Financing your International MBA

An MBA is always a big investment in our future. Getting admitted to our dream schools is just the beginning of an eventful journey that requires careful planning and research at every stage.
In my case, even though the Ivey MBA is a 1 year program - which means a significantly lower ROI as compared to typical 2 year US MBA programs - the program cost pegged at 72,000 $ for international students was certainly not cheap. The total cost of MBA including living expenses came to around 90,000 $ (36 Lakh INR), a significant fraction of which had to be arranged through other funding opportunities.

The following list outlines few avenues of financial support that may help you make both the ends meet:

1. Scholarships and admission awards: At Ivey, outstanding candidates are awarded scholarships and admission awards along with the offer of admission. Typically, around half the class receives admission awards in the range of 2500-22500 $, with the average standing at 7500 $. I was fortunate enough to be awarded the C.B. (Bud) Johnston Award of Merit along with the admission offer. These awards are based purely on merit, regardless of citizenship or financial need. We were required to complete the financial aid application (scholarship essay, current resume and financial statement) along with the admission application, in order to be eligible for these awards.
Tip: These scholarships are awarded on a rolling basis throughout the admission cycle, hence I would encourage all future applicants to apply to the Ivey program as early as possible.

2. Financing opportunities for domestic students: If you are a domestic student at Ivey, you have a special funding opportunity. Ivey has partnered with Bank of Montreal, TD Canada, Royal Bank and Scotia Bank to offer credit to students upto 102000 $ (with excellent interest rates and repayment options). More information on this opportunity is available on the Ivey website.
As an international student, I was not eligible to participate in such a program.

3. Financing opportunities for international students: I reached out to the Ivey Financial Aid Director, few months ago to explore financing opportunities for international students (who would come to Canada on a study permit). There are a couple of options available:

1. International Education Finance Corporation (www.IEFC.com): IEFC has specific loan programs for international applicants studying for an MBA in Canada. I did explore this option for a fair bit, and it seemed promising on preliminary analysis. The interest rates offered were quite competitive (PLR+ 0.5%) and repayment period was as long as 15 years. The spin though is, that we need to have a US co signor (a US citizen or Green card holder with a decent credit history for last 21 months) who would co-sign the loan application.
   
2. Paras Education Foundation (www.isloan.org): Paras Education Foundation, based in Mumbai also offers a similar loan program to Indians who wish to pursue MBA abroad. However, even they require a US co signor. Students need to explore this option carefully as they charge you at every step and at least, I found them to be a bit more aggressive.

4. Education loans through Indian Banks: Most Indians would resort to this option to bridge the gap between fund requirement and availability, after looking at all other options. I did a fair bit of research on this an here are my findings:

1. PSU banks Vs Private banks: By and large, leading Indian private banks (ICICI, HDFC, etc) do not place education loans high on their priority list. Recently, few MNC banks such as HSBC (loan programs for MBA in UK) and Deutsche Bank have started giving this much ignored area the required fill up. However, my analysis revealed that usually such banks offer loans at higher interest rates, charge processing fee and penalize for early repayment.

On the other hand, nationalized PSU banks have a much friendlier education loan
program. Websites such as www.apnaloan.com and www.moneycontrol.com offer good
primers on basics of these loans, and I would recommend students to visit these websites
before they decide on the bank.

In my case, after a careful comparison between several loan programs offered by SBI, Canara Bank, Bank of Rajasthan and others, the VidyaSagar loan program from Canara Bank seemed to offer most advantages, as under:

• A loan of 20 L INR (50,ooo $) at a floating interest rate of 11%
• a concession of 0.5 % on interest repayment during the study period
• no prepayment penalty
• no processing fee

Of course, as the loan was for education abroad, I was required to pledge assets totaling 20 L INR (immovable property such as land) as a mortgage.
The staff at Canara bank certainly seemed to be friendly and issued me a loan sanction letter within a week as I was required to submit the same along with my Visa application. Certainly, Canara bank gets a big thumbs up from me. Students who wish to know more, can reach me through email/phone and I will be happy to share more information.

Hope the above information was helpful. I will cover details on Visa application for a study permit in Canada in my next post.

Cheers!
Avinash