Cash-flow 44 month MBA vs. Borrow for 22 month program

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.

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If you know those numbers, its a pretty simple calculation.

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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.

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.

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.

If you're paying it in cash you can get a 2k per year tax credit.

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.

Section 513 of the tax code might be your friend.

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?

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.

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.