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By Dominic Basulto

While the idea of attending a business school in the United States, Europe, or Canada may appear to be an attractive option during the ongoing Russian financial crisis, the harsh reality is that a world class two-year business education has a current price tag (including tuition, books, and housing) of $80,000 in the USA and approximately $65,000 in Europe. Unlike traditional graduate programs in the arts and sciences, where students often expect to receive stipends and full-tuition grants, business schools are typically structured as self-contained profit centers on any campus. It is only those business schools with the largest endowments and/or greatest corporate sponsorship which can afford to subsidize student tuition and award merit-based scholarships. In the US, for instance, students can receive significant loans from both the US Government and from private sector lenders, so American business schools have little or no incentive to offer grants. In 1998, the Economist indicated that 81% of all MBA programs are self-financed, either through personal savings, bank loans, or parental support. If given a choice between two similar candidates, one of whom can pay the full bill, one of whom can not, it is no surprise that a school will give a higher priority to the candidate with a fatter wallet.

Since the prospect of securing an $80,000 loan from a Moscow bank is currently as probable as the Russian government receiving a series of interest-free billion-dollar tranches from the IMF, it makes sense to start tracking down potential lenders as soon as possible. Given the current instability in the Russian banking sector and the perilous state of the Russian government's budgetary resources, Russian candidates are unique in their need to rely upon Western generosity to attend business school. There are currently only two key programs for accessing MBA financing in Russia: the Edmund S. Muskie/FSA Graduate Fellowship Programs (for US schools only) and the ABN-AMRO Bank/EBRD Financing Program (for INSEAD, IESE, London Business School and Michigan only). The Muskie/FSA Fellowship (funded by the United States Information Agency) is awarded through a merit-based scholarship competition. Since the Muskie/FSA Fellowship provides a full-tuition scholarship and a stipend covering living expenses (including transportation to the US), competition is intense. In the current competition, 900 applications across Russia were received for one of the 35 Muskie/FSA business awards. The one drawback to the program, however, is that a third-party selection committee (in conjunction with admissions representatives from sponsoring business schools) largely determines at which business school the award will be used- meaning that the probability of receiving an MBA from Harvard or Yale is small.

The ABN-AMRO/EBRD program is perhaps the best-known to young Russian MBA wannabes, despite its brief existence since 1995. However, the only eligible candidates are those who have already received acceptance letters from one of the four participating schools. Students passing this first hurdle stand a high chance of receiving the highly-coveted loan covering full tuition and jetting off to London, Paris, Barcelona or Ann Arbor, Michigan. Since 1995, approximately 55 Russian students have received the ABN-AMRO/EBRD loan. Recipients are expected to repay the loan within 12 years and work in Russia or Eastern Europe for a minimum of 3 years within a period of 3 years after graduation from business school.

Since the number of students who can access these two primary sources of lending is small, what other alternatives are available to cash-strapped young professionals hoping to attend business school?

One obvious solutions is to APPLY TO 1-YEAR PROGRAMS in Europe or the US. Even 1-year programs, though, are not exactly "bargains." INSEAD, for instance, advises applicants to be prepared to spend $43,000 for its highly-ranked MBA program. Another solution is to OPT FOR MBA PROGRAMS WITH LOW TUITION FEES. Historically, Canadian business schools have priced themselves much lower in relation to their North American competitors across the border. In addition, lower-ranked or smaller MBA programs that do not commonly attract Eastern European or Russian applicants are often more willing to lend money or grant tuition waivers in the hopes of increasing the diversity of the their incoming class.

Another alternative is to LEVERAGE CORPORATE SPONSORSHIP. Until recently, Western firms with a significant presence in Moscow were keen to attract the "best and the brightest" Russian MBA graduates to staff their offices across Russia, and even Central Asia. Firms with deep pockets and a long-term strategic vision for Russia might be persuaded to sponsor the second year of an MBA program in return for the promise to work in Russia upon graduation. Keep in mind that summer internship employers (for 2-year MBA programs) often entice future employees with "loan forgiveness" programs and/or huge up-front signing bonuses- both of which are included in the "average starting salary" statistics in the annual business school rankings. Some corporations choose to sponsor special scholarships at top business schools.

Since most corporations are loath to invest much more in Russia, a better option for sourcing funds might be to ACCESS FUNDING IN DIFFERENT DEPARTMENTS OF THE UNIVERSITY. While business schools themselves are not necessarily willing to open their coffers for Russian candidates, other departments of the university may consider them eligible for additional funding. Someone interested in "international finance" might consider a joint degree in finance and international relations. A school such as Columbia University offers a top-rate finance program and a highly-regarded program in international affairs. For those who are not willing to accept the additional academic burden required of joint-degree candidates, there are often opportunities to work as teaching assistants for the university's Russian/Slavic program or as research assistants in math or physics departments (for those applicants with a strong scientific/technical background at a Russian institute). Large, research-intensive universities boasting well-funded Russian Studies programs may be eager for candidates from Moscow, St. Petersburg, or Kiev. Indiana University, for instance, boasts an impressive Russian Studies program and is a Top 30 business school.

Perhaps the most frequently overlooked way of financing business school is to QUALIFY FOR SECOND-YEAR TUITION DISCOUNTS. Just because a candidate lived in Russia before applying to business school doesn't necessarily mean that this candidate will be classified as "Russian" by the financial aid office for the full two-year program. For example, state (non-private) universities in the USA usually offer significant discounts for in-state residents, with the result sometimes being a dramatic 50% reduction in tuition. The one important caveat is that Russian students studying abroad in the US are quite often denied the requisite documents needed to take advantage of this potential loophole. The same opportunity may be available in Europe as well. At IESE, Russian students entering the second year of the MBA program often qualify for funding from the Spanish government since they are classified as Spanish residents.

For general information on MBA financing, a number of web sites (,, are available as resources. The best recommendation, though, is to contact the business school directly for exact details of both merit-based and need-based scholarships. The leading MBA programs (especially in Europe) are aware of the difficulties posed to Russian candidates and have started to arrange special programs for the highest-potential candidates. For example, London Business School offers the Friends Scholarship; INSEAD offers the Emerging Country Scholarship; IESE offers the IESE Trust Scholarship; and Yale offers the Fox and Frank Fellowships.

Dominic Basulto is a 1998 graduate of Yale School of Management and currently works as a consultant for Pericles ABLE (American Business and Legal Education) in Moscow. Pericles offers a full MBA advising program.

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