MBA Student Interview: John from HBS

Before Harvard Business School, John worked at a financial technology firm in New York. His plan had always been to attend business school, so he had been actively saving with that goal in mind. Fortunately, he was earning about $150,000 per year and was able to put about 40% of that in savings, which set him up nicely for his graduate degree.

Perhaps the one area where John was willing to splurge a little was travel. John was able to travel home to visit his family once a year and take a few smaller trips around the US throughout the year. During his travels, he avoided sacrificing convenience for a cheaper flight. He was happy to pay a little more for comfort and convenience while traveling.

Going into HBS, John had a clear idea of the cost of attendance. He had also made up his mind to save money by staying in a dorm rather than renting an apartment in Cambridge. John knew exactly what his room and board costs would be although the school’s estimates regarding the total cost of living were on the low side. “[There are] living expenses they don’t account for, like how much you spend on eating out or traveling on weekends, I think that was a little bit underestimated by the school.” These are unexpected costs that can add up quickly.

 

Fortunately, for John, he was able to fund his degree through his savings and a personal loan from his family. This helped him avoid interest rate fees and student loans. He also wanted to avoid loans because he wasn’t sure where he would be working after graduation. While he knew he wanted to continue work in the fin-tech space, there was a possibility that he could be working outside the US, which could complicate loan payments.

Throughout business school, John was able to continue to travel, network, and enjoy time out with friends without taking on too much consumer debt. He was able to enjoy trips inside and outside the US. His robust savings account was enough to continue to pay off credit cards on a monthly basis without having to dip into personal investments and other assets.

John always planned to attend business school. A few years before applying, he started saving money in order to cover a portion of his tuition. This gave him a specific timeline for saving money. John was able to establish a budget and save up 50% of his cost of attendance.

 

While John was able to graduate without taking out student loans, he does recognize the value of taking on this kind of debt. “If people are comfortable taking on debt, then I think, maybe, taking on student loan debt then given the interest rates. I think there’s definitely some arbitrage to be played there if you know where you’re going to be working and you know you have a way to pay that debt down. Then I think there’s definitely financial value to be created by taking student loans that the universities offer.”

He also cautions students against getting caught up in peer pressure and overspending when it comes to going out. While part of the MBA program is getting to know new people and having new experiences, it can be easy for spending to get out of control. It is important to go into the program with a clear intention not to get too caught up in feeling like you have to do everything, which is good training for life in general.

Since graduating, John has landed a management consultant role. He is utilizing his degree and earning around $220,000.