Posted by fmba
on May 31, 2011 in MBA Financing
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Daniel Wesley knew as soon as he started applying to business school that he wanted to avoid student loans. He'd already racked up about $45,000 in loans from his undergraduate days and didn't relish the idea of adding another $200,000 or so to that debt load, he says. When he found out he got into the Weekend MBA program at the University of Chicago's Booth School of Business (Booth Part-Time MBA Profile), he turned to his mother and father, a retired construction foreman, for help. They agreed to pay for his first year of school, which he just completed, and plan to pay for his second year as well.
"It is a huge advantage and definitely a relief to know that I won't have nearly a quarter of a million in debt hanging over my head when I graduate," says Wesley, 33, chief executive officer of Creditloan.com, a website on personal finance.
Wesley is one of a growing number of graduate business school students who are using their parents as a funding source for B-school, either accepting tuition gifts from them or negotiating interest-free loans. A two-year business program at a top school can easily add up to $150,000, after factoring in tuition and fees, room and board, and living expenses. From 2003 to 2007, the number of prospective students who said they expect their parents to help them pay for business school doubled, and was approaching 40 percent in 2010, according to a 2011 survey by the Graduate Management Admission Council. The lingering effects of the economic downturn, coupled with tighter lending standards, have left many students nervous about taking on more student loan debt, says Haley Chitty, a spokesman for the National Association of Student Financial Aid Administrators. The average debt of a college graduate is about $23,000, making the class of 2011 the most indebted class ever, according to the financial aid website Finaid.org...