Hidden Charges - Decoding The MBA Fees

Sep 12, 2017 | 3 minutes |
Let’s get to basics without getting into any lofty verbiage, what is that pressing motivation to pursue MBA? We would get phrases like ‘Growth in Career’, ‘Ending up in decision-making unit’ which is totally correct but drilling down deeper, it is more about the compensation and certain ‘glamour’ attached with the career post-MBA. MBA is a costly affair, barring a few institutions like FMS and IITs, the cost of average MBA degree from a top tier college in India is approx. 16-17 lacs (including hostel, food), but is it the real cost of MBA? Well I would say no, here’s why: WATPI S05 - In-Article Top Ad Cost components of MBA program = Fee + Interest Cost + Opportunity Cost We have already looked at the fee component, let’s look at other components associated. CP DM - In Article (non logged in) So if someone has paid a total fee of 17 lacs for a 2 year MBA program, their interest cost would be anywhere around 2.3 Lacs, making an assumption that fee would be paid in two equal instalments and ROI is 9%. So total tangible cost of MBA is Fee + Interest Cost = INR 19.3 Lac Above mentioned headers are facts, but it is important to decode them and then use it your advantage. In most of the cases, barring the top 20-30% of the batch, MBA is a costly affair for a few years initially, due to high-interest cost and moderate in-hand salaries. So, MBA decision shouldn’t be made just because you are bored out of your technical career or you heard someone getting a 1 crore package straight out of college. Those flashy news headlines or select success stories don’t show you the complete picture. Make a conscious and informed choice! If you want to read about returns from MBA program, please go through this link - Decoding The Average Package Placements and More.