UNDERGRAD: How Much Debt Is Too Much Debt
Hello All,
I'm currently a senior in highschool who received admittance to NYU where i would take Economics in the College of Arts and Sciences. I am a URM from south New York, and you might of been able to guess, will have some serious trouble affording NYU. You probably already know that NYU is notorious for terrible financial aid.
I'm looking get into Asset Management and Equity Research. Hopefully after some experience I can make the jump to the sell side.
Obviously I'm going to have to take out loans. My parents can pay a little but not much. I didn't want to pass more than 50k because it would be some where around 80k cash I'm paying after( correct me if I'm wrong). Now I'm thinking maybe I should take out around 70-80. I'm just afraid that if I take that out, and I get into Equity Reaserch that I'll be paying off this money for a long time. I don't want to have this on me for forever (even though ER pay is pretty nice). What do you guys think? Is 80k worth it/too much? All advice is much appreciated.
80k total is not that bad. My parents paid roughly $80k for my 4-year undergrad education
If you're on WSO going into it; then I would say that 80-100K is the upper limit.
For those who don't know about careers like you learn on WSO then I'd say don't pass 50-60K.
Rule of thumb is to not take out more than 100% your starting salary coming out of school. Since most finance jobs will be roughly 50-60K and high finance approaching 6 figures I'd say that your 80K number isn't too bad.
Did you get into any other schools? Do you have other options?
mrharveyspecter Thanks for the response. I got into Fordham Gabelli School of Business also. I haven't heard back from their Financial Aid office yet. NYU Is really my dream school though.
Go to Fordham. NYU is saturated.
That's a lot of cash.
ConPanna Right, I'm just afraid that I'm going to be overwhelmed with having to pay back that much cash. Like if I'm paying it off relatively quickly, how long is it going to take me to pay that off?
80k isn't the total is it? You mean 80k per year?
80k for NYU ain't bad. Sure, it'd be better to owe 80k and have an ivy league school on your resume but that's not always an option. I'd rather owe 80k for NYU than 30k for Fordham.
I mean, unless you have rich parents or got a full ride, I don't really see any reason to choose Fordham over Baruch.
Pokemon Master Wow thats a strong statement "rather owe 80k to NYU than 30k to Fordham" (thats really potentially what i'm going to face)
I didn't really think Fordham and Baruch were that comparable. I thought Fordham business school was significantly better than Baruch.
My apologies. I skimmed over it before. I thought we were talking about NYU Stern vs. Fordham. I stand by the above statement for Stern or if you have a decent shot of transferring into Stern.
IMHO, Fordham and Baruch are very comparable. We can bicker about which one is better, but the price difference is fucking huge. I'd bet Fordham is more fun though.
I would hesitate to take on anything greater than $60k. I'm generally fairly risk-averse though.
$80K is definitely steep but I would say its worth it for NYU. If you do well at NYU CAS you will line yourself up very nicely for a top finance job (AM, S&T, ER, IBD). You might also be able to transfer into Stern because they like internal transfers more than external so provided you do well a transfer is also possible
NYU get's an inredible finance recruiting so I would definitely go there
qwertyzxc Thats the plan, but i think I might look to do 60-70, 80 is kind of a lot, especially when its time to pay it back.
Not to sound inconsiderate but you really shouldn't fret over 20k - 30k when you are talking about these kinds of jobs where the ceiling is very high.
You will be able to easily pay that off $80k less than 5 years after graduating if you are able to land a top finance job and the chances of you landing one is much much higher from NYU than from Fordham. If you start prepping as soon as you get to school meaning you keep a GPA above a 3.7 or 3.8 from CAS, do some relevant internships, get involved on campus, and you will be well on your way to getting a top job in field of interest.
It is very possible to get it done from Fordham as well but it will much harder. If you are getting a full ride from Fordham or only have to take out a nominal amount 10 k- 20K you should take that and just really crush it there and transfer after a year or two or try to network aggressively and intern during the year at Fordham which is still possible to do.
Any other options than Fordham and NYU? I graduated with no debt and paid all my loans while working full time during college. As a risk and debt averse person I'd recommend taking the least burden. NYU might be worth it but you will be repaying it for quite a few years if you want to enjoy life in NYC.
CFACandidateLevel1 How did you manage to work full time during college?? I got into Manhattan College and i bet i could get into Baruch, but I mean placement isn't really comparable to NYU. I would assume breaking into AM and ER is still pretty competitive so I need all advantages possible. Maybe I'd try to work during college but Id like to focus on my studies. - I see you're in AM, any advice? what major were you in undergrad?
Finance, Econ and Math and I did work in the industry during school year and all summers. Its tough but doable.
qwertyzxc dedline thanks for your responses guys, guess I'll be taking out a crap ton of loans for NYU, but one more question: if I do get into Equity Research out of undergrad, how much would I be looking to make? This is for a pre MBA ER associate 1st year
I thought ER was a position within the Asset Management division of a BB? Am I wrong?
Thanks guys
Congrats on NYU - it's one of the heaviest recruited schools for UG finance positions and you definitely made the right choice.
Just keep your grades up and hustle to grab internships early and you will be fine. Have some fun and get involved on campus about things you are passionate about as well.
For ER/AM you can expect same base salary as IBD but maybe a 30% discount on bonus. You'll be clearly six figures for most FO finance roles. Where ER is situated depends on the bank.
I didn't realize being $68k in debt was considered "atrocious" for an undergrad degree... (Originally Posted: 05/18/2011)
...until I graduated from UPenn this month and overheard a guy telling his friend "I'm graduating with 33k in debt" and his friend said "HOLY SHIT THAT SUCKS!!! WHY DID YOU COME YOU UPENN WITH THAT KIND OF DEBT?! I only came because my parents paid mine off and I'm graduating without any debt"
So yea...i graduated with ~68k in undergrad debt. I had no idea that was bad. Maybe I need a dose of reality. So comment away!
Well if you get a banking job you'll have the means to pay it off, but even then you're going to have to sacrifice.
thank you jeff skilling for taking the time to respond to my question from your jail cell :)
Sell your cock, its gotta be worth something. I wouldn't expect much though
$68k ain't that much in the long run of things. Now go make some money.
If you headed to banking don't worry about it man. You'll pay it off before you know it
Most kids I know graduated with around 100k in debt. There's this kid I know and once he graduates med school he'll be 500k in debt (ugrad and med school). Sucks to be him.
You have to spend money to make money. Don't lose sight of that. Thought $68,000 in debt might seem heavy now, 15 years from now when your hedge fund is earning multiple offers you'll reflect and be glad you spent $68K (and likely you'd be willing to do it again!)
Exactly. As long as you put your degree to use, you should be fine.
The average undergrad student loan debt is $23k at graduation. $68k in debt isn't terrible considering you went to upenn. You'll be able to earn yourself out of that hole pretty quickly. Ivies are an investment in your future.
Lol these comments are exactly the reason for the massive ammounts of student debt in this country.
http://www.wallstreetoasis.com/blog/the-student-loan-bubble
Baffles my mind that people think becasue they went to an ivey league school that 100k in debt is an "investment" in their future. I undertand not everyone can afford college without debt, but if that is really the case is the extra 80k in debt worth it over your state u? If were driven enough, you would become successful from bumbfu*k state.
fml I sound like IP. I swear I dont live in hoboken
Just out of curiosity, with that much debt already would you consider taking on more debt and going to get your MBA or some other Masters?
I had $20,000 worth of debt in completing my undergrad and masters.
Honestly, from what I read around various forums, that seems the norm. It all balances out I guess once you get the right job.
UPenn is a great school so consider it an investment.
Dude, you went to fucking UPenn, you've got nothing to worry about.
Congrats on the Ivy League degree!
Depends what it is comprised of. Government subsidized while you are in school and only carrying 6% after graduation isn't a big deal. But if you're paying credit card rates on that, better hunker down for the next couple years.
My friends have student loan loads anywhere from 20k through 70k. None are having issues making payments and a few have paid off completely. Obviously this is a biased sample - everyone of them majored in something relevant (no art history majors with 100k debt) and the ones making payment work in finance making at least 65k. Your 68k debt load means that you are looking at around $700 in monthly payment. That can certainly be done if you break into IBD/S&T (which shouldn't be tough coming from penn). Ya, you will not save as much as someone without student loans but you will still live a decent lifestyle.
Personally, I graduated with 35k in debt (I personally covered most of my education) and I am not worried. My monthly payments will be around 350 which is very reasonable considering I got a top-10 degree. Much better than having an under water mortgage like most households. One decent bonus year and I can wipe that debt loan clean. Just be responsible.
Is the debt of certain undergraduate degrees worth the reward? (Originally Posted: 04/02/2014)
Hello all, I'm posting to figure out if the debt acquired at a larger business school is worth it.
I'm currently in the Air Force with roughly a year left and I've nearly completed my sophomore year at a local college. I'm looking to get out and start a career in the Finance field (Specifically Investment Banking). I have the GI bill which pays for in-state tuition for public universities. My home of record is Florida so I could go to USF, FSU, UF or Miami for free basically. Would a undergrad degree from one of these schools be sufficient enough to excel in the finance world, or would it be more beneficial to aim for a better school and accumulate a bit of debt?
Also, do you think Military experience will help out in any way with transfer college admissions or job applications?
Thanks in advance for the help!
If you're looking for BB, I don't think any of those are target or semi-target and would be pretty hard to break in. I interned at a BB this summer and looked at the list of our analyst class and what schools they were in. None of the summer analysts or summer associates were from a Florida school. You might have better luck with a Florida based school in a regional bank, something like SunTrust out of Atlanta.
The military background is definitely a plus. There are a lot of networking events that you can take advantage of so make sure to attend those.
That's a tough call. Free tuition vs debt... I think I'd go with the free tuition personally.
I'd put UF on the back burner, and since you only have 2 years left, see what kind of scholarship you could get out of a Vanderbilt / UVA / Gtown / IU / UT / BC / UNC.
Depending on what you have saved up, the scholarship size, and which schools you can get into - that's when you make a decision.
First, Thank you for your service. Second, I think it depends on what you value more- being able to start your career without debt but maybe at the risk of having better career opportunities. If you think no debt is more important, then definitely pick UF. Great flagship state university and well respected business program. However, breaking into IB will be an uphill battle and you will have to network your ass off. Conversely, you can also try your hand at Vanderbilt, Rice, Emory, or UVA (I'm assuming you want to stay in the south) and then take UF if it those don't work out. I would do the latter, but good luck to you either way!
While UF is no where near other schools, it still recruits decently.
If you want to stay in the South and don't mind going to a MM, then UF will be just fine. But if you're looking for BB or NYC/Chicago/SF then go elsewhere.
Consider looking into the MSF combo at UF.
Thank you all for the input. I'd love to be able to get in with a BB in NYC/SF/Chicago so I don't want to sell myself short on my education.
undergrad or grad debt (Originally Posted: 12/11/2007)
im curious to know how some of you are dealing with the loans you took out and what kind of debt undergrad and/or grad school put you in?
what do you mean, how you're dealing with them. most debt is manageable, even if well into the upper 5 figures or low 6 figures.
Shit, this is the cheapest longest term debt you're likely to get next to a 30 year mortgage with a good credit score. You can earn almost as much in a CD these days as your student loans cost.
Since this is on an Ibanking forum, the answer should be something along the lines of "its just another fixed expense" or "who the hell cares" perhaps "i paid it all off with my first bonus."
Even if you paid for both undergrad and grad with student loans and had about $250k outstanding, your payment should be around $1,500 a month. You can easily deal with this on a $60k salary as long as you don't go ball out very often. Plus if it's really that crushing you can pay down a portion of it with your bonus each year. Moreover if you had grad and undergrad debt you would be an associate (I hope and if not thats pretty much a waste of a degree) and you would have a $90k salary and a ~$40k stub rolling around right about now (actual amount of stub may differ according to market conditions and firm).
This question should be more addressed to another group of people. I have some friends doing things like paralegal work before law school and what not that are pulling in ~$40k. These people struggle with the debt.
A $250k loan with a 20 year amort profile at 6% costs $1,791.08/month, at 6.75% it's $1,900.91 A $250k loan that was consolidated would put you in the 25 or 30 year amort though with a payment of $1,610.75 or $1,498.88.
So, I was a little under depending on the exact interest rate and amortization profile, however student loans can also be structured in interesting ways if you consolidate, including changing amortization profiles, payment type, and period.
If you went to school and paid ALL 250K yourself I would be suprised... I would also be suprised by the a person who didn't get any help from family (aunts, uncles, cousins, mother/father, g-parents) in some way, shape, or form (aid via a free car, assuming your car payments thereby freeing up your cash flow, paying your tuition).
Most of the people Iknow (even lower class) have had either grants, scholarships, or hand-outs from family that lessened their debt burden.
Also, the interest for student debt is tax-deductibe up to 4 or 5 K...erasing 4 or 5K from your income tax.
First, if the interest rate on your debt is something reasonable like 5% or less (most federal student loans fall in this category), you should pay the minimum amount because you can earn a higher return with other types of investments. The only exception would be if you have an exorbitant amount of debt somehow and just want to get it paid off... I don't really even see how this is possible because I think there's a limit on federal borrowing each year (I forget the specifics now).
Where people get into trouble is with private loans that charge higher interest rates. If you're being charged 7%-9% or somewhere in that range you may want to consider paying off debt earlier because you can't necessarily get a higher tax-adjusted return on investments (at least, not easily).
Interest paid on student debt is tax-deductible only up to $65K salary - if you make over that it goes away entirely (see http://www.wwwebtax.com/adjustments/student_loan_interest.htm). So in your first calendar year when you start, you can deduct student loan interest, but in your second year of reporting taxes you can't deduct interest unless you somehow only get a $5K bonus.
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