarship:

1. No brand recognition, perhaps the brand will even hurt you when people see your resume.
2. Lack of connections and alumni network.
3. Limited access to educational resources like a good career center.
4. Lack of companies during recruitment

In essence, the main con of going to a high ranking MBA program with no scholarship is the danger of graduating with a lot of debt and no job or a low paying job. Debt is no joke and you absolutely need to devote time into deciding whether you're capable of dealing with it. At the end of the day, the people who advise you will not have to pay the banks back, you will, so think carefully. You may even end up taking a job you don't like in order to pay off your loans quickly. On the flip side, if you fully take advantage of the resources available to you at an amazing program and leverage it correctly, the experience can pay dividends almost instantly. So, high risk, high reward for career changers.

In my opinion, for career changers whose previous work experience is a complete 180 degree shift from their new MBA concentration, going to a great school guarantees you the interview, but it doesn't guarantee you the job. I worry that previous work experience will be an important final determining factor in the end.

Now, on the other hand, the main cons of going to a lower ranked MBA program is typically connections and name brand. Once you graduate, or even during recruiting, you may need to work a bit harder at getting your name out there to companies that interest you. Your campus may not attract that many companies, or it may, it depends. But there lies the beauty of a heavily subsidized education; worst case scenario is that you lost time and a little bit of money to this MBA endeavor. You could always fall back to your previous occupation. More attractively, you're free to explore what job interests you without the shadow of debt on your back (depending on the size of your scholarship that is).

Ultimately, the choice is up to you. Ask people their opinions, try to get a good mix, not just people who echo what you want to hear. Gather everything you can find, and try and objectively identify the drawbacks and benefits of each decision as it pertains to you. Then make a decision. As long as you make an effort to really flesh out each possibility, I think whatever choice you make is correct. After all, this is your future not that of other people.
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