Some time back, we had written a post outlining the contours of what are the various costs involved while going for an MBA here –> How much financing would you need?
On popular demand, in this post, we’ll give you a realistic estimate of the kind of money we are talking about.
While all the international MBA blogs talk about MBA financing in Dollars and Euros, we’ll stick to a currency that is giving us newfound respect to everything from onions to MBA degrees – the Indian Rupee.
As you will see from the table below, this is based on a variety of sweeping assumptions so don’t be too surprised if your MBA cost calculations are different from ours. As with the other GMAT and MBA related posts on our blog, use this to build your own MBA costs calculator that cover all the important accounting heads from MBA tuition fees and the cost of living (which can vary substantially in India, USA, UK, Australia, Canada, Germany).
The intent is to give you’re a send of ‘range’ rather than one number. For this purpose, I have ‘randomly’ chosen 3 kind of MBA schools. An Indian GMAT based college, a European 1 year program and a full scale, 2 year course in the USA, albeit one of the pricier ones.
No prizes for guessing, but think on the lines of ISB, INSEAD, Stanford, Stern, Columbia, Harvard and the likes. Most of the information is taken from the school websites. So here’s the math on how we’ve worked out how much an MBA can cost for 1 year and 2 year programs.
|All Figures in INR|
|Pre MBA Expenses|
|Travel (Local + Flight)|
incl in acco
|Miscellaneous MBA costs|
|Average Incoming Salary|
|Average Outgoing Salary|
|© MBA Crystal Ball||$1=INR 65;||1EUR=INR80|
A few noteworthy assumptions that you may want to adapt depending on your own case:
Travel: The assumption is that you will travel once to the campus, and then make 2 trips back home. So this can vary depending on where is home as well as your inclination/requirement to visit it
Exchange/Job Search: The job search component is relevant for most international school as many of them do not have a formal in-campus placements week, the like we are more accustomed to in India. The Exchange is completely discretionary but definitely a good idea in general if manageable.
Average Incoming Salary: The assumption here, which could be big one, is that the average incoming salary is the same for Indian, European and US schools. So you may want to tweak this to your own favorite number.
Socialising/Entertainment: This is a big omission from the calculation. The reason is because this tends to be extremely subjective and hugely variable. Putting a number on that is akin to estimating the number of stars visible on a moonless night – well I exaggerate, but you get the drift. Depending on what kind of person you are, this could be a big expense or it could be relatively modest. So take a pick on this one.
You are now probably thinking what next and how do I use this information. One of the uses of this information will be to attempt a potential ROI and Payback calculation.
Taking a stock of your incoming and outgoing salaries, you can get a sense on which schools would potentially give you the best ROI. Do however be aware of the perils of averages. The average or median salary can be quite misleading on a case by case basis. So proceed with extreme caution.
If you willing to look beyond the top B-schools, the calculations would look quite different.
Use this kind of analysis to get an indicative sense and don’t make a decision based on a decimal point differential between two schools basis these numbers.
For Indian MBA applicants who don’t want to shell out so much, the value of MBA scholarships can’t be underestimated, as they can bring down the MBA costs significantly.