GRE to GMAT Conversion: Why It Can Be Difficult to Compare Scores
If you're considering MBA programs, you should look into the GMAT. Here's how the GMAT differs from the GRE and why comparing GMAT and GRE scores can be tough.
If you're familiar with graduate school requirements, you're probably familiar with the Graduate Record Examination (GRE). What you may be less familiar with is the Graduate Management Admission Test (GMAT).
But if you're considering MBA programs, you'll want to look into the GMAT. Here's why the GMAT is important for business school hopefuls and why comparing GMAT and GRE scores can get tricky.
Why You Can’t Compare GRE and GMAT Scores
The GRE is the entrance exam required for many graduate school programs. MBA programs often require the GMAT or the GRE, but the GMAT is generally preferred.
The GMAT is designed for students who are interested in a graduate business program, but the GRE is geared toward general graduate students applying for anything from engineering to social work.
The GRE and the GMAT are different exams, but both contain analytical writing and quantitative reasoning sections. GRE scores range from 130 to 170, while GMAT scores range from 200 to 800. Because the tests vary so much, you cannot convert a GRE score to a GMAT score or vice versa.
If you’ve already taken the GRE and want to find out what kind of GMAT score you might get, the best method is to take a practice test.
Apply for a Student Loan
Once you’ve been accepted to an MBA program, it’s time to figure out how to finance it. The average cost of an MBA program ranges from $50,000 to $80,000, but that number can easily exceed six figures if you’re applying for a top-10 program such as Stanford or Harvard. There are also a handful of MBA programs that charge more than $200,000 for the full cost of attendance.
Here are your financing options.
Federal Student Loans
Borrowers can choose from two different types of federal student loans to pay for their MBA. The first option is the Direct Unsubsidized Loan, which has a 5.28% interest rate for the 2021-22 school year. The aggregate limit for Direct Unsubsidized Loans is $138,500 for both undergraduate and graduate degrees. If you’ve reached that limit, then you can take out a Grad PLUS Loan.
Grad PLUS Loans always have higher interest rates than Direct Unsubsidized Loans, with a 6.28% interest rate for the 2021-22 school year. The maximum annual limit for Grad PLUS Loans is the cost of attendance minus any other financial aid.
The main difference between a Direct Unsubsidized Loan and a Grad PLUS Loan is that you need to pass a basic credit check to qualify for a Grad PLUS Loan. You also cannot have an adverse mark on your credit report, which includes a bankruptcy, default, foreclosure, repossession or tax lien within the past five years.
If you do have an adverse mark on your credit report, then you’ll need to add an endorser, which is similar to a co-signer. A co-signer will be financially responsible for your Grad PLUS Loan if you default.
Private Student Loans
If you don’t qualify for a federal student loan or if you want a lower interest rate, you can take out a private MBA loan through Juno.
Juno offers private MBA loans with five-, seven-, 10-, 12- and 15-year terms. Borrowers can choose from fixed-rate loans, which range from 2.94% APR to 6.14% APR, and variable-rate loans, which range from 0.99% APR to 5.77% APR.
A fixed-rate loan will have the same interest rate and monthly payment throughout the entire loan term, while a variable-rate loan has a fluctuating interest rate. That means monthly payments can change under a variable-rate loan.
If you prefer to have more stability in your budget, go with a fixed-rate loan. But if you think you can pay off a student loan quickly, you may pay less interest with a variable-rate loan because the starting interest rates are lower.
Juno does not require a co-signer for graduate student loans, but you’ll likely get a lower interest rate if you have one.
All rates accurate as of Dec. 7, 2021.
Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins.
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