My dues are paid
INTRODUCTION
As a mechanical engineer, I knew that completing an MBA would be a great way to, extend my knowledge, advance my career, and open new opportunities. However, financing a master’s in business administration (MBA) can be a daunting task, especially when it's a full-time program. In this blog post, I will share my experience of repaying a six-figure student loan to study an MBA at IESE Business School in Spain, including the challenges I faced and how I overcame them. Today, I am proud to say that I have completed the last payment and am free from this financial burden, three years in advance of what was contractually established. While I am grateful for this accomplishment, I also acknowledge the support I received from my family and friends all along the way.
THE BEGINNING
Financing an MBA in Spain was not easy, especially for someone without any kind of scholarship nor sponsorship. My parents always offered support, yet this was my own personal investment choice. It was always very clear to me that I would finance the MBA myself using student loans. I had to take out a six-figure student loan to cover the tuition fees, accommodation, and living expenses for 19 months. If you want me to be more concrete, I calculated I would need €140,000. As the MBA was a full-time program, I did not have a job to support myself during the program except for a 3-month internship at Amazon. Thank goodness for that, as it helped me get through unexpected cash shortages.
When I applied for the loan, it was all perks and cuddles from the banks. I had to take two different loans, as individually the banks, CaixaBank and Banc Sabadell, could not cover my forecast. This would mean double the struggle. Given my Spanish nationality, I am thankful for the terms and conditions of both, CaixaBank and Banc Sabadell: low fixed interest rates at 1.8% and 2.0% respectively and an 2 + 7 year repayment period (repayment starts two years after the loan has been signed with a repayment period of 7 years after that). I know my international classmates faced heftier interests. The conditions for international students (non-Spanish) may be different at the two bank entities I have mentioned.
THE STRUGGLES
One of the significant challenges I faced was managing my finances and learning to deal with the ever-popular FOMO (fear of missing out). As a full-time student with no job, I had to live on a tight budget. There were times when I could not afford to indulge in any recreational activities, and I had to prioritize my needs over my wants. This meant carefully picking which social events to attend, when to eating out, and carefully monitoring my expenses on anything that was not essential.
The greater challenge was when I wanted to access the capital, I would have needed for the second year of the MBA. CaixaBank and I had signed a €95,000 student loan, €80,000 would be allocated to tuition fees and the other €15,000 to living expenses. After arduous email exchanges and with a not-giving-up-easily attitude. I was denied the €15,000 that had been initially agreed and signed. During an MBA you learn to juggle many balls at the same time: schoolwork, networking, searching for jobs, interviewing for jobs, life in general, etc. CaixaBank decided to throw at me an additional €15,000 ball.
THE STRATEGIES
Despite the challenges, I was determined to repay my student loan and achieve my financial freedom. I came up with a few strategies that helped me manage my finances and pay off the loan.
Firstly, I created a budget and stuck to it religiously, for the most part. I calculated my monthly income and expenses and made sure that I did not overspend (for the most part). I tracked my expenses and identified areas where I could cut down. This allowed me to save some money monthly, which I used to make extra payments towards the loan.
Secondly, I took advantage of the opportunities provided by the MBA program. Although I did not have a job during the program, the program offered several internships and job opportunities, which helped me earn some extra income. I am very fortunate to have been given the opportunity to join a leadership rotational program at Siemens. I am eternally grateful to Karinna Rojas, who spotted my CV and gave me a chance to interview to join Siemens, which has been paying my salary, and indirectly helped me return the capital that I was loaned.
THE SUPPORT
First and most importantly my parents. They were there every step of the way. From the moment I opened my bank accounts at CaixaBank and Banc Sabadell, until today, the very day I repay my debts in full. They incessantly offered to lend me the money. I incessantly thanked them for their generosity. My ego always creeped up to remind me: “This is your project. This is your investment. Your parents have covered you for long enough.” They understood the importance of education and supported me in every way possible. I am immensely grateful to them for being my rock and helping me through the tough times.
My classmates and friends also played a significant role in my journey. They provided me with emotional support and motivation and helped me manage my workload, activities, and drove me to the finish line. We formed study groups, worked on assignments together, and celebrated each other's successes.
CONCLUSION
Repaying a six-figure student loan was not an easy task, but it was worth it in the end. The experience taught me the value of budgeting, planning, and perseverance. If you are an MBA prospect or an MBA student, how are you financing your MBA? What challenges have you faced or are you facing?
