Business School with a Family

Early on in 2009, my wife gave birth to our second child. As I held my daughter for the first time, a mix of emotions came over me. On one hand, I was as happy as could be. The Lord had already blessed me with a son, and now He was blessing me again with a beautiful little girl. But on the other hand, I felt a tremendous sense of nervousness. You see, the day before my daughter’s birth, I found out that I had been admitted to HBS. As exciting as getting that news was, it brought with it a guarantee of large scale, disruptive change for not just me, but for my family as well. Up until that point, the change had all been hypothetical; now it was more or less set in stone. Roughly seven months after my daughter’s birthday, I would be transitioning from the active duty Army, moving my now family of four to a new city where we knew no one, enrolling my son in a new school, going from generating an income to living off of student loans and starting a full-time graduate school program while my wife stayed home with our daughter. As I gazed into my daughter’s eyes, the gravity of my decision to pursue an MBA after the military and the effect it would have on my family hit me like a ton of bricks.

I suspect that this feeling of nervousness is common among many of you who have or who will soon have families – and rightfully so. But after graduating from HBS this past May, I can say that the two-years at business school were two very enjoyable years for both my family and me. Many of my friends (both students and spouses) will also tell you that they too thoroughly enjoyed their time at business school. Financially, everything worked out just fine (see my previous post on financing your MBA), I had a lot more time to spend at home than when I was on active duty, and my wife and I were ultimately happy with the decision we made. So was all that worrying and nervousness for naught? I would say unequivocally “no”. It certainly guided us in preparing for the transition. That said, we could have most certainly done things better along the way – beginning in the pre-matriculation period – that would have made our lives easier and somewhat more enjoyable. Below are a few of my lessons learned for making business school work with a family:

Before school:

• Reach out to other new admits with families, especially if your school uses a section/cohort/cluster approach to the first year. In most top-10 business schools, 5% or less of the incoming class will have children, and the all-consuming first year section experience will make getting to know parents outside your section exceedingly more difficult. And if your section is like mine and has only one student with children in it (me), not knowing anyone else in your class who shares that common bond with you can be problematic. Your school will likely set up a Facebook page for the new admits that should be a useful tool to help you identify other parents in the incoming class. Working on building those relationships before school will make those first few months all the more enjoyable for both you and your spouse.
• If you’re considering putting your child(ren) in daycare or preschool, be sure to apply for those programs as early as possible. The good programs on or near your school’s campus will fill up very quickly. If you wait until you actually move to the area, or wait to do it a month or two prior, it will most certainly be too late. Even if you’re waitlisted, being #2 or 3 on the list is much better than being #22 or #23.
• Join your school’s partners’ (a.k.a. spouse/significant other) club email listserv. In the time leading up to matriculation, emails will be sent regarding job openings at the university or in the community in which your spouse may be interested. They’ll also send links to welcome documents and other useful information guides that will help make your transition go more smoothly.

At school:

• Once you get to school, really get involved with the partners’ and kids’ clubs. My wife and I were a bit lukewarm in our involvement early on and wish we hadn’t been. These clubs are a great way to meet and really get to know others in your class who are married with children. Depending on how active you were during the pre-matriculation period, you may have already corresponded with some of these individuals and can thus continue building even deeper relationships. Nevertheless, both clubs are very active and are always planning something (family activities, partner outings, play dates, etc.). Put simply, they are great resources for you and your family and I can’t say enough about them. Think of them as a family readiness group of sorts.
• Treat business school like a job. I got better at this as time went on, but wish I had been more thoughtful about time management in the beginning because it really does make a world of difference. I’m convinced that the best way to be successful both at home and in the classroom is to treat business school like a job. You know your class schedule for the entire semester at the beginning of each semester and can (and should) therefore plan around it. I highly recommend devoting 30-45 minutes every Sunday night to mapping out your schedule for the next week. I used my Microsoft Outlook calendar, but any scheduling system will work. Start with blocking off time for family commitments and work your way down the priority ladder from there. But more importantly, stay committed to your schedule. Doing so will make your life easier and significantly less stressful. My guess is that you’ll be surprised at how much you can actually get done in a day if you’re thoughtful about and committed to your schedule. One caveat about being intentional with your time is that it does tend to remove spontaneity from your life. This is a tradeoff that you’ll have to make, especially in the fast-paced business school environment where it seems like there’s always something going on because there is always something going on.

Fortunately I’m not the first (and will surely not be the last) person to attend business school with a family in tow. The advice offered here only breaks the surface on how to make the two-year business school experience enjoyable for both you and your family. Reach out to alumni who started business school with families to learn how they prepared for and handled things once school actually began. Once at school, talk to classmates with families to learn their tactics for balancing school and home and strive to continually get better at it. With a little pre-planning, creativity, and commitment, I’m confident that you and your family will fondly look back on your MBA experience with tremendous satisfaction.

- Rob C., Guest Blogger and Co-Founder of MilitaryToBusiness: Consulting Service for Top Performers.

Financing Business School

As I’ve mentioned before, a business school education is, at its root level, an investment. Those looking to pursue an MBA do so because they believe that the long-term value of the education is far greater than the up-front cost. The problem is that the majority of us don’t have a couple hundred thousand dollars sitting in our bank accounts to do such a thing. How do we get past that?

Let’s start by digging into the “up-front cost” of an MBA. HBS recently released the Class of 2013 student budget which I’ve included below. This essentially represents the cost to attend HBS for one year (note that the cost for trips to China, Machu Picchu, and/or South Africa is not included). Basing our estimate on these figures alone, 2-years at business school could cost you anywhere from $165,000 - $230,000 depending on your family status. Certainly not an insignificant amount of money!

HBS MBA Class of 2013 Student Budget
	Single	Married/DP	Married/DP	Married/DP
			w/ One Child	w/Two Children
Tuition	$51,200	$51,200	$51,200	$51,200
University Health Services Fee*	$1,186	$3,004	$3,806	$4,210
Blue Cross/Blue Shield (12 months)**	$1,834	$4,518	$6,068	$6,846
Program Support Fee***	$6,390	$6,390	$6,390	$6,390
Room & Utilities (9 months)	$10,800	$16,362	$21,114	$21,114
Board, Personal, Other (9 months)****	$12,590	$16,326	$20,822	$27,040
Total	$84,000	$97,800	$109,400	$116,800

Additionally, it’s also important to note that these cost figures do not include the opportunity cost of attending school (namely the 2-years of foregone salary from not working). For someone leaving the military as an O-3, you can essentially add another ~$150,000 to the mix. While $380K (230 + 150) is far less than the $4 million that Bloomberg Businessweek estimates as the 20-year median cash compensation of an HBS grad, it’s still a sizeable amount – especially for someone who has been earning a military paycheck for the past 3-5 years!

So you find yourself in somewhat of a dilemma: you see the potential benefits, but are also aware that you don’t have a couple hundred thousand dollars lying around to throw toward a business school education.

Fortunately, the path to business school for people in your situation is a well beaten one. There are a number of ways – both general and veteran-specific – to reduce the actual cost to you and, with it, the amount of anxiety with which you enter business school. What cannot be defrayed is either paid for out of pocket or with student loans. Let’s discuss each of those in turn before I briefly discuss how I financed my business school education.

Military Benefits, Fellowships, & Scholarships (funding that does not require repayment)

· Military “Sponsorship” – If you decide to stay in the military, one of the many benefits available to you is 100% graduate school financing. This is referred to as “company sponsorship” on the civilian side of the fence and is a widespread practice used to further develop an organization’s human capital. I had two HBS classmates who were sponsored by their respective branches of service (one Army, the other Navy) and attended school while still on active duty. They continued to receive their military salary and basic housing allowance and walked away from HBS with both a diploma and zero student loan debt. In the Army, this option becomes available to officers who have completed their branch qualifying assignment (usually a company/battery/troop command). Having a conversation with your branch or career manager is a great first step in determining if sponsorship is right for you.

· Post 9/11 GI Bill – This is a huge benefit for veterans who have served on active duty on or after 11 September 2001. As of 1 August 2011, the GI Bill will cover up to 100% of public school in-state tuition and fees, up to $17,500 annually for private schools, and will provide a basic housing allowance stipend at the E-5 with dependent rate (about $2200 a month for the HBS zip code). Depending on the number of months of non-contractually obligated service you have under your belt, your GI Bill benefits can range from 40% (90 – 179 days of Post 9/11 active service) to 100% (greater than 1,095 days, or 3 years, of post 9/11 active service) of the maximum benefit amount. What do I mean by “non-contractually obligated service”? If you graduated from a service academy, for example, you’re contractually obligated to serve 60 months on active duty in order to fulfill your service commitment. Any months served beyond those 60 counts toward GI Bill eligibility. The same logic applies to ROTC graduates. If you attended college on a 4-year ROTC scholarship, you likely graduated with a 48-month active duty service obligation. Therefore, any active duty service beyond those 48 months would be non-contractually obligated service and would count as eligible service for the GI Bill. (Though not yet updated with the new regulations that take effect August 1^st, the GI Bill benefits calculator can nonetheless be found here).

· Yellow Ribbon – Seeing as how most top-tier business schools are private institutions, and charge tuition and fees that (far) exceed the $17,500 private school ceiling discussed above, there is typically a gap between actual cost and what the veteran is eligible for with the GI Bill. The Yellow Ribbon Program exists to help close that gap. Schools choose whether to participate in the Yellow Ribbon Program and the rate at which they’re willing to contribute. The Department of Veterans Affairs (VA) then matches whatever the school contributes. Using HBS as an example:

o A veteran eligible for the maximum benefit rate under the GI Bill would receive $17,500 for tuition and fees as a result of Harvard being a private university.

o HBS, a Yellow Ribbon partner school, agrees to contribute $10,000 for up to 50 veterans each year (a list of the Yellow Ribbon partner programs and their contribution amounts can be found here).

o The VA matches HBS’s contribution of $10,000.

o The total benefit is thus $37,500, plus about $20,000 of BAH for the Boston/Cambridge zip code.

Though the annual cost to attend HBS for a year is a bit higher than the $57,500 benefit amount, the majority of the cost has been defrayed by the GI Bill/Yellow Ribbon contribution. Pretty phenomenal program if you ask me.

· Fellowships & Scholarships – Depending on the school, fellowships and scholarships are offered to students based on either need or merit, or a combination of the two. At HBS, all fellowships (pools of money available to students as a result of generous alumni donations) are entirely need based. These fellowships can range from a few thousand dollars to 100% of tuition. In addition to need based fellowships, other schools incorporate merit into their award criteria. At Wharton, for instance, students can receive full-tuition fellowships based solely on their outstanding record of academic, personal, and professional achievement. Finally, outside scholarships for which you qualify are fair game here as well. One that a few of my veteran classmates received was the Pat Tillman Military Scholarship. Definitely worth looking into.

Savings & Loans

Whatever is left over after military benefits, fellowships, and scholarships have been applied to the cost of your education is covered by you. Personal savings and family contributions are pretty self-explanatory. Graduate school loans, however, are a bit more intricate than they appear at first glance. These loans fall into two categories: GradPLUS and private loans

· GradPLUS – The GradPLUS loan is a loan from the federal government for individuals pursuing graduate education (as the name implies). It carries with it a fixed 7.9% interest rate and a 2.5% origination fee. Clearly the “fixed” nature of the loan is the most appealing aspect of the GradPLUS option. If you’re like me and expect serious inflation to take hold at some point in the near future (while I’m still repaying my student loans), the fixed rate is a pretty good deal.

· Private – During the glory days of 2004-2007, interest rates were extremely low and private loans, the soup du jour back then, were doled out in abundance. Today, they’re still available but are not nearly as ubiquitous. Although most private loans lack an origination fee, they carry with them a floating interest rate. Given the inflation discussion above, it’s definitely something to be aware of.

As for me, I ended up getting fellowship funding, received 40% GI Bill benefits for having served more than 90 days past my 5-year service obligation, and served in the National Guard throughout my 2-years at business school. So when it was all said and done, I walked away from HBS with about as much debt as I expected going in (~$120,000). Considering my family situation (married with two kids) and the fact that my wife stayed home with our daughter who was born a few months prior to business school, I’m pretty comfortable with that number.

As you continue to investigate the business school option, keep in mind that it’s easy to get overwhelmed by the cost and become immediately turned off as a result. Hopefully this sheds a bit of light on how to make pursuing an expensive but worthwhile degree work for you.

- Rob C., Guest Blogger and Co-Founder of MilitaryToBusiness: Consulting Service for Top Performers

“What are the pros and cons of serving in the National Guard or Reserves while in business school?”

I get asked this question a lot, and thought that it might be valuable to offer my perspective on the matter during a time when many officers are in the process of deciding what to do after they leave active duty. As a bit of context, I’m currently serving in the Massachusetts Army National Guard and have done so for the past two years while also attending Harvard Business School. It’s a decision that I would make all over again if given the opportunity, but certainly one that has come with a number of tradeoffs. In what follows, I will list and discuss the key arguments for and against becoming a “weekend warrior” in hopes of helping you make a more informed decision.

Benefits
There are a number of reasons to consider joining the guard or reserves. The primary arguments for joining can largely be classified as a desire to continue serving in uniform, greater stability, and financial.

1. Desire to continue serving - This one almost doesn’t require further explanation, but I’ll throw in my two cents anyway. More likely than not, you’re extremely proud of your military service and grateful for having had the opportunity to develop as a leader while dedicating your time, talent, and efforts to a cause much greater than yourself. But you’re likely also looking forward to your upcoming transition to civilian life and may be wondering whether you’d be all that fulfilled by serving one weekend a month and two weeks a year. I’ll be the first to say that the level of satisfaction I feel from my time serving in the National Guard pales in comparison to that which I felt while serving on active duty. That said, after spending my days in the all-consuming “business school bubble”, it felt extremely refreshing at times to throw on my ACUs and spend time with military folks. I’ve also felt that serving in the National Guard has enabled me to ease into civilian life. As someone who has been affiliated with the Army for his entire adult life, the military was all that I knew and was what I was comfortable with. The National Guard was a way for me to stay connected with the military while also enabling me to pursue other endeavors in my life.

2. Greater stability – Believe it or not, the guard and reserves can provide you with much greater stability while at business school than the IRR. The vast majority of the officers leaving active duty with less than eight years of service do so with an individual ready reserve (IRR) commitment to their branch of service. This is due to the fact that, upon commissioning, all military officers agree to a military service obligation (MSO) of eight years, with some or potentially all of it served while on active duty. For officers who leave active duty before the eight year mark, the remaining time is served in the IRR. And as many of you well know, members of the IRR are subject to recall to active duty in a time of war or national emergency. Seeing as how the US is currently involved with two wars, being recalled while in business school is a very real possibility. Just ask my close friend and HBS sectionmate who received recall orders in November of our first year at business school, ordering him to Afghanistan as part of a Military Transition Team (MiTT). Let’s face it – it’s simply the nature of the beast. By joining the guard or reserves, your unit is authorized to grant you between 12 and 24-months of stabilization (state dependent), meaning that you are guaranteed to not be deployed during that time period. If the state in which your school is located offers 24-months of stabilization, you can complete your degree without having to worry about being recalled to deploy midway through. This was a huge plus in my eyes. Furthermore, as an incentive to join the guard or reserves while still on active duty, your guard/reserve recruiting counselor can offer an MSO reduction incentive which will cut your remaining service obligation in half. That means you could feasibly complete your military service obligation by the time you leave business school.

3. Financial – Though not nearly enough to cover your monthly expenses while in business school, the drill pay you receive each month certainly doesn’t hurt. I, for one, never quite got used to subsiding on not-yet hard earned money (i.e. student loan debt), so earning a little income from serving in the guard one weekend a month felt quite nice.

Tradeoffs
While there are a number of reasons to join the guard or reserves, doing so requires you to make a number of important tradeoffs, as I’ve mentioned. It should come as no surprise to you that the arguments against joining are primarily time related: less time for school, less time for the important people in your life, and less time for you.

1. Less time for school – Maybe it was just me, but I found business school to be a lot more academically intense than I had expected. Many of the concepts, particularly in finance, required that I spend additional time to comprehend them well enough to feel comfortable discussing them in front of my 93 exceptionally bright and accomplished sectionmates. I can recall a few drill weekends in particular (the ones with hours and hours of briefings) where I wanted nothing more than to spend my time re`ding and preparing cases so that I could be ready to go for class on Monday.

2. Less time for the important people in your life – This was a big one for me. As a husband and father of two, making time to spend with my family is extremely important. For me, I treated business school like a job, meaning that the weekends were my opportunity to spend quality time with my wife and kids. Drill weekends obviously reduced the amount of time I had to spend with them and required me to find ways to make up for lost time.

3. Less time for you – As I mentioned, business school was much more rigorous than I expected it to be. Time is your most precious commodity and anything that eats into what little free time you do have obviously has a ripple effect on your ability to devote time to your many duties and obligations. This, of course, pushes personal time even further back on the back burner. At this point, after serving a number of years in the military, we’re all used to putting ourselves last. But if you’re not careful, you will quickly find that you’re being led by your life and not the other way around.

While my National Guard commitment did in fact soak up some pretty valuable free time, I never found it unmanageable. If anything, it made me more efficient and better at managing my time even if was only out of sheer necessity. Thus, my overarching recommendation to you would be to make the decision of whether to join the guard or reserves based on how much you value the benefits of serving rather than how concerned you are with the tradeoffs you’ll have to make as a result.

-Rob C., Guest Blogger and Co-Founder of MilitaryToBusiness: Consulting Service for Top Performers