Home > Uncategorized > ISB > MBA Entrance  June 24, 2011, by Sam
What is the Real Cost of Getting a PGP from ISB?
ISB is one of the top ranked colleges in the world to get a 1Year PGP (equivalent to MBA). Every year 1000s of aspiring managers and consultants apply to ISB, but only 560 (770 from 2013 onwards) can get admission. There is no question that PGP from ISB is very expensive. But how expensive? We will be trying to find answer to that question in this article.
According to ISB manuals and website the cost if approximately 22.5 lakhs (1 lakh = INR 100, 000). If you attend one of the ISB sessions you will come to know that the main USP of ISB is that you need to forego only 1 years of salary. But is that all? None of the blogs or sites have come up with the actual cost of PGP from ISB. We have spend some time to come up with some case studies.
The simplest way of calculating cost of PGP from ISB is using the formula
Cost of PGP = Tuition Fees in ISB + 1 year forgone salary
We feel this is not an accurate way to arrive at the cost. We need to take additional parameters to come to the exact figure of Cost of Your PGP from ISB. We will be covering the ROI of PGP from ISB in a different post.
Most candidates take educational loan to support the cost. So in addition to Tuition Fees and 1 year foregone salary, we have to add Interest to be paid for Educational Loan and Loss/Gain of interest on you cash (if any). So the new formula to calculate Cost of PGP would be
Cost of PGP = Tuition Fees in ISB + 1 year forgone salary + Interest on Educational Loan + Gain/Loss of Interest on your cash
We will be presenting 4 typical cases to calculate the exact cost of PGP. But before that here are some assumptions.
 The tenure of most education loan is for a maximum of 7 years. We have used 7 years for all our calculations
 PGP expenses is not limited to just 1 year. It is an affair for 7 years (or until when you pay off your loan)
 The interest rate for education loans vary from 11.00% to 14%. We assumed 12% for our calculations.
 Most banks give loan upto 20 lakhs. For our calculations we have assumed 20 lakhs.
 The rate of interest for FD is assumed to be 9% for a tenure of 7 years. This will be compounded quarterly.
 The average experience of a PGP candidate is 5 years earning around 8 lakhs per annum. We have calculations for other salary brackets like 15 lakhs, 10 lakhs as well as 5 lakhs.
 You may get some scholarships ranging from 3 lakhs to 10 lakhs. Scholarship amount is kept out in the calculation because only 100 odd candidates from 770 get scholarships. Get scholarship details from ISB site.
 Inflation and change of interst rates is not accounted for in the calculation.
Before we get into details a typical candidate will need to spend from 31.5 lakhs to 47.7 lakhs to get the costs covered. Surprised? Read on..
Next Page Details of Fees and Other Expenses for PGP from ISB.
 ISB Class of 2013 aspirants  Page 185  PaGaLGuY.com  The Everything of MBA in India and Abroad, CAT 2011, GMAT, XAT, MAT
 ISB Class of 2013 aspirants  Page 184  PaGaLGuY.com  The Everything of MBA in India and Abroad, CAT 2011, GMAT, XAT, MAT
 ISB Class of 2013 aspirants  Page 183  PaGaLGuY.com  The Everything of MBA in India and Abroad, CAT 2011, GMAT, XAT, MAT

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