How much to save for MBA in the USA for your child?
In the previous article, we discussed can we really do MBA in the UK for under Rs 25 lakhs. In this article, we will talk about how much to save for MBA in the USA for your child.
The USA is the number destination for MBA but this course comes at a high price! Most MBA universities charge thousands of dollars in tuition fees and on top of that, there is the cost of living but there are many ways to reduce these costs.
From scholarships to fee waivers to exploring savings opportunities, here is how much to save for your child’s MBA in the USA!
What is the cost of applying to study in the USA?
Before you start putting together the list of things your child will need for the overseas trip, here are a few things for you to consider. Prior to applying for admissions to any of the universities in the USA, these are the expenses you must allow for:
|Category||Average Amount (in INR)|
|USA Visa Application||0.12 lakhs|
|SEVIS Fee||0.27 lakhs|
|TOEFL Exam Fee||0.13 lakhs|
|IELTS Exam Fee||0.15 lakhs|
|Airfare||0.45 lakhs to 0.85 lakhs|
Add to this the cost of coaching and counseling required to crack the above-mentioned exams with good scores to enable you to get into the university of your choice.
Planning for your MBA studies overseas must start at least a year and a half in advance. Check the intake period of the various institutes and ensure the applications and paperwork submission is aligned to the same.
MBA fees in the USA
Once you have initiated the necessary exams and eligibility procedures, the search for the university that fits into your budget begins. MBA courses in the USA range from one year full-time to 2-3 years part-time or online programs. The average fee for an MBA course from a reputed university typically costs around USD 60,000 and can go up to USD 100,000 for the Ivy Leagues.
This translates into Rs. 45 lakhs to Rs. 75 lakhs in terms of tuition fees. Further depending on the university, the location, and the individual lifestyle of the student, the annual expenses can range from Rs. 13 lakhs to Rs. 40 lakhs.
As you can see, if you are looking to send your child to the USA to pursue MBA, you will need to cough up approximately Rs. 1 crore for the entire duration of the stay. This can be backed up by part-time jobs, campus jobs and of course, scholarships offered by the universities, by the US government for international students, and also independent scholarships offered to Indian students.
How to create a financial plan for MBA in the USA for your child?
In light of the corpus required to do the MBA in the USA, planning your funds well in advance will help your child pursue this dream with ease. Here are a few tips that can help you get started early as you make the plans for your child’s MBA studies in the US:
1. Start a college fund as soon as you decide on this goal: ideally having a 10-15 year investment duration is great. If you don’t have this time, start immediately as the corpus you will need is substantial.
2. Depending on the time horizon of your investment, here is how you will need to invest:
- Long-term (10 – 15 years duration): High risk and high return investment in equities
- Mid-term (7 – 10 years duration): Balanced investment portfolio with 65% in high risk, rest in debt instruments
- Short term (3 – 7 years duration): Low risk, secure, low returns investment in debt instruments. The key is to keep your capital safe and your investments high. You can develop a more refined approach to investing with the help of professionals who understand your financial situation as well as your financial goals.
3. Follow a disciplined approach to your savings and investments.
4. Take the benefit of compounding growth of investment when you start early and do not dip into the college fund. Protect this fund as the dates for admissions are fixed and falling short of the required amounts will mean you may have to compromise on the institute/course that the child is opting for.
5. Regularly monitor your investments and realign these to ensure the corpus is building up towards your target amount.
6. Keep a watch on the universities that you plan to apply to, and watch the changes in their international student policies and fees.
7. Start your research early for the scholarships available, tracking eligibility and ensuring your child achieves the academic scores needed to apply for these, should the need arise.
Sending your child to the US for higher studies is a serious and long-term project. Start early and stay on top of the funds. This will make the entire experience of overseas travel and study a truly enjoyable one for your child and your family!
Consult an expert advisor to get the right plan for you
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