Whether you are planning to start your MBA application journey to some of the top business schools in the world or waiting for your MBA admission decision, most people are always asking: “How to Finance MBA in USA?”

Snehal Sharma, Kenan Flagler Business School 2022 Admit shared –
“When I was looking at the target schools that I wanted to get in, or which were a good fit for me, I only went for what kind of concentrations they have, or what kind of coverage they provide. 
The tuition fee was the last thing on my mind. But it should be a part of your questions when you are preparing your list of target schools – ‘What are the tuition fees?’ ‘What are the housing fees?’ ‘Would you be able to afford it if you’re not able to get the loan to cover the entire amount?’”

How To Finance MBA In USA?

If you are a business school aspirant, and wondering about how to finance your MBA, then this episode is for you. Snehal Sharma, gained admission to one of the most prestigious business schools in the world, the Kenan-Flagler Business School.

In this post, she shares with Deepthi Rajan, Founder of MBAEssayNation, her journey about financing her MBA at Kenan-Flagler. So this episode is going to be extremely interesting and packed with insights.

About MBAEssayNation – MBAEssayNation offers hyper-personalized application consulting, and is your go-to place if you want the very best experience with your business school application.

Without further ado, here’s Snehal.

[Deepthi Rajan] Thank you so much, Snehal, I’m excited to have this conversation with you. The last few months have been very interesting for you as well. So we delve into why it has been interesting. One is, of course, you’ve got admitted to one of the best business schools in the world. And how did you feel when you got the acceptance mail from Kenan-Flagler Business School?

I was elated that I got in. So this was two years in the making and I finally got into the school. I have all the resources that I need now to go onto the next path. It wasn’t an acceptance mail. It was my interviewer who called me up two days before the results came out. And then she informed me that you got in. So getting that call, getting somebody from the UNC community take that extra step to reach out to me was something nice and made me feel special. So yes, I’m really glad to go to a school like this.

Interesting. And I remember you had said you got this call from a number that you thought looked like a spam number.

Yes, I thought it was a spam call! Because you get calls like that from unknown numbers. And I was going to ignore it. But I picked it up at the last movement and boy, I’m so glad I did it because that call was from my interviewer.

Now, what happened next after the euphoria and the ecstasy of being admitted? Because I remember you told me something very interesting that I didn’t know about, that Kenan Flagler happens to be one of the most expensive business schools in the world, right? So talk to me a little about that aspect…that revelation.

When I was looking at the target schools that I wanted to get into, or which were a good fit for me, I only went for what kind of concentrations they have, or what kind of coverage they provide.

But the tuition fee was the last thing on my mind. So that is something that I overlooked. And it should be a part of our previous calculations or the set of questions when you are preparing a list of schools – What are the tuition fees? What are the housing fees? Would you be able to afford it if you’re not able to get the loan to cover the entire amount?

So yes, that was quite a bit of a shocker to scramble up to see what are my savings, how much I can apply for, and what are the different available scholarships.

What were some of the financing options that you explored and which ones did you choose?

So there are three routes through which you can go.

One is a scholarship that covers all your expenses, but this is rarely the case.

The second is a mix of scholarship and financing.

And the third is completely based on your savings or the funds that you raise from family and friends.

So I am still exploring the scholarship route because there are a lot of other scholarships other than the ones that schools provide you that are available. The Toigo Foundation and a few Indian foundations do have these applications that you can fill out and they would cover a part of the costs.

And second, is the financing of costs through loan options. The loan could be either you could go with the local banks or go the online route with Prodigy Finance and MPOWER Financing.

The benefit of going for these fintech platforms is that they cover a bigger part of the loan. So Prodigy is like $75,000, and MPOWER is $50,000, which does cover tuition. This way, you only have to worry about the living expenses and the interest rates are a lot more flexible as compared to when you’re applying for the local banks. So those are the route that I’m exploring right now.

And there is one thing that I have learned is that you need to read the fine print. When you are looking at the financing options while doing your application, it’s all really good. You have everything on paper, you have these points, you don’t need to do anything else and you can easily get a loan. Whereas that is not the case. So looking at the fine print, looking at the costs attached to every single financing option is important. You should do that when you are considering your target schools.

You said, one very interesting thing – the fact that the loans offered by the likes of Prodigy Finance and MPOWER all are far more flexible than what our traditional banks offer. Can you maybe just give an example, if you can explain how that works in your case?

So normal local Indian banks don’t cover the entire cost of the loan. So if you want to go for a loan where you don’t have any collateral or you don’t have somebody to provide the collateral for you, the interest rates are quite high and the loan amount is quite small.

Whereas if I go for an MPOWER or Prodigy loan, they solely base the loan requirements on my profile and what kinds of savings I have. And if I do get a scholarship, or if I get into one of those premium institutions, they do have something for that. So the unique thing about these online or fintech companies is they make their decisions solely based on your profile. You don’t have to rely on anybody else to get that loan.

And the second part is the interest payments. The interest rates are pretty compatible and flexible. When you are doing your installment payments, they would be a little bit lighter on your wallet as opposed to the normal local banks.

These were two of the options that I did consider when applying for online loans.

What’s the interest rate normally charged by the local banks and the ones that are charged by Prodigy Finance?

The local banks are somewhere around 11% – 13% whereas Prodigy and MPOWER are between 7% to 8%. That’s quite a big difference. Since you would be earning in dollars, you would be paying off the dollar loans. So you don’t have to worry about actually converting that to Indian currency. And they also would give you flexibility in the interest rates. If you have a high score, or if you have even maybe 5%-10% of scholarship from the schools that would play a positive way in your application, whereas the normal local banks, don’t consider any of these. Also, their application process is quite cumbersome.

The local banks also have hidden costs, for instance, the administration costs of the processing of loans are quite high, and that is not disclosed during the application process. So when they are processing your application and they’re spending that manpower to process the details, they have a certain amount of fees as administration fees.

MPOWER and Prodigy, on the other hand, waive these fees if you are getting into a premier institute. That’s a plus, and you also get an early acceptance of the funds from MPOWER or Prodigy like I got mine in January first or the second week. Whereas the local banks, take you right to the edge, and there are possibilities that they won’t give you the entire amount. And then you are left with nothing in hand to provide for that. That is something that you would consider when you’re applying for local bank loans.

However, if you do have collateral, Indian banks should be the option that you could go for because they also come in that competitive range of 7% to 8% interest rate when you have collateral.

So it all depends on the collateral?

Yes.

You mentioned something about scholarships from some of the Indian foundations. Can you elaborate a bit more on that?

There are a lot of Indian foundations, which I have started exploring, which do provide scholarships if you are going for a STEM-related master’s, you have an option to apply to these applications.

They’re very very competitive.

Just 1% to 2% of the entire population that applies would get a scholarship. But if you do get in, they cover about 20% to 30% of your entire costs. So getting that 40% off would help in reducing the loan amount.

There is a foundation called Saria, which I am right now exploring, which works with all kinds of students, whether you’re applying for an Indian-related master’s or a foreign master’s. And they do provide these scholarships.

I remember when you were looking for these financing options, I’d also gone through some of these foundations, that offer a scholarship. And I thought most of them weren’t working. Most of them, it seemed, had sort of gone out of business during the pandemic or they had stopped offering the scholarships. So your experience shows that many such foundations are functional and that are good options to reach out to. Right?

Yeah. I mean it would help if you could reach out to them because their websites are still up and running. They’re not defunct. So, if they have gone out of business in COVID, then you wouldn’t get a reply. Otherwise, you could write a polite email stating your requirements and checking if they are still open for those scholarships. So that’s something that I have done, I’ve written to two or three foundations and I’ve heard back from one of them stating that yes, they are open and its application process would be starting soon.

And typically what’s the decision time of these foundations?

While preparing for your GMAT and working on your application is super important, it’s just as important to pay attention to financing options. All these scholarships open up far before the business schools’ application cycles do, like Fulbright scholarship opens up somewhere around March or April every year whereas most schools’ application cycles start around June or July.

It would help that you research these scholarships that are available because their applications and the essays required are pretty similar to normal school applications. So if you’re applying for that might as well apply for these scholarships and see where that takes you. And that would give you more knowledge and background about how the scholarship process works.

What you’re suggesting is that it’s better to get started early with the scholarship process itself. I know your program’s a two-year program. It’s quite intensive as well, but do you have plans to pay off your loans while you study?

So, my loan has a great period of the duration of the program as well as six months after the end of the program. So I have a total of 28 months before I start with the installment payment.

And since these programs are pretty intensive, I wouldn’t be working during the duration of the program. However, I plan to save off some portion of my summer internship, if possible, and pay a certain amount, a few couple of thousand of my loan amount.

Given your experience, what are some of the accepted wisdom or misconceptions about financing once MBA that you typically find? Because when you go online and you look at maybe five to six articles that show up, you would see a lot of common themes that are there. But is there anything that you felt given your own experience, doesn’t ring true? If that’s the case, what would those be?

One of the last questions I asked when I reached out to the current students or the alumni was how did you finance your MBA. They said we had scholarships. And we applied through loans. So the procedure is very straightforward. The details will be listed on the website and you’d be able to easily apply for a loan.

And that’s also listed out on a lot of websites – how simple it is to apply for a loan and you can get in easily.

But what I’ve realized is that the sooner you start working on your loan application, the better. There are students out there who already have an acceptance, but they’re waiting for their second-round results before they start the application process.

My advice would be first, you need to be in with the application for the loan as soon as possible.

If you’re applying as an Indian student, you would be applying to Prodigy or MPOWER because they do cover a big portion of the tuition fees. You just need an acceptance letter and you need to book your funds. So the MPOWER or Prodigy allocates funds for you. If you have an acceptance letter, get in, apply for that, and get the funds allocated to you. If you get into a better school, you can always write to them and ask them if that loan amount will still be available.

And the second part of it is you need to repeat the fine print. So even though Prodigy and Mpowwer do offer you competitive rates. But the method of calculation is very different, as opposed to a normal calculation. So you need to do the calculation. You need to read about any hidden fees or administrative fees or forex charges, which may apply to you before you do a cost analysis of which loan would be the best to go for.

So these are some of the points, which are not mentioned anywhere or not talked about out loud. So you need to keep those in mind when you are thinking about your financing options.

Also, if you want to know the kind of current scholarships or the alumni has gotten in the past, you can always reach out to the finance or the financial aid section on your school website. And they would be giving you providing specific links that would list out all the available scholarships.

If you have the target schools in mind, you can always reach out to them and get those links and start researching because those scholarships are numerous and it takes time to go through every website’s perspectives, and scope, and see if you are the right cultural fit to apply for that scholarship.

When we think of doing an MBA, we spend a lot of time preparing for the GMAT, a lot of time writing our essays, and getting ready for the interview, but we don’t give a lot of thought to financing our MBA. How much time should we typically allot for thinking about financing?

One month before the business school application window opens, I wouldn’t touch that. That’s really when you have to work on your application.

But maybe two months before the application cycle starts, you need to start thinking about what kind of options you have in terms of financing through loans or scholarships.

And if you’re an early doer, then I think you should start at the beginning of the year. Usually, the business school applications open in July and August, you still have 6-7 months to prepare for them.

So January would be an ideal time if you want to look for scholarships because a lot of scholarship applications open in March and April, and that would be the best time to apply for them.

And if you are planning to go for a loan option, knowing your chances, you can write to MPOWER and Prodigy.

You can explore the options because they do entertain queries from students who have yet to receive an acceptance letter. You can share your financial standing and your savings.

And if you have any funds from your friends and family, you are also able to get an assessment of the tentative amount that would be available to you, if you were to apply for a loan. So these are some of the things I would suggest that you should do around January, February, if not latest, by June or July,

If you could go back and relive this experience, is there anything you do differently, and what would that be?

I’ll stop putting that much pressure on myself. You know, sometimes in that application process, you can get lost and you start thinking about what if you don’t get in, what will you do then. So you need to take a step back, take a deep breath and recalibrate yourself. You are here because you’ve done a lot of things in life.

And that’s something, Deepthi, that you’ve always emphasized – just chill take a deep breath, come back again, and work on it.

So I think if you do that, then reducing the amount of enormous pressure that you have on yourself would help in the application process when you de-stress.

Yeah, it’s one step at a time. I think sometimes we all forget that under pressure – that happens to me as well. It’s so easy to give advice but sometimes so difficult to act on it! Thank you for reminding me. You are one of my favorite clients and I loved working with you. How was your experience working with MBAEssayNation?

Well, it was great working with you because you were to me, my partner in that journey to get an admission.

So you want your partner to be someone who can intricately understand what are your aspirations and your goals, and who can push you to do further research.

You don’t want somebody who would just come in, take a look at it, and just say, yeah, we think you should go for this because that’s nice and look good for your application.

Instead, you want somebody who would push you to research. to understand more about yourself and then write it out on a piece of paper. This is what you helped me with because I had everything that I had done on a resume, but I was still not able to present the best picture of myself.

If you want to get that best picture, you need to have a partner who trusts in you more than you do in yourself. And that’s what MBAEssayNation did for me.

What do you consider the biggest benefits of MBAEssayNation?

So when we start with our application, we always send in our resume and our scores and qualifications before deciding upon the best person to work with you on your application.

But you took out the time to have a chat with me, one-on-one to see who I am as a person. And that’s unique to you because this way you made sure you knew me as a person and not just somebody who’s there on a piece of paper who has this many marks and who can get into these many schools.

So if you have somebody who wants to know you on a personal basis and work with you, you would get far better results as opposed to somebody who’s just doing it for the sake of doing it. And that’s what MBAEssayNation did for me.

Also, overall you need to have a story that connects everything. You can’t have disjointed parts. And I was able to work on my application and use the stories that I have presented in my essays and connect that to relevant activities on my resume because you helped me connect all the parts seamlessly.

MBAEssayNation understood my complete life cycle, I would say. So, starting from how I started from my education to the essays, to the resumes, the entire life cycle was covered by MBAEssayNation.

And I didn’t have to worry about thinking or writing about anything extraneous on my application, because everything had been thought through well, had been researched, and had been debated before it was decided and became part of my application, be it my essays, resume or my interview responses.

Before you start your academic year at Kenan-Flagler Business School in July, how are you planning to spend your time?

Well, working on boosting up my resume because as an international student, my opportunities would be a lot fewer as compared to the locals. I am working on building upon my resume and taking courses, there are pre-MBA programs in which you can enroll, which provide these complementary courses, which would always help boost up your resume.

For instance, I want to get into Product Management (PM) and there are a lot of product management courses that are available on edX and Coursera because when you apply to these schools, they look for certain terminologies with the lingo or certain courses that you have already mastered. So that’s why having that on the resume would always be helpful.

I’m looking and leaning toward both PM and consulting. PM would be my first choice and consulting would be my second.

As an international student, you need to have at least two choices of careers that you want to get into.

So consulting has Pre-MBA programs like Bain and McKinsey, where you can apply to them they’ll screen out your applications based on their preset parameters. And once you get in, it would be like an internship. A paid internship for about a month or two, where you would get to work with these leaders, work on certain projects and get to know what it is like to be a part of the consulting team of these top companies.

So these are the two things I’m leaning towards.

Cool,  you’ve started taking some of these pre-MBA courses related to your post-MBA goals. What are the other things that you’re doing?

Relaxing!

It’s going to be a very, very challenging time for two semesters. And you must take the time off to relax.

I would advise against putting in your papers early because there are students who are doing that. So you want to utilize these last months to get as much exposure to your current work as you can.

I can understand if you’re trying to pivot into something else the interest to perform at your work daily declines.

However, I would advise against going for an early designation because you have that long period. You think you’re going to spend it doing something, but you won’t be doing anything.

Try to put off your resignation as close to the departure date as possible, but still, at the same time, try to take some time off, and try to enjoy your life because the next two years are going to be hectic. So you need that time off with your family and friends.

Also, you need to get your visa in, so you need to have that visa in your hand before you want to apply for a resignation, go for it, but at least have your visa in hand. Then only you should go for a resignation. Otherwise, if it doesn’t work out, it would be an awkward situation at work. You’re serving a notice period and you don’t have anything else on hand.

How soon should you apply for a visa when applying to the US?

So a visa appointment should be three months before your school starts.

So I cannot work on my visa application before the beginning of three months from July and hence I don’t think I can do anything, but once that window jumps in, you need to book any of these appointments as soon as possible. Because during these COVID times, appointments are really hard to come by. And sometimes the processing takes a lot longer. So you would be scrambling to book your air tickets, to get everything in place if you get your visa in late.

So you should get your visa first and then actually you can plan out the trips. I have a group of students who live in the same city as I do. So if I get my visa early, I can plan with them and see if we could go together, as opposed to doing that last-minute booking. So yeah, that’s something that you do.

Thank you so much Snehal for taking out the time to share such valuable advice.

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