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Message
Cash-flow 44 month MBA vs. Borrow for 22 month program
Posted on 3/20/17 at 1:39 pm
Posted on 3/20/17 at 1:39 pm
Likely going to start LSU PMBA in August. They offer the program in 1 or 2 classes per module; with the 1 class option taking 44 months and the 2 class option taking 22 months.
If I go the 44 month route, I can cash-flow the program. Downside is it taking nearly 4 years. Going the 22 month route, I would need to borrow about half of the cost for each module.
Thoughts?
If I go the 44 month route, I can cash-flow the program. Downside is it taking nearly 4 years. Going the 22 month route, I would need to borrow about half of the cost for each module.
Thoughts?
Posted on 3/20/17 at 2:12 pm to Golfer
What interest rate do you believe you will have to pay?
How much more money do you think you will earn upon graduating?
How much $ will need to be financed?
What is the duration of the financing?
If you know those numbers, its a pretty simple calculation.
How much more money do you think you will earn upon graduating?
How much $ will need to be financed?
What is the duration of the financing?
If you know those numbers, its a pretty simple calculation.
Posted on 3/20/17 at 2:27 pm to Hawkeye95
"How much more money do you think you will earn upon graduating?"
Yeah pretty simple.
Yeah pretty simple.
Posted on 3/20/17 at 2:57 pm to Hawkeye95
quote:
If you know those numbers, its a pretty simple calculation.
Well I don't know them all. In particular the earnings after graduation. My current employer isn't going to give me a salary increase just for having the paper. I'm using this as part of a long-term strategy...
I'd be financing ~$20k and I'd likely get a 3.5-5% rate depending on the term selected.
This post was edited on 3/20/17 at 2:58 pm
Posted on 3/20/17 at 3:00 pm to Golfer
Are you expecting to stay at your current company after graduation, or will you be looking to move elsewhere? How old are you? It really depends on your timeline, IMO.
I would probably do the 44 month program, unless I know for sure that I would have something with a significant salary increase lined up for me when I would graduate.
I would probably do the 44 month program, unless I know for sure that I would have something with a significant salary increase lined up for me when I would graduate.
Posted on 3/20/17 at 3:04 pm to Epic Cajun
I'll be 31 when the program begins. And if I am with my current company in 4-5 years it will be because I will have a new role/promotion.
Posted on 3/20/17 at 6:04 pm to Golfer
quote:
My current employer isn't going to give me a salary increase just for having the paper. I'm using this as part of a long-term strategy...
then 44 months makes more sense to me.
Posted on 3/20/17 at 6:22 pm to Golfer
I'd say finance it. Or try to make an investment that would cover the spread on interest. You can also write the loan interest off, and your tuition.
Posted on 3/20/17 at 6:34 pm to Rust Cohle
quote:
You can also write the loan interest off
We already write off the max allowed with wife's grad school loans.
Posted on 3/20/17 at 7:46 pm to Golfer
If you're paying it in cash you can get a 2k per year tax credit.
Posted on 3/20/17 at 8:00 pm to Epic Cajun
I believe I'm only eligible for the tax credit with the 22 month program as the 44 is below full time grad student status of 6 hours a module.
Posted on 3/20/17 at 9:11 pm to Golfer
I didn't think of that, I believe you're correct.
Posted on 3/20/17 at 10:11 pm to Epic Cajun
Section 513 of the tax code might be your friend.
Posted on 3/21/17 at 7:35 am to Golfer
44 months is a long time. I'm not saying you will never get through it but that's a lot of important life between 31-35 to have to be focusing on work and school.
Posted on 3/21/17 at 1:01 pm to Golfer
Aside from numbers and interest rates is the MBA really in your best interests? Have you thought about what it will open up for you if anything?
Posted on 3/21/17 at 1:23 pm to lynxcat
Let me second researching 513... You can get way more than the 2k annual education credit if you fall within the scope of an un-reimbursed business expense. Here's a handy little chart to see if you can deduct the whole thing.
This post was edited on 3/21/17 at 1:25 pm
Posted on 3/21/17 at 1:27 pm to redstickrun
Normally I'd be all for paying cash, but 44 months is a lOOONG time. So I'd do one of two things here, I'd save up for a year and then do the 22 months. Get it done in 36 months. Or, I'd do the 22 months.
Your life at age 30 can change drastically in 44 months/ 4 years. No way I'd do a 2 year school over 44 months at that age, it would be WAAAAY to easy for something to happen, you to have to move or stop, and never finish the education when having already paid for part of it.
Knock it out, get it over, save up money, cut your lifestyle, and get it all behind you asap.
Your life at age 30 can change drastically in 44 months/ 4 years. No way I'd do a 2 year school over 44 months at that age, it would be WAAAAY to easy for something to happen, you to have to move or stop, and never finish the education when having already paid for part of it.
Knock it out, get it over, save up money, cut your lifestyle, and get it all behind you asap.
Posted on 3/21/17 at 1:41 pm to lynxcat
quote:
Section 513 of the tax code might be your friend.
I'll definitely look into this, thanks.
Posted on 3/21/17 at 2:37 pm to Golfer
Something you may also want to consider is your current career progression/track within you company.
Many companies such as accounting and law firms use a more or less standard promotion schedule. If yours does it may be worth timing the end of your schooling to come after your promo. That way when you are finishing your program and you are going through the recruiting cycle, you have already maxed out your prior job title for that time (instead of having put in 3 years as a Analyst having yet to make the jump to the next title chain).
I know this isn't practical for 99 out of 100 people. But I think it is a good thing to think about it in terms of doing the 44 instead of 22. If you know you are going to get promoted to a better title, I think it takes you a little further to already have achieved that when you are applying for jobs. Particularly when it comes to applying for a Manager Rotational program which are really popular for people finishing MBAs.
Many companies such as accounting and law firms use a more or less standard promotion schedule. If yours does it may be worth timing the end of your schooling to come after your promo. That way when you are finishing your program and you are going through the recruiting cycle, you have already maxed out your prior job title for that time (instead of having put in 3 years as a Analyst having yet to make the jump to the next title chain).
I know this isn't practical for 99 out of 100 people. But I think it is a good thing to think about it in terms of doing the 44 instead of 22. If you know you are going to get promoted to a better title, I think it takes you a little further to already have achieved that when you are applying for jobs. Particularly when it comes to applying for a Manager Rotational program which are really popular for people finishing MBAs.
Posted on 3/21/17 at 8:49 pm to Stuckinthe90s
My program is 20 months and I can promise you 44 would be a slog. No thank you.
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