Ask the Expert

Welcome to the Financial Times Ask the Expert Q&A on MBA applications. Are you thinking of applying to study for an MBA? Are you cramming for your GMAT test? Perhaps you are preparing for an interview at one of your dream business schools?

Cameron Stevens

Cameron Stevens answered reader’s questions on Thursday 1st August 2013.

Cameron Stevens is chief executive and co-founder of Prodigy Finance, a community based student finance organisation that he co-founded with two fellow Insead MBA alumni after discovering first-hand problems students face in funding international education. He specialises in social entrepreneurship and early stage technology investing and will answer your questions about funding an MBA.


How should students plan their finance when applying to business school?

Cameron: First, you should try to maximise the contribution that you can make to the cost of the programme. Whether this comes from savings or, if you’re lucky, family you should be able to put in some of your own funds. Obviously there are loans available, but you don’t want to end up with too high a debt burden on graduation.

This is less of an issue for many students, given the substantial increase in earning potential that the right MBA can provide. But it’s wise to limit your debt burden where possible. That said I would not advise people to put off the decision to go to business school continuously in order to increase savings. The return on investment is high and a sensible amount of loans should be no problem to pay off. Just don’t expect to cover the entire cost of the course with loans.

What kind of funding is available to students?

Cameron: There are various options for students looking into business school. Depending on the student’s nationality and the school they’re attending, there may be government financial aid, including interest-free or low-interest loan options. Some foundations and companies also offer low-cost funding for specific nationalities. You should do your homework to see what options are available in your home country.

Schools may have merit or need-based scholarships/grants, but often deadlines for these are early, so students should look into this when researching the application process.

Your current employer may also have funding options, but will likely require that you return to the company post-graduation under certain terms (e.g., pre-set salary, etc.). If this option is available to you, you should weigh the costs and benefits of accepting. For instance, you will have tuition support and job security, but you will trade that in for flexibility and the chance to change career fields after graduation, one of the primary reasons students pursue MBAs to begin with.

Then there are various loan programmes. Unfortunately for international students, these tend to be fewer. Traditional banks often struggle to price loans internationally, or to track/trace them. And the credit crunch further limited loan options for international students. This is actually why I, as a South African attending a French business school, founded Prodigy Finance a few years ago. We currently offer loan programs for UK and international students at a number of schools, including LBS, Insead, Oxford Said, Cranfield, Vlerick, and Cass Business School.

How much should students have in savings when applying to business school?

Cameron: This really depends on the individual student’s circumstance, such as prior job industry, age, and lifestyle. The most important thing to do is to build a budget for your MBA, and to work out how much you can contribute towards that.

Our loan programme offers students loans up to the cost of tuition because we assume that they will be able to cover the additional amount with savings, scholarships and other funds. So we like to see at least 30-50 per cent of the total budget being covered from these sources.

How much should I invest in my MBA?

Cameron: There are many rankings available in the market to assess the worth of an MBA programme. These should be used with caution in selecting a school since there are a lot more important factors (such as fit) when making this choice.

Schools are not homogenous and your choice depends very much on what you are trying to accomplish with the MBA. That said it is a substantial investment of time and money and obviously requires a return. You can look at the employment numbers in the rankings and the salary increases to do a back-of-the-envelope as to what sort of return you will get and how long it will take to pay back the cost.

You also have a decision about doing a one year or a two year programme. I’m a bit biased on this given my choice of school. But it does make a difference in terms of total cost.

To be honest, most of the good programmes will pay for themselves in time. It’s not just a financial decision - the lifelong career opportunities, friendships and partnerships that develop have value too. I don’t think doing an MBA is a pure numbers decision.

How can I make myself stand out on an application for funding? What points should I focus on?

Cameron: For loan applications, much of your application begins before you actually start filling out the form. Ensuring that you don’t have too large of an existing loan burden (e.g., from undergraduate university study, very high credit card debt, personal loans etc.) and paying your bills on time so that your credit record is good.

Our application process asks students to detail a budget and financial plan. It is critical that we see that students have carefully considered how they are going to manage the costs involved with an MBA. And please don’t withhold information on your application - it’s far better to be honest upfront and clear rather than trying to tailor your application to what you think the company is looking for. These things often come out down the line and then leave your application in worse shape.

For school scholarships, many of them have been gifted with a specific purpose. Some of these you can’t really influence - eg. don’t apply for a Nelson Mandela Southern African scholarship as an Argentinian. But when you do apply make sure to tailor your application to highlight your relevance to the scholarship and to the school. It’s important to make sure that your application is school-specific - explain why you’re choosing that particular school and programme and how you expect to benefit from it. The schools use scholarships both to assist those in need but also to attract the best students to their schools. So you need to highlight why you are an applicant that the school would want to keep.

How can I show I understand and value a business school brand and culture?

Cameron: Schools are very different in culture and brand. I think that until you’ve gone through the process you don’t really internalise this. The rankings can tend to make things appear nicely ordered - I want to go the ‘best’ school I can. But Harvard is very different to Insead and LBS and IMD. And you might really not be a fit for one or the other.

For me, it was a clear choice - Insead prides itself on it’s international outlook and diversity. And this strongly matched my own personality (South African dual national, living in Malaysia, now married to a Finn). The best way to work out a culture is to chat to some alumni from the school if you can. They will be able to give you the lowdown without the marketing spiel.

I do think it’s very important to really understand the culture of the school you are applying to. This will come through in your application and is difficult to fake. I’ve also heard stories of people getting into their ‘dream’ school only to find out it really wasn’t. They were seduced by the rankings in isolation. And that’s a bad outcome for the school and the student.

To read more about other experts featuring in this series, visit our MBA applications homepage.

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