MBA申请中的几大误区(一):学费重要吗?

newboyss

NO! Here is why. I give an example using HKUST and NUS.

Suppose that you pay 240, 000 yuan to go to HKUST. (This is made up but it is in the ball park.) suppose that you are 28 years old. your life expectancy is 88 years. For the sake of simplicity we assume that you can get a zero interest loan for 60 years. (results will be more complicated but the logic will be similar and the conclusion will be the same for non zero interest rate). This means that you will have to pay 240,000/(60x12)=333.33 yuan each month.

Suppose that you will get paid 240,000 yuan after you graduate every year afterwards and your pre-MBA salary is 120,000. your improvement each year is 120,000. every month you have increased your payment by 120,000/12=10,000. The improvement is 9,666.67. You can see now why the tuition should only be of your secondary concern as it is only 3% of your monthly value added.

Suppose instead that you can go to National University of  Singapore for a cheaper tution, let's say it is really cheap, for example half of the HKUST tuition, 120,000 yuan. which is 120,000/(60x12)=166.67 yuan each month. after you come out of that, you can get a salary of 230,000 yuan close to what you would get from HKUST. You feel really happy but you are wrong in financial terms. your income has increased each month by (230,000-120,000)/12=9166.67. subtract the 166.67 loan, you get 9,000 yuan. Even though NUS is half as cheaper, if you look at your monthly income after subtracting the tuition payment, HKUST is 7% better.

What is the reason people can not think this through? The mistake people make to think too much about tuition is that they do not realize the fact that you pay tuition only once and your benefit from a better education for your lifetime.

Of course I have made some simplifying assumptions but the intuition is clear. Never care about tuition and you should go for the one you like the best.

[此贴子已经被作者于2007-3-13 0:39:52编辑过]

honson

As some had discussed here before, we need to consider living cost, opportunity cost and etc..

In my opinion, money is very important except we just have the impulsion to the school without rhyme or reason. In marketing, no matter 4p, 6p, 7p, price is the second important matter just after "product". Almost all enterprises in China join the fight of price. Doesn't it mean something?

I still insist that we need to choose the right b-schools which have strong impacts in where we plan to develope our career, then think about the price, ROI...

However I have the interest to read more of your ideas.

[此贴子已经被作者于2007-3-13 18:33:58编辑过]

amorhuh

To me, tuition is vital. I have to control the cost of studying.

newboyss

I am not saying that you should put zero weight on tuition. I am arguing that tuition is probably about 3 % of the value added from your education and thus you should consider other important things first. You will learn about this in terms of Net Present Value for investments when you go to business school.

klipper

The owner of this forum decided to put a smile at the start of every message. Honestly it's the first time I really laughed before writing a reply.

I think newboyss are really good at caculating numbers. However his theory is slightly flawed. I totally agree that investing on yourself is a very smart choice to make. The point is you try to dramatize the befenits by carefully selecting the numbers and the way of calculating it. The gap between the after-MBA salarys of two programs is NOT as "close" as you put it. If you are way smarter than me, you will find out that's (240,000 - 230,000) x 60 years = 600,000. ( I am stupid in calculating. I need to pull out my little Casio calculator to get the answer ) That's a lot more than tuition's gap.

I believe "Roughly Right is Better than Precisely Wrong." You don't need rocket science to make your decision. What you need is common sense and listening to your heart. There is a very developed and mature loan market in USA. You really don't need to worry too much about your tuition. But here in China, I think most MBA candidates would use their saving account or even borrow money from family members. So to them, Money is a big thing and they need to compromise. I went through one post says some young gentlemen would finance his MBA by stock trading. Good luck to him.

By the way, you really like HKUST. Are you are one HKUST graduate?

Peace.

wilsonfeng

Without detail view, but I want to say, in China, the status should be much different from the status in USA. I am the guy who is worrying my tuition, I don't want to borrow any cents from My parients, but one time payment drop me and my wife and baby daughter into trouble. Of course, there will be solution with this issue, so before my application, I calculated carefully my pocket, and choose the right school according to my career plan, and then Money is no problem, and solution is on the way...  

davidli8888

In my opinion, the financing is as important as the total attendence costs. Affordability includes if you can access the study in cash flow terms. Both HKUST and NUS need cash outflow. And that presents some problem for some otherwise qualified candidates.

One explanation for the hot applications to US MBA programs is, the availability of flexible financing programs. You know you will pay a dear price for the biggest human capital investment, but you also know you can access, and in this sense, the study is affordable. Brightest people first come to USA for a dream, even though they have no money at hand NOW.  

To compete for the best minds, non-US MBA schools have much to learn a lot from USA counterparts. No best student body cannot make any schools best. Best students bring fame to schools, as they can make success even at ANY schools. CK apparently understands the critical logic then, given the strong financial backup from the business tycoon.

[此贴子已经被作者于2007-3-24 11:59:37编辑过]

dayuanwang

哇，还是亚洲版牛，整面的E文