Largely people have this wrong perception that, the more fees we pay for B-Schools or MBAs colleges, the better the studies and salary package at completion of course. So, students and their parents tend to opt to study at more expensive B-schools.
While it comes to middle-class families where they cannot afford the B-School fees, they go for a study loan with an expectation that the student will get a campus placement with a good package and can repay the loan later. The B-school sells the fact that it has a tie-up with some reputed banks for student loans. Not only that, but they also facilitate and guide the needy students with processing help for loans to finance their B-School college fees.
Posh Buildings And Show Set False Expectation Of Future Success
Parents and students alike are getting attracted to the fancy B-Schools’ nice buildings, attractive landscape and gardens, and with the cool digital promotion, attracting brochures and displays. Many parents and students get impressed with this fancy propaganda and emotional manipulation. As a result, they develop an inferior perception of good university MBA colleges and affordable colleges with adequate infrastructure. But unlike the fancy private B-School, it has no freshly painted building, good impressive front elevation, gardening landscaping. These older MBA schools / non-fancy B-Schools charge less fee, offer decent quality management education with better chances of attracting talented students. You need to be aware of one fact, the more expensive the fee, the lesser the chance of brighter and more talented students getting attracted to the school.
Misconception Of Better Career Growth For Higher Fee B-Schools
Many misrepresentations are made by the fancy B-Schools to give the wrong impression of good and high salary offers. Middle-class parents and students should be careful and not get greedy and spoil their future. This excessive greed and strong craving for remarkably well settlement, makes parents/students lose their sense of balance and make reckless and wrong choices. Greed is not good, choices made with greed lead to much suffering later.
Middle-Class Students Should Be Careful Of A Few Things Like:
- Very promising and inflated claims of job offers – they need to find actual positions on placements and offers. Not depend on college data and consultants. This is quite difficult.
- Many B-Schools show only the average salaries for the top 100 or 300 students. Sometimes just 25% of their entire students. As a result parents/students get unreasonably high expectation of future salary post-MBA
- Today, we see that the Chinavirus pandemic has impacted the economy badly. Past performance of the economy is no indicator of what will happen 2 years after you take admission in a B-School
- For rich parents’ kids, the parents are paying fees, unlike middle-class students who are taking student loans. So even with the same package, their net salary after EMI will be higher than for middle-class students on student loans.
- Lastly, referrals for fancy B-School admissions are paid to various people, so they are protecting their commission while you make wrong decisions in trusting them and acting on their advice. These commissions receivers could be anyone – graduation college staff, websites, educational consultants and sometimes very sadly your friend or relative too!
- Better to assume lower salary expectations from college and joining low fee B-School rather than joining fancy B-school by having greedy high expectations.
Getting Good Job Is Not The Goal Of All Student And Their Parents In Posh B-Schools
Many rich parents don’t care if their child does not get a job. This may be a good qualification to have for a marriage offer or they may settle their kid in their own successful business. Such children of rich parents pursuing an MBA from fancy B-School are not expected to be breadwinners. So their decision is not based on: But for middle-class students, girls or boys, having taken a student loan, not working is not an option!
If a student takes an education loan and fails to get a good package on-campus placement, there will be another burden to repay the loan money with loan payment and interest EMI every month for many years.
As it is in a job there are so many cuttings – professional tax, PF, ESI, or TDS. Some companies charge for pick up and drop facility. The job may be in another city so you need to pay for high hostel fees and food. After all these cuttings, if further a student loan EMI is deducted there may be nothing left.
For a 1 lakh rupee loan, the monthly EMI for various repayment period is provided below
- 5 years is Rs.2,028
- 4 years is Rs.2,441
- 3 years is Rs.3,133
- 2 years is Rs.4,522
- 1 year is Rs.8,700
If you take a 3 year loan for 5 lakhs, to get your student EMI repayment amount you need to multiply 3,1333 x 5 = 15,665/- per month.
Posh B-Schools May Not Get Higher Paying Jobs, Most Get Same Salary As Cheaper B-Schools
So, the higher the fees in the college the more the student loan EMI. So, before choosing a college to join it is good to choose those MBA colleges / B-Schools who give honest and lower expectations of job offers. B-Schools that charge lower fees and with decent quality of studies and maintain good discipline in college are better. They may not spend on fancy buildings, great looking gardens /lawns, good looking counselors, and eye-catching advertisements. But they may be better choices for middle-class students. Many times, posh B-Schools means more investment and higher student loan EMI.
No Money Left Beyond Basic Needs As Entire Free Money Goes To EMI Payment
Further, compounding the problem for them, middle-class students who take big student loans suffer much unlike their rich classmates. Their parents are not rich enough to pay 5 or 10 lakhs fees. These middle-class students take student loans and have to pay large EMIs from their future salaries for many years that is a very frustrating and depressing experience. They cannot get married soon or be able to contribute to family responsibilities for many years as they have student loan EMI to pay.
Conclusion
Due to all the above mentioned reasons, it is best to stay within your limits when choosing a B-School and avoid taking big student loans to join a fancy B-School. Due to the unpredictability of the future economic situation, lack of clear knowledge of salary after completing B-Schools. Better to be safe than sorry.
