How much debt is too much debt when trying to earn an MBA?

March 11th, 2009 | by admin |





  1. 5 Responses to “How much debt is too much debt when trying to earn an MBA?”

  2. By gk on Mar 13, 2009 | Reply

    Saw an article on it recently in Business Week, but can’t seem to locate it now.
    Maybe you can do a search.
    (If that helps)

  3. By Jessica M on Mar 16, 2009 | Reply

    The truth is that depends on many factors, such as where you live, how many people are in your household, how old you are, etc.

  4. By jackbutler5555 on Mar 16, 2009 | Reply

    You need a leap of faith that the MBA will bring you job satisfaction and a standard of living you desire. Once you believe in that, stop thinking about it. Here are what you can think about:

    1. Project your average earnings during the first, say, five to seven years. Let’s say you’re going to make an average of $100,000. I use that figure to make the math easy when you are adjusting it to what you think you will make.

    2. Figure $35K for all housing expenses. Mortgage/rent, utilities, taxes, etc. That leaves $65K.

    3. $10K for food. Plan to eat in. Learn to cook, if necessary. Eating out is a huge leak in your income that you need to deal with. Take your lunch, if you can. Get up early and eat a good brekafast including your coffee. Breakfast at work is costly and usually unhealthy. That leaves $55K.

    4. Clothing and clothing expenses, 10K. $45K remaining.

    5. Car and car expenses, $15K, 30K remaining.

    6. Income taxes, 30K.

    That leaves nothing for your education loan expenses. You need to come up with, say, $8,000. I would take all of it out of your housing (No. 2). That would mean you’d probably rent a modest apartment until you can afford to buy a place.

    Also, keep in mind the $100K hypothetical figure might be $80K at the beginning of the period and $120K at the end. That would mean your ability to spend on 2,4, and 5 may be limited at first. Of course, you’d alos be payingless in income taxes as well.

    You may have heard of the book, “The Millionaire Next Door.” Read it, if you haven’t already. The typical millionaire in thei book got there by savings and investments, not by salary. The lesson here is that you could be making a lot of money, but if you aren’t putting a lot aside — especially after the first few years — you’ll just be spinning your wheels.

  5. By Frank Castle on Mar 17, 2009 | Reply

    There is no such thing.

    You will make at least $100,000.00 USD per year after graduation. (Twice that amount if you are Ivy League)

  6. By Lighthearted on Mar 19, 2009 | Reply

    I would say an MBA is not worth any debt. Gates, Jobs and Dell all dropped out of college and are among the wealthiest, most successful business people. Not that you need to be an entrepreneur like them. Rather, you can get a job in a large company and work your way up without an MBA if you ask and learn people skills and show ambition. The only pay off on an MBA is if you want to work for a blue chip company starting at high pay. But there are so many other paths to business success besides an MBA and there are plently of unemployed Harvard MBA’s who lack the discipline and ambition to succeed.
    I have no MBA but because I found successful millionaires to coach me, I have been able to build my business and build wealth without an MBA. If you must get an MBA, do it gradually while you work and pay it off. Debt is a prison any way you look at it and way too much risk to pile on debt in hope you get a blue chip high pay job.

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