The Masters in Business Management (MBA) degree continues to be one of the most popular degree in India, with many thinking it is the sole pathway to success. Over 2 lakh applicants appeared for the CAT (Common Admission Test) in 2018, for only about 1550 spots, making it one of the most competitive examinations of the country. As students are studying day in and day out to gain a spot in one of the most coveted graduate programs in the country, a question that arises is: are MBAs really worth the investment?
How much does an MBA actually cost?
For most average two-year residential MBA programs, students should expect to shell out anywhere between Rs. 12-15 lakh. Due to services such as the Personal Loans at Finserv MARKETS for Higher Education, which offers flexible interest-only loans for up to Rs. 25 lakhs, you no longer have to worry about financing your education. Over the past year, several MBA programs, including the top schools such as the Indian Institutes of Management have hiked up their fees by 5-17 per cent, due to inflationary pressures and increased operational expenses. Across the various IIM’s costs vary between Rs. 9 lakhs and Rs. 20 lakhs for the two-year programme. However, after this increase fees could go up to Rs. 22 lakhs. Several IIM’s including IM-Bangalore, IIM-Indore, IIM-Ahmedabad, IIM-Calcutta, IIM-Rohtak, IIM-Trichy, IIM-Udaipur and IIM-Amritsar have hiked up their fees.
In addition to the cost of attending, one must remember the process of preparing for and applying to an MBA program is also costly. For any written exam such as the CAT or the GMAT, students can expect to pay for up to Rs. 25,000 for coaching classes, and another Rs. 25,000 for the interview preparation, while the costs of taking these exams is Rs. 1,600 and $250 each.
Additionally, candidates also have to pay an application fee which can vary from Rs. 2,000-Rs. 10,000.
Don’t forget the opportunity cost!
The costs of applying to and attending an MBA program are the upfront costs you would associate to determine whether or not it is the right choice for you. However, do not forget to add the opportunity cost of the salary you will forgo as well as any impending promotions during the two years you will spend studying.
How will my career prospects improve after an MBA?
When evaluating how your career prospects will change after you do an MBA, one of the key most factors to note is that the kind of institution you attend will greatly impact the change in your prospects. While if you are graduating from any of the elite institutions such as any of the IIMs, Indian School of Business, SP Jain, amongst others, your average starting salary could vary between Rs. 19-22 lakh (per annum). The salary you receive will also vary depending on your specialization. Specializations such as data analytics, marketing and finance continue to pay more than others.
However, the picture is not as rosy as it seems. While elite business schools such as IIMs boast of a 100% placement record, other business schools do not have equally promising returns. As per a study conducted by ASSOCHAM, apart from the graduates from top 20 business schools in the country, out of the remaining 5500 schools, only 7% of the graduates are “employable”. Furthermore, data collected by the by All India Council for Technical Education (AICTE) shows that apart from the IIM graduates, only 47% of MBA graduates received a placement offer for the year 2017-18.
Undoubtedly, the cost of doing an MBA can have a significant impact on an individual and their family. This does not only include the financial cost of doing so, but also the emotional cost. When evaluating whether or not an MBA is worth the investment you are making, ensure to take into account, any upcoming hikes in fees, the placement ratio for the college you are considering and the overall opportunity cost of forgoing work while you will be finishing your degree.
However, gone are the days where the worries of financing your MBA degree would impact your decision. Thanks to instant personal loans for higher education offered on Finserv MARKETS, you can obtain loans for up to Rs. 25 lakhs in minutes. These loans are extremely flexible to help cater to your financial situation, with tenures ranging from 12-60 months and minimum documentation required.
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