You are not alone in seeking advice from family and friends about your decision to pursue a graduate management education. More than half (61%) of the 16,000+ prospective b-school applicants GMAC researchers surveyed last year ranked family and friends as one of their top sources of information when it comes to planning for b-school.
Enlisting the help of your family makes tremendous sense when you consider that they likely know you best and would be your strongest supporters as you embark on the path to business school.
With that in mind, another conversation worth having together is that of the cost of attendance. Do you know how you will you pay for your degree? Is your family-your parents or spouse-willing and able to help you with your financing plans?
The State of Your Economy
Money is a universal concern. When asked about reservations in pursuing a graduate business degree, nearly half (49%) of all prospective students cited a concern that it will cost more money than they have available, and another 47% worried that attending a program would require large financial debt.
Fortunately, economic reservations about financing a graduate degree have lessened over the past three years. More than a third (38%) of prospective students we surveyed perceived the economy to be stable and strong, a significant jump since the worst of the recession. This means that fewer students globally plan to borrow money to pay for b-school or to apply for grants, fellowships, and scholarships; instead, more plan to use personal savings (47%) and parental support (42%) to help finance the cost of their education.
Globally, prospective students plan to finance about one fifth of the cost of their education through parental support, on average. The percentage of support offered by parents varies by program type (MBA programs range from 6% to 18%) and region (ranging from 11% to 36%). Click on the image below to explore the interactive graphic.
Five Points to Discuss with Your Parents
If you think you might be recruiting your parents to help finance your education, consider using some of these talking points to show them how earning a graduate business degree will be a smart financial investment in your future:
Do the Math
- Nearly 9 in 10 members-86%-of the Class of 2011 alumni whom GMAC surveyed in September reported having jobs after graduation.
- A 2011 year-end GMAC poll of employers revealed that 74% of employers plan to hire MBAs in 2012 (up from 58% in 2011), 59% plan to hire graduates of specialized master's programs (up from 38% last year), and 51% plan to hire Master in Management graduates (up from 36% in 2011).
- Alumni from all b-school program types in the class of 2011 reported an average one-third return on their financial investment in their graduate degree within the first year after graduation. Alumni from the Class of 2007 reported a full return on investment (ROI),on average, just four years after graduation
- The median annual base salary for all full-time MBA alumni from the classes of 2000 to 2011 was US$95,000.
- Global demand for graduate management education is rising: Both registration and testing volumes for the GMAT exam are at or near all-time highs. This reflects the growing marketplace demand for workers with advanced business degrees.
For help calculating what you can afford and where you source of financing will come from, see the article, Figuring Out Your Finances, and read more on assessing your return on investment. Be sure to share these links with your parents to show them how an investment in your education will pay dividends for your future career.