For a moment let’s not concern ourselves with the $100,000+ tuition price tag or the 2-years of forgone salary. Simply preparing for, and applying to, business schools could cost you thousands of dollars!
With the top 10 business schools accepting 25% or less of applicants into their programs, competition will be fierce. Faced with only a 1-in-4 chance of acceptance, wouldn’t you do [spend] whatever it takes to increase your odds?
Applications consist of four main aspects: GMAT, Resume, Essays, and References. While there aren’t any “reference-for-hire” services yet, there are plenty of resources for the other three.
First, the GMATs. Going at it alone may only cost you $100 worth of books, or you may even be lucky enough to find them at the library for free. However, paying for more catered preparatory services (online review sessions, in-person classes, boot camps, advanced strategies, and private tutoring) can range anywhere from $1,000 – $5,000.
Then there are the consultants who perform cradle-grave services fFrom performing initial “likely candidate for…” evaluations to reviewing rejection letters. These consultants are here to help you at every turn… for a price.
Most of these can be purchased as single options or at hourly rates. Not too bad if you are confident with 90% of your application and are looking for a minor checkup or professional feedback from someone other than mom & dad. ;)
Using the premier Veritas Prep for pricing, a complete package will run you anywhere from $3,700 to $11,400 depending on how many schools you apply to (1 to 8, respectively). Add that to our original GMAT prep courses, don’t forget to add the school’s application fees, and you may be confronted with a $15k+ bill… even before you’re accepted – which you may not be!
No Debt MBA thinks these consultants aren’t worth the cost, and may have the defense to support his thesis. He got into a top 5 business school on his own accord.
What if you don’t want to deal with the hassle of doing it all on your own? The novelty isn’t there when you consider what other services people pay for (tax preparation or estate planning). Venturing solo into these areas isn’t unheard of, yet many people seek the guidance of someone who understands how to navigate all the nuances of “getting it right”.
For those applying to an unranked business school, the costs probably aren’t justified. But for those straddling the different brackets, the potential return could be huge. Since there isn’t much disparity between the tuitions of top programs (also for resident or non-resident), your front-end investment into a consultant should be measured at the completion of the program.
The average starting salaries from a top 5 program are generally 10% greater than those graduating from a top 10. The salary gap widens even further when dropping down to a top 20 school with starting salaries off 20% from those within the top 10. This means forgoing the $10k in consultant fees could be costing you 3x as much in potential income!
Not only does the income differ, but the number of offers increases the higher up the tiers you climb. Better securing employment in the future should be a careful consideration in the equation. Saving $10k now won’t seem like a big deal when you aren’t able to pay off those $100k student loans!
Since the purpose of business school is to learn about the aspects of business, applying to these programs should be addressed with a business-like perspective. This may mean outsourcing some of the workload and paying for operations which could increase returns, but are not guaranteed, like application consultants. But maybe you have to pass Risk Analysis first in order to really understand & apply it. ;)
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.