An MBA Vows To Graduate Without Any Debt

In April 2011, a woman received one of the most important letters of her life, announcing her acceptance to one of the world’s top five MBA programs. She popped open a bottle of champagne and celebrated with her family and boyfriend. Then, she looked at the price tag. To attend, she’d need to shell out a jaw-dropping $150,000-plus to cover tuition, fees, food and housing. All the while, missing out on two years of steady paychecks.

When the shock wore off, she set herself a challenge: to graduate from B-school without a penny of debt. “An MBA will be a worthwhile investment for me, (but) I am not confident enough to take on six-figures of debt to obtain it,” she says. “It’s much harder to define “not too many student loans” rather than “no debt.”

She was already pretty good at keeping a budget – she spent less than $20 preparing for the Graduate Management Admission Test, for instance. And instead of hiring an MBA admissions consultant, she had a couple of family members and friends read over her essays and offer advice. But to keep herself accountable, she started writing her first-ever blog, saying she  “would never follow through” with the goal without it.

She is NoDebtMBA (she is also not comfortable revealing her name, nor the school she’ll attend), and she may be one of the boldest MBAs heading to B-school this autumn. Debt loads at the top-ten U.S. B-schools averaged $87,049 among Class of 2010 graduates, according to U.S. News and World Report data. “I think we can agree that student loans in and of themselves have no benefit (and some detriment),” she said in a recent email exchange. “If I am able to get through business school without student loans and accomplish the same things, why shouldn’t I? And there is no way to know if I can do it unless I try.”

At a time when roughly 75% of MBAs go into hock to pay for their degrees, she’s taking a bold stand for austerity and saying, “Not me!” Most MBAs who graduate without any debt have been sponsored by their employers or go to state residents who go to public schools. No Debt MBA is self-employed. So besides her Spartan budget, she’s using her $30,000 in savings, $4,000 left over from a plan set up by her parents for her undergraduate education, and whatever grant money she can get to stay out of debt. So far, she will be able to pay her entire first year bill at a private elite school in cash.


To stick to her plan, she’s cutting way back to what most would consider an ascetic lifestyle. To start, she won’t be burning through a data plan on any smart phone. She has set herself a $25 per week food budget in which beans get preference over meat and spices are best purchased for $1 at CVS. She has given up snacking. She’ll ride a bike to campus when the weather cooperates. And the apartment she’s sharing is both smaller and cheaper than the norm. “Honestly, I looked at my school’s budget for living expenses and was a little shocked,” she says. “I currently live on less than half of that.” She’ll also opt out of popular MBA class trips abroad which can cost as much as $5,000 an excursion.

Amid the frugality, she still plans to have a good time. “I do expect my expenses to go up. One of the add-ons I won’t be forgoing is socializing with fellow students and that will likely include a lot more visits to restaurants and bars.”

Her inspiration is multi-pronged, but rooted in her practicality and her desire for flexibility: “I don’t want to start living a six-figure lifestyle before I’ve even gotten a single job offer,” she says. “I know I’ll have some degree of lifestyle inflation while in school in order to network and get the most out of my experience, but I want to keep myself on the straight and narrow for everything else.

“Staying debt-free and getting an MBA, in and of themselves, are not end all goals for me,” she writes. ” Instead, they are steps towards financial independence and being able to pursue projects of interest. My underlying financial motivation, what really drives me to financially succeed and the metric by which I measure success, is freedom and flexibility.”

And she’s a little quirky, too. “I have always liked the idea of goals that seem a little out there and unobtainable… and if I can convince a few of my MBA peers to join me that’s great – I could use the support.”

This is the second in a three-part series on MBA debt. Part one, MBA Debt: The Burden Grow Heavier & Gets Scarier, was published on Wednesday. The final story appears Monday.

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