Payback Time
By Adriana Gardella
When Shakespeare wrote “Neither a borrower nor a lender be,” it was clear that he wasn’t addressing future MBAs. According to graduateleverage.com , a student debt advisory service, 90% of all MBAs borrow the maximum amount available through federal loan programs, and many also borrow from private lenders. With the total cost of attending a top business school (including tuition, books, and living expenses) exceeding $60,000 annually, it’s easy to see why. But it means you’re looking at over $120,000 in student loans to repay after graduation—assuming undergraduate loans aren’t pushing the figure even higher.
Fortunately, your new degree will likely pay big dividends. In 2006, the average business school graduate’s starting base salary exceeded $92,000, according to research for the Graduate Management Admission Council. On top of that, GMAC reports that two thirds of job offers to MBAs come with an average signing bonus of $17,603.
But when it comes to choosing your first job, MBA and Goldman Sachs alum Michael Fischer warns graduating students not to “be risk-averse because you’re $120,000 in debt.” Fischer, who is now a financial analyst and the author of Savings and Investing: Financial Knowledge and Financial Literacy That Everyone Needs and Deserves to Have! , says, “The temptation is to take a consulting firm job that starts at $120,000 a year.
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