Part I: Why I did an MBA abroad
Part II: Where should I do my MBA?
Part III: Making the decision

Today, an MBA has become an entry ticket to a job in India. Almost every graduate, unless he/ she has a technical degree, is required to have a management qualification to be considered eligible for any meaningful role in the corporate world. Where aspiring students a decade ago were greatly constrained by the relatively small number of B-schools in the country then, candidates today have no dearth of options to choose from.

The supply of management education has come up to match demand at a fantastic speed over the past seven-eight years. While the quality of this additional supply might be questionable, the cost of this education is still high and increasing each year.

Yet, when one compares the cost of doing an MBA in India versus that abroad, the difference is an order of magnitude, suggesting the degree to which management education in India might be subsidised, or the degree to which it is over-priced abroad.

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My first exposure to this variation in costs came long before I had even thought of studying abroad. When I was in my first year of degree college, I visited an MBA education fair conducted by leading UK universities, at the World Trade Centre in Mumbai. In addition to familiarising myself with curious English county and province names, I learnt that management education is far more expensive outside my own country.

I believe I had silently agreed with myself then that I would focus solely on the top institutions in India rather than worry about raising funds for an MBA abroad. Little did I know that my attitude was to take a complete U-turn a few years hence.

One of my major criteria for shortlisting a foreign B-school was the finances required. There were three categories of financing required:

• Programme-related: These were the tuition fees, the living expenses, and the medical insurance (mandated by some countries).
• Application-related: These included the testing fees for GMAT and TOEFL/ IELTS, the prep material for the tests, cost of an application for each B-school, cost of transcripts and attestations, scholarship/ loan documentation costs, courier/ postage charges and stationery.
• Visa-related: These were the visa application fees, documentation costs and liquidity maintenance costs.

I decided to determine the timing of my application based on the overall financial attractiveness of each school. Almost all US schools gave me tremendous heartburn in this respect. From the brochures and the alumni reports, many of them seemed like great places to study, with several 'fun' ways to develop personality but, alas, the more 'happening' they seemed, the less my pocket felt able to support their costs.

Again, the predominant two-year format across the schools made the opportunity costs high. Secondly, there were ridiculously few financial aid options that an Indian student could avail himself/ herself of. Dependence on a slight chance of a teaching assistantship coming by (only in the second year of the programme) did not seem like a good idea.

Thirdly, the prospects for employment in the US post-MBA were not looking rosy due to tightening visa norms. I worried that I may not have the chance to recover my investment... if at all I managed to put in the money in the first place.

The European schools offered a via media in the case of tuition fees due to shorter programme durations and hence lower costs. Yet, the total programme-related outlay for a school would still be about two-thirds of that for the average US school. Again, the cost of an application, though a small drop in the ocean of expenses, was higher for European schools.

Also, the visa norms for Europe were not just stringent, but also rather difficult to satisfy from the perspective of a long-term work opportunity. Given the tight visa regulations and high liquidity requirements for Australia [Images], I had already demoted Aussie schools in my priority list.

I figured that if I applied to my high-priority schools early enough in the admissions cycle (most schools have at least two and at max four rounds of applications; some others have rolling admissions), then based on the responses, I would know which schools are definitely meant for me or not (and vice versa). That way I would not be putting all my application resources at stake at once.

Once again, I used a loose model (this time without an Excel worksheet!) to decide which schools I should apply to and when. The first pass had to be the affordability of the programme itself. Singapore and Europe led the race here. Living expenses only marginally impacted this score in all Western cases.

The second stage was ease of obtaining a visa. The US and Australian schools fell back a bit on this count. The final pass was the costs of applying. Since costs of test-taking, transcripts, attestations and documentation were distributed across schools, I did not consider these aspects. The top priority schools soon miraculously emerged.

The schools that made the cut then for applications in the first round were the two UK schools, Oxford and Cambridge, which offered loans through tie-ups with regional banks based simply on acceptance of a candidate to the programme, UCLA in the US, because the timing made good sense, and NUS at Singapore, because it was the easiest on the pocket. I decided to phase out the remaining four schools similarly over two more application rounds, all the time hoping that I would never have to resort to them.

I received a lot of questions about how I was managing the funding from peers who had already been through the rigmarole of an MBA. Since many of these were the MBA (Finance) types from the good ol' IIMs, the typical questions tended to be, "Have you calculated the expected Return on Investment?", or "Have you done an NPV analysis of this project?", or "What do you estimate will be the payback period for this investment?"

When faced with such a barrage, I would usually just smile back valiantly and propagandise the power of optimism. Honestly, for all my analytical skills and consulting orientation, this was one area about which I confessed (secretly, of course) complete naivete. I knew that I was too far gone to turn back. I also knew that I was sincere and would make it work any which way. I surrounded myself with people who believed likewise.

That's not to say that I distanced myself from the cautious types. There were no naysayers in any case. The time was ripe for getting back to education. The signs of recovery of the economy were apparent on the horizon. If all went well, I would be in form to catch the trend on the upswing. Of course, I had set some sort of a monetary floor below which any outcome of the entire effort would be unsatisfactory even to me. I was certain that if I came back to India to work soon after the MBA, then I would be able to command a price at least five to six times that at which I left for the MBA. If I landed the right opportunity within the destination country then, of course, I would not expect anything less than the average payoff for a graduate.

However, I did not want to be vain and measure my success only in terms of the $$$. The high price I was willing to pay had a lot more to do with the exotic learning environment, the diverse peer group, the wide alumni network, and the surrounding opportunities of living in a foreign location, than simply with the technical knowledge provided by the syllabus and the immediate job opportunities. Undoubtedly, there was no easy way of measuring the ROI on these aspects.

I eventually applied to three schools in the first round, the only round, and got accepted at two of them. Funding woes sorted themselves out after a little running around domestic banks (where Loan Officers found it hard to understand why anybody would be mad enough to spend more than Rs 30 lakhs on any kind of education, let alone an MBA; they entertained me nevertheless, fascinated by the Oxford brand).

A benefactor presented himself just in time to help me tide over the deadline for final acceptance at the school. A small scholarship came my way and provided for the peripheral expenses. A term deposit matured just in time to ensure that my terms at school would pass without a (financial) hitch. Overall, it was a story with a happy ending, or a happy beginning!

Looking back, there has not been a single moment that I have regretted having made the choices that I made -- whether it was the choice of going abroad, or going to Oxford, or coming back to India thereafter. The MBA did pay for itself. And I sense that the payoff is not finished yet.

This article from TestFunda.com is the third in a series of five articles focussing on pursuing an MBA abroad. This article has been authored for TestFunda.com by Maithilee Shirgaonkar, who has done her MBA from Said Business School, University Of Oxford. TestFunda.com provides complete, comprehensive online preparation for CAT, XAT, FMS. In addition to solved papers of last three CATs, the user friendly website has free iCATs, puzzles, Question of the Day, Daily Vocabulary List, Interactive Learning Games and Ask-a-Doubt.

Part I: Why I did an MBA abroad
Part II: Where should I do my MBA?
Part III: Making the decision