An MBA Vows To Graduate Without Any Debt

She appears to be getting it. Comments are coming at her about everything from bean recipes to whether or not student loan debt is “the worst kind of debt.” She has been asked to guest blog on other sites, too. She may be changing some minds as she writes. One reader commented, “Before reading this blog, I assumed I would be taking out loans in the future for an MBA – after all it seemed like a good investment when looking at average salaries of those coming out from top programs. But you’re right: Student loans are never good and should be used as a very last resort. I’m hoping that if I save aggressively and apply for a wide range of scholarships/grants I can complete my MBA debt free as well.”

Another reader who just graduated with an MBA and more than $100,000 in debt wrote in to say his goal is to pay off his loans in three years. “I’m doing some pretty drastic things to make sure I succeed,” he wrote. “You don’t go into specifics here but I think the main thing about graduating B-school with no debt comes from the planning and discipline before you actually get in. I try to tell people that all the time. I wish I’d known better.”

NoDebtMBA says, “That’s already more impact than I expected.”


As an MBA-in-training, she’s not so naïve to think that all debt is bad. “I’m not opposed to using debt for leverage – in some cases it can be a great way to make a profitable investment,” she argues. But she thinks it can be dangerous, too. “Debt is a lot like a miter saw, as a skilled user it can be a really useful tool for getting work done, but if you’re reckless you can chop your arm off. Many students seem to be blissfully chopping away and I am slightly terrified of becoming one of them. Debt is also expensive. I estimate that if I took out student loans for all my MBA expenses I’d end up paying for the program twice over.”

So she was relieved in mid-May when the financial aid office awarded her $34,500 in grant money for her first year of the program. “I was worried that I might not get any grants at all,” she blogged. “That would have made my goal of not taking out student loans a big stretch. Financial Aid office, you just made my day.” Hopefully, that money will be granted in her second year, too.

Take a look at her one-year student budget:

  • Tuition and Fees  —  $53,946
  • Health Insurance  — $3,153
  • Room and Board  — $21,088
  • Books and Supplies  —  $4,163
  • Cost Total  —  $82,349
  • Grant Aid  —  $34,500
  • Outstanding Total  —  $47,849
  • Fixed Expenses Outstanding  —  $19,466

NoDebtMBA certainly doesn’t want student loan payments to influence her post-MBA job search. “I’d like to be able to work for reasons other than money within the next ten years,” she says. “Not that I’d necessarily up and quit my job, but that I’d like the option to choose projects and make career choices without money being a factor in my decision making process.”

She’s on a debt-free mission, but she doesn’t promise miracles. “Though I’ve set up my goal as an absolute, I’m definitely checking in as I go. At some point I may have a bill come due and have no money to pay it. I’d like to avoid that scenario, but there may come a time when I do take out a student loan to finish my degree. If that happens I’ll be bummed, because I won’t have met my goal, but I won’t be devastated.

“Realistically, taking out $1,000 in subsidized Stafford loans won’t make a big difference compared to taking out no debt at all in the long run… I’ll have put a lot of effort into meeting the goal of graduating without debt and I’ll know that I’m better off than if I had never tried at all.”

This is the second in a three-part series on MBA debt. The next story appears Monday.

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