The cost of attending a top MBA program can be substantial. But with some good financial planning, you would be able to sustain yourself during your MBA and after (assuming you spend some time hunting for a job and the income may not start immediately). If you are aware of the cost involved at various stages in advance, you would be in a comfortable position to make appropriate arrangements, be it applying for loans or getting partial aid through scholarships so that once you set foot on the campus, you do not face any financial hurdles.
There are many costs which prospective students tend to oversee, so having some basic idea about the various aspects involved would ease your MBA journey.
For convenience, we would categorise it under:
1) GMAT: The GMAT score is an essential prerequisite for the top B-school, so you would need to gather study material from various resources. GMAT preparation books, GMAT coaching fees (if any) and lastly the GMAT test fees which is $250 needs to be factored in. In case of multiple GMAT attempts, you would need to keep some buffer for the test fees for each of these attempts.
2) Once you have your list of schools ready, you would start working on your applications. Again depending on whether you would take professional help for school shortlisting and your application essays, you would need to plan out accordingly.
3) Submitting the applications for each of these schools may cost between $0-$200 depending upon the schools you choose.
MBA program cost:
1) Tuition fees: The program cost would vary depending upon the school. For instance, whether you have chosen a public university program or a private business school would impact your expenses. Public universities tend to be comparatively less expensive. The cost of the program will generally not include the books. You may need to carry your own laptop.
2) Travel cost: This would include air ticket, visa costs.
3) Accommodation: A college accommodation may work out cheaper. Depending upon your space requirements, whether you are single or with a family, the rent would vary. Grocery, laundry, daily commuting costs, utility bills, health insurance (if applicable) make life a little more interesting, if you thought an MBA wasn’t action packed enough.
4) Socialising: It’s a known fact that a lot of contacts develop during networking events. So if you’re looking for maximising your social network during your stay, there are informal (free, BYOB) and formal (free or paid) events that’ll keep the outflow going.
5) Professional networking: During internship, job search or at any other point during your MBA program, if the need arises for travelling to a different location these trips will hit the expense account. You may need to meet up with people for informational discussions or interviews. If you’ve chosen to participate in an MBA exchange program where students can spend time on another campus in a different location, you would be responsible for bearing the related expenses.
6) Opportunity cost: While studying, your regular income stream would stop and you would have to forego the salary for that period. Opportunity cost is computed based on the duration that you are unemployed. Even after completing you MBA, you would need to consider some additional period for job-hunting in case of a possible economic downturn.
The range of most of the factors involved would vary depending on the university and its location and most importantly the duration of the program. Research and data about the finances would help alleviate the uncertainties and stress involved and would provide mental peace so that you can be focussed on your MBA without any unnecessary diversions.
Edit: Based on the responses and queries on this post, we wrote a more detailed article on MBA cost calculations, with specific numbers giving an estimate of the expenses for each category head. Here’s the link: How much does an MBA Cost in India, USA, Europe.
Also, check out this post on getting MBA education loans without collateral. It might help you bridge the gap between your savings and the overall MBA cost.