In 2016, in the United States alone, students loaned $117 billion from the federal government. The US government is actually the most inexpensive and flexible education creditor. But beware, if our ever-qualified and effective legislators fail to reach a new agreement by July of this year, the interest rates on federal government-backed Stafford loans will go up to 6.8%! But actually, this should not come as a surprise.
For quite a few years now, the cost of an academic college education has been increasing at 8% per year, more than four times the national rate. This inflation of tuition rates equals a doubling of the tuition costs every nine years! Obviously, tuition is only a small part of the complete cost of higher education, and research by Business Insider indicates that the average additional cost of an academic education is some $70,000 higher than the tuition price tag, and this is just a number for undergrad studies. See also our review of the best GMAT prep tools.
Some students are in the lucky position to be able to pay for the cost of their undergraduate and graduate studies by themselves, yet the majority is not able to do so and has to take out a student loan and consequently run into debt. When you are looking to take on your MBA degree, don’t forget to find out how much of a total investment you are expected to make. Take the time to rationally and objectively examine whether a graduate management degree from your favorite institution(s) really will bring you the expected return on investment.
It can be a good idea to check out multiple schools, try not to sell yourself short on one specific institution, and try to approach this analysis soberly. It could well be that you come to the conclusion that you ought to set your objectives higher even when this means that you will have to get deeper debt to put your career on the right track.
If, for example, you really feel that you should go for a top education, when you have the drive and you are prepared to make the commitment to do whatever it takes to get into one of the top business schools, then perhaps you should really go for that. If however you feel that going that path is not making any sense for you or your career and goals, forget about it and try to get the education that you need at far less cost.
Please be aware that the numbers associated with student loan debt are frightening, both at the macro and micro level, and I can say that I speak from experience here. Yet, just as a lot of young companies need investment to expand and be successful, so do individuals. In case you decide to make the leap, then go all the way.
Register for a GMAT class, make excursions to several universities, make applications for scholarships and grants, and accept loans if needed. Not surprisingly, without any risk, there will probably not be any reward. Just make certain that you will do all needed actions and steps wisely and with a crystal clear head.
Avoid getting involved in any sort of system that will not be rewarding the risk that you take. Failures and defaults will damage all of us.