US MBA Funds : Means of funding and the path to a top B-school isn't untreadable

Admissions to top B-schools are predominantly need-blind. Need-blind: If you're good enough, you get in regardless of your bank balance or the lack of it. it's a heartening statement. And a trend that's catching on.

A year's study at a top B-school costs in the region of $45,000. That translates into Rs 22,50,000. That's an initial investment of Rs 45 lakh for your 2 years.

It's not as out-of -reach as it sounds. From Wharton to Fuqua; Kellogg to Harvard and London Business School efforts are on to rope in the best - domestic or international - and ease the burden of funding. Financial assistance to foreign students is finally an area that is being addressed.

The Scholarship Route

Fellowships and scholarships to international students are scant. But they do exist. The criteria for handing out these awards differ. Financial aid at Harvard Business School and Stanford GSB is awarded on the basis of need, and regardless of citizenship. Approximately two-thirds of all HBS students receive some form of financial assistance. The maximum fellowship will cover one year's tuition, the curriculum materials fee and a single health insurance fee. The average HBS Fellowship for the class of 2002 was $8,000 per year.

Wharton, Duke's Fuqua and Michigan Business School concentrate on merit. They offer a limited number of merit-based scholarships and fellowships. Apart from merit, leadership, integrity and service to the community are taken into consideration by the scholarship panels.

Wharton also awards fellowships sponsored by numerous corporations and foundations. Most are dedicated to helping students from underrepresented groups.

Kellogg awards The Jacobs International Scholarship to two incoming international students each year. Recipients receive $7,500 for each of their two years at Kellogg. No application process is necessary for these scholarships. All admitted students are reviewed for these awards.

London Business School awards London Business School Scholarships that cover up to 50 per cent of First Year Fees (£9,250). These scholarships are considered at the end of each of the four admission stages.

LBS candidates can also apply for company scholarships once they have been offered a place in the programme. These include the MISYS scholarship of £7,500 and the British Chevening India and LBS Scholarship, which covers full tuition and living expenses and is awarded to an outstanding Indian National.

Borrowing made affordable

But what happens if you can't compete on the merit platform. If your academic record isn't spotless and your GMAT score not quite perfect? The logical thing to do is borrow, but till recently funding for education wasn't easy to get, weighed down by heavy interest rates, and collateral and credit-worthiness requirements. B-schools are now taking cognisance of the difficulty students face while trying to secure loans internationally. Many schools have tied up with banks or institutions and now offer loans at better interest rates and with relaxed repayment schedules. The loans ideally cover tuition fees and living expenses for the duration of the course.

The advantage to these programmes is that they are guaranteed to all students who have secured a place in the respective institutions (this is not true of all schools). Students don't make payments during the duration of the course or are required to cover only interest payments. After graduation the students get a 6-month grace period, only after this are payments on the principal amount and interest required. Students have up to 15 years to repay their loans and the banks don't require a co-signer or guarantor. Interest rates, though pegged to the Prime Lending Rate, vary from programme to programme. For example, Duke's MBA Opportunity Loan program with Sallie Mae Service and HIEMAR Insurance Corp of America has a 5 per cent disbursement fee, and the interest rate is prime + 2 per cent. On the other hand, Wharton's CitiAssist Loan Program, offered through Citibank, charges prime interest rate +.5 per cent and Michigan Business School's CitiAssist Program has no loan, origination or guarantee fees.

Alternative Funding Opportunities

THIS is among the most innovative alternative funding ideas. A US-based company, My Rich Uncle (MRU) connects students with a network of investors who are willing to bet on you based on future projected income.

Over a 10- to 15- year period after graduation, the student will have to pay the investor between 0.1 to 0.4 per cent of his gross annual salary, depending upon the amount borrowed. Unlike traditional student loans, this option doesn't have a principal or interest component. And even if you haven't paid off the debt at the end of the period, you aren't penalised.

The catch is that MRU charges 2.5 per cent of the borrowed amount as service fee. The other thing you must watch for is that you may end up paying more than you borrowed. And lastly, if you're out of work you still have to pay. The firm may consider temporarily adjusting your payments but late fees will be added.

Discount Offers

SOUNDS too good to be true, but you can save anywhere between 35 to 50 percent on fees in an American college or university. Educational Oppurtunities Inc, through InternationalStudent.com, offers a 'clearing house' for many universities. This is possible because many US colleges have 'empty seats' or vacancies available. These vacant slots often include scholarship or assistantship oppurtinities that are available because the original applicants are unable go to the respective universities to accept the financial aid offered. As part of the savings, Educational Oppurtunities offers to find inexpensive housing and on-campus employment where you can earn enough to pay for your housing expenses. Eligible students must be seeking a bachelors or under graduate degree in any field, or a masters degree in computer science, or a masters degree in business admistration.

The alumni as benefactor

SOME alumni fraternities are happy to pitch in. The American Alumni Association in India, for instance, offers travel grants to students with admissions to American colleges. The grant is currently offered to 15 students every year. While there are no criteria for selection, preference is given to students who are pursuing higher education in specialised courses. However, the association has provided assistance to students going for MBAs.

The catch is that MBA students have a slimmer chance of getting grants. Also the grant is a soft loan. Students must pay it back to keep the grant going.

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