Welcome to F1GMAT’s #askAtulJose series. March is a time when you have to make a lot of tough decisions on MBA Admissions. Today’s question is a classic one on brand with no scholarship vs. no brand with scholarship. The question is:
Q) I received two offers – one from a top 15 MBA program in the US with no scholarship (4th school from my list) and another a top 25 MBA program with a $25,000 scholarship. Does the 10-position difference have any impact when it comes to branding? My heart says offer one, but my mind says offer two. I am also confused about whether to accept the offer from the top 15 MBA or try next year by reapplying to M7 schools?
Schools that are not in serious contention for the top 5% of the applicants use an effective strategy to gain attention - offer generous scholarships.
Should you consider the offer or move on with the initially shortlisted school depends on three risk appetite questions:
The first question you have to ask yourself while evaluating the risks is:
What is your Dynamics at Work?
To keep your MBA plan a secret requires some next-level self-control and rules of secrecy. Most likely, your core team knows that you are applying. Some level of disengagement at work will happen when the deadlines are near where you have to invest time on the essays. If it is not noticeable, you will be fine. It all depends on the type of boss you have. If you, unfortunately, deal with a micromanager who measures your performance and time logged in to the last second, then the disengagement will be visible and could lead to several conflicts.
I have heard of supervisors acting with a vendetta on candidates they had mentored when the MBA plan is revealed. This is particularly prevalent in traditional industries – Energy, Military, Auto, and the Govt. Suddenly, you will experience disinterest from supervisors in writing your recommendation letters. If that is your case, I would seriously consider accepting one of the offers rather than applying next year.
Start-ups are much more tolerant about your MBA plan as the employees are mostly a transitioning young demographic. However, if you are waitlisted or rejected from your dream school and the only offer that stands are a Top 15 MBA program with no scholarship and a top 25 school with a $25,000 scholarship, the temptation is real. You will start articulating points to justify the compromise.
The second question you have to ask yourself while evaluating the risks is:
What is the cost vs. salary tradeoff?
When the cost difference between a top 5 MBA program and a top 20-25 ranked MBA program is $30,000 per year, self-funded candidates are under severe stress to accept the offer. But they forget that the difference in post-MBA base salary is also in the $20,000 to $30,000 range. As anyone who has been employed in the market would know – your starting salary will determine to a large extent how much you will earn in the next 5 to 10 years. That is a baseline that employers will use when you switch jobs. But we are not naturally disposed to take on debts and think long-term.
The stress is real, and the interest rate could derail your short-term personal plans. So some level of personal sacrifice is required for self-funded candidates. I don’t think everyone is ready for it, and neither should you choose to go ahead with the sacrifice, if you don’t feel that you would be happy doing so.
I have seen in my career planning service when I present the predicament to the client. We always reach a stage where the client has to say – hell yes or absolutely no. The process of decoding the ROI from income to working in a different industry or function during our consulting engagement helps applicants make that decision.
The third question you have to ask yourself while evaluating the risks is:
What would be your motivation if you choose to apply next year?
The pain of going through the same process for another year – essays, interviews, and recommendation letters is a factor that you have to consider. If you are a young applicant in the 24-26 age group, I will encourage you to go through the process. But anyone closing in on 30 should really consider taking up an offer this year itself or applying by Round 3 or an extended deadline.
Does ageism exist in Business Schools?
Perhaps. It is tougher for a 30+ year old candidate to get into a top 5 school compared to a 27-year old.
There is a lot of science behind it. We tend to be adamant about preferences by the age of 30. We have sufficient experience to understand how the job market works and the negotiation process to gain an offer. So schools understand that they can’t deliver on the promise of exceptional post-MBA salary for an experienced MBA candidate in their 30s compared to someone in their 20s. There aren’t that many jobs in the market that would make the older candidates happy with the ROI of an MBA. From a reputational point of view or alumni satisfaction score, it is a bigger risk for a school to accept an older candidate unless the person is from the Military or Non-Profit or a career switcher coming from Entrepreneurship where the baseline salary is way off from a traditional market. If you are an older candidate (30+), I would definitely take the top 15 MBA program with no scholarship. But I wouldn’t stop there.
I would still try to get some form of fellowship, and I recommend that candidates, regardless of their age to ask for additional financial assistance outside of loans once an offer is placed.
