About to get £55k loan and getting the heebie-jeebies...

SteveyLomas

Good idea Mr Rostov - I just looked at Career Development Loans but they don't seem that competitive. Once the interest holiday is over (which is 12 months), they go for 12.9% interest and appear to not allow early repayment - which is a key feature for me as I plan to pay it back as soon as I can. They also only go up to £8k which is a drop in the ocean.

I know I shouldn't think this, but if everything went horribly wrong and I became too sick to work or something, I would imagine it is relatively difficult for an American university to pursue me in the UK afterwards. Anyone have any thoughts on this?

floss2

IS the course so specific that it is only run in the US? Why can't you pursue the MBA at a UK uni? If you have amassed £25k towards your costs, then you shouldn't need to borrow further funds - and the qualification may be more accepted/recognised than one from a US college.

Bismarck

yeah...the US bit got me too....given the possible lifetime costs, I'd look to the UK or the Open University and need a VERY convincing reason to need to go abroad.

count_rostov

SteveyLomas wrote: »

Good idea Mr Rostov - I just looked at Career Development Loans but they don't seem that competitive. Once the interest holiday is over (which is 12 months), they go for 12.9% interest and appear to not allow early repayment - which is a key feature for me as I plan to pay it back as soon as I can. They also only go up to £8k which is a drop in the ocean.

I know I shouldn't think this, but if everything went horribly wrong and I became too sick to work or something, I would imagine it is relatively difficult for an American university to pursue me in the UK afterwards. Anyone have any thoughts on this?

This is the kind of loan I was talking about http://www.rbs.co.uk/personal/loans/g1/graduate-loan.ashx#tabs=section1 it's pretty competitive and not dependent on income like other personal loans. It only goes up to £15000 though. Could you save for another year, add all of this together and cut down on the amount you need to borrow from Kellogs? Remember that US interest rates are very very low at the moment so the APR they're giving you is a lot above base rate. Perhaps if you get enough together that you need to borrow, say, £20 000 from you parents that would be more manageable for them?

( PS it's actually Miss Rostov, but I was reading War and Peace when I joined MSE and the count seemed appropriate given our financial haemorrhaging at the time! Thanks Martin)

mizmir

Am assuming we are talking a Harvard MBA or similar to be considering spending this kind of money? If not then you would be far better off choosing a UK university. Unless you are absolutely sure that you will get a better job and salary because of this where you are planning to work then I wouldn't consider getting into that kind of debt.

count_rostov

http://www.timesonline.co.uk/tol/life_and_style/career_and_jobs/mba/article3885605.ece
a Times article about winning an MBA scholarship

SteveyLomas

These are all good points and exactly the kind of probing I need - thanks everyone!

Floss2 - MBAs are run in the UK, but there is only one with a similar reputation to Kellogg (where I am going) - the London Business School. The cost of LBS would actually be more than Kellogg given the expense of London living and the reasonable exchange rate at the moment. The fees are nearly £50k there just for starters. I think it is also important to consider I don't have an offer for LBS either.

Whilst this is not a Harvard MBA, the ranking is not far off. It is one of the "M7" schools which are supposedly the best in the world - Harvard, Stamford, Columbia, Kellogg, Chicago, MIT, Wharton. You can add LBS and INSEAD in France to that list. People with MBAs from Harvard and Kellogg go into the same career pools.

Obviously there are no guarantees of a job at all at the end of the degree, but sometimes in life you have to take a punt I think. I believe I am in as strong a position as anyone my age could be for this with a bit of savings in the bank. I am just about to finish paying back my student loan so it would be hard to walk into more debt, but an investment in the right education I believe should ultimately be worth than an investment in a house. I also think, as my parents mentioned to me, that if I could manage to put by £25k in a year, I should be able to have enough discipline to do the same the other side.

My plan for after is either to start my own business or work in private equity and I really think this course will help me to achieve those ambitions, through the skills, contacts and ideas I can ferment whilst I am there. Its just that debt keeps niggling away making me think otherwise. I know I sought challenges, but does anyone think it is a good idea?

count_rostov

I think in principle, yes, it's a good idea. I know that Kellogg has a very good reputation and you will find going to an american university to be a much more all-round and enriching experience than you undergraduate degree at a uk uni (I work in scholarly publishing so have some idea of this). You will also be meeting future world leaders, captains of industry etc.
The exchange rate is certainly in your favour at the moment.
Where do your parents live? Could you live with them for three years after you've finished to have a good stab at the loan?
I should add that as a nation we're just not used to large amounts of student debt yet but this is perfectly standard for Americans who would view this as a calculated investment in your future.

mizmir

When do you start paying this back? Is there a grace period to gain employment after the course? Kellogg is a prestigious business school - I doubt you'd have problems getting a job afterwards - but do you have a plan for dealing with this if you do have a period of unemployment?

In terms of whether it is a good idea you are the only one that can answer that. It is certainly an excellent opportunity educationally - probably careerwise - but financially it is a huge commitment. If it is what you want and you have a plan for repayment (ideally that won't take you 25 years!) then go for it. In a sense it is as others have said comparable to investing in a house - most of us go into huge debt without too many worries when we are looking at bricks and mortar (including the mortgage I owe a lot more than you are contemplating - but I suppose the difference is I could sell the house if things got really difficult). If you consider this an equally valuable investment for you then take it!

andromache_2

I don't know much about MBAs - only that they're expensive! - but I can tell that you really want to do it. You're going to have a much better idea than the people on here about how much financial return you can expect from doing the course. It's certainly true that there are people on here who meet that level of debt repayments every month so it's doable - particularly, as you say, since you've been able to save so much this year, which suggests that with a similar commitment afterwards you'll be able to get it gone in a relatively short time.

Working on the assumption that I have to pay for everything myself, and earning as much as I can in the summer holidays, I'll be in something like £40-£45K of student debt by the time I actually start working. (I'm hoping it won't be anywhere as much as that... there's a decent chance I'll get a scholarship and/or some backing from the oh-so-friendly bank of mum and dad). Obviously this includes my first degree etc so it's not as hair-raising a figure as yours, but I know I'd kick myself for the missed opportunity if I didn't take on the debt, and I'd still do it even if I didn't get a scholarship. Again, half of that is with the SLC, so the interest rate isn't as worrying as this one either. Still, what I'm trying to say is that, given the time constraints that you've laid out, i.e. that you need to do this in the next year or so or not at all, you might end up really regretting not going for this... so as long as you go into it with your eyes open as to the risks, I thnk it's a good idea, personally. Good luck with everything x