Acceptable Amount of Debt for a Petroleum Engineering Major

College Majors Engineering Majors
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<p>What do you base your comments on? At our kids’ U, which is highly ranked by US News & World Reports, the # of employers showing up for engineering job fairs and offering jobs declined significantly from 2009 to 2010, say 33-50%. Many of his engineering peers who were excellent students did NOT get job offers and were trying to figure out what to do (more school? settle for anything they could land?). Many also have student debt.</p>

<p>As you say, often they do hire new college grads & let the experienced ones go because it’s cheaper. How will OP be able to pay off his loans if he is either (1) not hired or (2) let go because after a while the company decides it wants to have a cheaper labor force?</p>

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<p>I’ve spent many years visiting, interviewing, and hiring at many levels of schools all across the country. The top schools are seeing no difference in career fair attendance and the top students see the same number of offers. At “good but not top” schools, there has been a decrease in career fair attendance and a lower number of offers for students.</p>

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<p>You can’t generalize a few cases. Often times the students you think are excellent students have lower GPAs than would be expected. You also don’t know if they have any internship experience, and you don’t know how they interview. For example, I interviewed someone with a stellar GPA who was just a terrible, terrible interview. It was so bad, I strongly doubt anyone hired her. But that doesn’t mean hiring was down at that school that year because a top GPA student couldn’t find employment at graduation.</p>

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<p>That’s not what I said. It is not like a company identifies and fires experienced engineers as a cost cutting measure. Companies have experienced engineers turnover all of the time (retirement, leave for a competitor, promotion to non-engineering position,etc). A percentage of those open positions are filled with experience external hires and a percentage are filled from college recruiting. When a company wants to trim costs, a higher percentage will be from college recruiting.</p>

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<p>Really? So you’re saying a Petroleum Engineer will be out of work for sixth months at a time because you know a computer analyst who worked for an oilfield company that got laid off? I see. Turns out that everyone that has anything to do with oil doesn’t get laid off at the exact same rate when oil prices are down. Obviously the expendable will be spared first. You cannot compare a Petroleum engineer to a computer analyst. Not to mention the possibility of dirt cheap oil falls with each passing year, I’m willing to bet we won’t be seeing very many busts in the future.</p>

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<p>PetrE’s consistently have some of the best if not the best job placement percentages of any undergrad major, along with the highest salaries. You can’t really compare other engineering majors to PetrE. It’s a very specialized field with a relatively low amount of new grads on the job market each year.</p>

<p>I’m not encouraging the OP to go to the expensive school, all I said was that student loans shouldn’t really be too big of a deal considering the internship/job opportunities he will have. If it was me I would probably go to the cheaper school as long as I wasn’t sacrificing anything too serious as far as job opportunities went, which I doubt would be the case.</p>

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<p>6ok is a lot of dough to pay off even for a petro eng. There is always the possibility that things could turn bad so its probably good to seriously consider the other school. Find out where the oil companies recruit between the schools.</p>

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<p>I understand that some people might be hesitant at taking on loans, but understand that if you ever plan on owning a home, that will automatically place you in hundreds of thousands of dollars of debt so when people say not to go into debt because of possible risk ahead, they are pretty much saying that you should put your entire life on hold. The way I see it is that YOU are investing in YOUR future. Believe me, it will be the best $60k you ever invested.</p>

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<p>To be honest, I am not too sure about the internship opportunities at Missouri University of S & T. I would imagine that their location is sub-par and that most of the big Oil Companies focus on recruiting at schools like Mines and schools around the Gulf Coast. </p>

<p>Could someone correct me if i’m wrong?
Is there currently oil exploration in Missouri?</p>

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<p>INOTIES - I didn’t want to make any comment about the schools. I figured the number of companies coming to recruit would speak volumes.</p>

<p>Having been in the oil and gas arena for 30 years, I have never heard of anyone coming from Missouri S&T. CSM - you bet - lots of folks from there (engineers, geologists, geophysicists).</p>

<p>As for Missouri, to my knowledge, no major O/G exploration there.</p>

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<p>Sorry to come off as ignorant, guys. Wrote my response hastily.</p>

<p>I’m 50 years old, born and raised in Louisiana. </p>

<p>I don’t just “know” a computer analyst, in fact, I’m married to him for 28 years, but I have grown up and been around people in the oilfield industry for 50 years. You can’t help but be around them in Louisiana.</p>

<p>I’ve worked in the legal field for the last 25 years, and take many depositions of people who are employed in the oilfield industry. Part of my job is to take down their employment history, so I hear, under oath, their description of their job history over the course of their lives.</p>

<p>Sorry I can’t give specifics of my Rice alumnus friend’s degree. I don’t ask my friends their GPA, their exact degree, and what internships they did. I just know he’s a brilliant guy, had father, uncles, siblings, in the industry, so he’s been around it a lot. He lives in a nice house, takes nice vacations every year, but he also tells of the hard road he had to hoe on his way there. Living in Odessa and living with his parents when he was out of work for a year. And by the way, Tulsa is nice, he says. Didn’t mean to knock the city. Just making the point that you’re not always going to get to work in a “glamorous” city.</p>

<p>By the way, my husband worked for a little company called McDermott. Maybe you heard of it? My son’s friends’ parents, who I’ve known very well through Scouts and other school activities, I’ve watched them come and go, laid off and employed, transferred and homeless, so I do have a little bit of knowledge of people beyond my one computer analyst. Those people worked for such companies as Shell, Conoco, Texaco. Heard of them?</p>

<p>Sorry to be defensive here, but I’m not just talking out the side of my mouth, to put it nicely.</p>

<p>The only familiarity I have with Colorado School of Mines is that I had a chemistry professor in college who graduated from there. But I do believe there is probably some oil work done in Colorado. My “chemical” engineer friend does have former co-workers that live there now, and he was offered to transfer there, but chose Louisiana instead to be close to his family. </p>

<p>If you have the brains for chemical/petroleum engineering, awesome, go for it! I just hate to see anybody get themselves into debt way over their head with the promise of a six figure salary early on in their career. </p>

<p>Good luck in whatever you choose. I hope you find the school that is the right fit for you.</p>

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<p>Before going further, I’d try to get a lock on exactly how much debt you would need if you plan to attend CSM, INCLUDING interest if it’s not going to be paid for you while you’re attending your U. A lot can happen when you’re in school & beyond. Large debt is really not a great companion, especially these days when so many people can’t get and even lose jobs that used to be considered “sacred.” These are people of all ages, going into ALL fields, including P/E and other formerly SURE fields. </p>

<p>Just because SOME of the kids at a U are getting job offers, who says which kid will get the offer(s) and which won’t?</p>

<p>One other option you can consider is doing great in undergrad & then going to grad school in the program of your choice–generally funded by the school or your employer.</p>

<p>Good luck, making choices that will work for you.</p>

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<p>You don’t really have to account for interest seeing as your student loan won’t accumulate interest charges while you’re in school. Just save the new car and fancy apartment for a bit and pay that thing off asap.</p>

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<p>Yes, loan interest DOES grow on many educational loans while the student remains in school, it all depends on the terms of the particular loans the student/family is considering. SUBSIDIZED loans do not generate interest because the government is paying it while the student is attending school but the other types of loans DO generate interest, which compounds (unless the student pays it while attending school).</p>

<p><a href=“What is a Subsidized Student Loan? | Edvisors”>What is a Subsidized Student Loan? | Edvisors; has more info about GOVERNMENT loans. There are also private educational loans with much more variability and I believe less regulation.</p>

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<p>More thoughts:</p>

<p>1 - Petroleum engineering jobs are only somewhat tied to the general economy. They are more tied to the price of oil. When oil is expensive (re: now), then jobs are plentiful in petroleum engineering. The recession hit the oil industry two years ago because the floor fell out of the price of oil. Not to say that couldn’t happen again, but it doesn’t seem likely right now. Not to mention, that many petroleum engineers (and engineers in general) are approaching retirement, which means that there will be plenty of opportunities.</p>

<p>2 - $60k is a lot of money to take out. Yes, you should know how much you expect to pay to pay in full and how long it will take you post graduation using the AVERAGE salary for petroleum engineers. I fully agree with the other posters here that say you should be more conscientious of your total loan amount. </p>

<p>3 - CSM is one of the few schools that actually posts ACCURATE job placement statistics and salary offers. I already sent you the link to the information from last year. You can see that even in the recession 95% of petroleum engineers with Bachelor’s degrees from CSM were placed.</p>

<p>4 - Your ability to find jobs post-graduation is dependent on a few items: How well you did in school, who you networked with, and the reputation of your school. Some people seem to think it’s worth it to pay a lot more for college for the reputation of your school. CSM has an outstanding reputation in the oil and gas business. To put it in perspective, oil and gas companies consider CSM to be on par with MIT, Stanford, Caltech etc. Many companies recruit at CSM that do not recruit at other schools… </p>

<p>5 - If you don’t do well in school and take advantage of your opportunities, it won’t matter which school you go to.</p>

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<p>Another factor not mentioned above is whether the OP actually ends up with a degree in PetE, as many more attempt than graduate in PetE and most engineering fields. At age 17/18, it’s tough to know what you will end up finding appeals to you AND what you actually do WELL in.</p>

<p>It’s also tough to predict whether there will be more “boom/bust” which was mentioned by another poster, as our world is facing some uncharted territory in many ways and how that will affect sustained employment as a PetE. Outsourcing is also a threat mentioned for many engineering jobs and could affect PetEs as well.</p>

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<p>McDermott? Actually no I haven’t. I don’t think you understand what I was trying to say. You make a statement saying the OP will be out of work for sixth months at a time working as a petroleum engineer and then go on to back it up with irrelevant stories about people with random positions in the oil industry getting laid off. Everyone has heard about the hard times in the oil patch when oil prices drop. However, the petroleum engineers, especially at the larger firms tend to be taken care of. If a company lays off a roughneck it doesn’t mean they go lay off an engineer. Believe me I have looked into this and all of this is coming straight from the mouth of some of the senior engineers at a little company I will work for in a month called Exxon Mobil, maybe you’ve heard of it?</p>

<p>It’s good to know that everything may not always be gravy. But using the busts of the last 50 years as a warning of whats to come in the next 50 years doesn’t really make sense. Oil is running out, demand is increasing like crazy and the potential for conflict is also increasing. Given all these factors it makes sense that many people are betting against oil prices bottoming out in the future.</p>

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<p>Educational loans and home loans are very different. Home loans are secured against the value of the house. Unless you took one of those 0 down loans a few years back or took out a HELOC on the inflated value of your house (which most of the people underwater now did), your house should have enough value at all times to pay back the loan. In a time of hardship, you sell the house, pay off the loan, and move into an apartment.</p>

<p>Educational loans are unsecured. They are an investment in your potential to find a higher paying career, which may or may not actually occur after graduation. In a time of hardship, you can defer repayment for a time, but eventually you must repay them. That makes educational loans a higher risk debt than a home loan.</p>

<p>As far as a $60,000 loan, assume a 5% interest rate and a fully unsubsidized loan, that’s about $730/month for 10 years after graduation. An $80,000/year salary is about $5000 per month after taxes, so student loans would be about 15% of your after tax income. The typical guidance is that you shouldn’t exceed 10% of your post-graduation income if you can avoid it.</p>

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<p>^^^My apologies, youofeh. I forget that we’re talking about a 30 year age difference. McDermott used to be a major player in the field, a competitor with Halliburton. Being based in Louisiana rather than Texas, it was faced with more challenges than the latter, so I am not surprised it is not familiar to the current up and coming engineers.</p>

<p>While I do have a lot of exposure to roughnecks through my legal work, I also work a lot with expert witnesses because of my background, so I am talking about engineers as well.
I started my legal career working every day, five days a week, for five years, interviewing every type of employee from Shell Oil, from janitor to senior process engineer to top management, because of a major explosion at a local Shell plant.
It was quite an education, and I have a lot of respect for people that work in this field.</p>

<p>I think that is awesome you have a job with ExxonMobil. Congratulations! That is fantastic! </p>

<p>I wish you so much luck in your future. One piece of advice I’d like to give you, just from personal experience, is to be willing to relocate when opportunities open up. You will have a much more lucrative career. It is hard, with family considerations involved, but in the long run, it will pay off.</p>

<p>Again, take care to all of you majoring in chemical/petroleum engineering. Stay safe and enjoy your college experience.</p>

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<p><<one piece=“” of=“” advice=“” i’d=“” like=“” to=“” give=“” you,=“” just=“” from=“” personal=“” experience,=“” is=“” be=“” willing=“” relocate=“” when=“” opportunities=“” open=“” up.=“” you=“” will=“” have=“” a=“” much=“” more=“” lucrative=“” career.=“” it=“” hard,=“” with=“” family=“” considerations=“” involved,=“” but=“” in=“” the=“” long=“” run,=“” pay=“” off.=“”>></one></p>

<p>I second that advice!</p>

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<p>you of eh-</p>

<p>What was the hiring process like for Exxon Mobile? Did you intern with them first?</p>

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<p>Everyone: thank you for all of the feedback. I’m more than satisfied.
There are a couple of things that I want to note on:

  1. On being flexible with relocation: Part of the attraction of petroE is the travelling opportunity. I’m psyched about getting to travel the globe
  2. Debt: A question for people who have experience with this as petroleum engineers: How much debt is acceptable? 60K might have even been conservative. I’m not quite sure yet. Generally, for any other school, I would back out immediately, but, for CSM, I’m not just investing in a career, I’m paying to spend college in my favorite place on the planet. Everything I need is right there. I’m willing to accrue a substantial amount of debt to make sure that I get to spend time in Colorado for existential, recreational, and academic reasons, but how much is suicide?
  3. If I decide not to go, could I go to Missouri S&T for Geophysics with an emphasis in Petroleum Exploration, then go to grad school at CSM? How difficult is it for someone that wasn’t a petroE undergrad to attain a decent graduate position in it?</p>
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<p>Altho there are somewhat fewer options in terms of locations, well-trained geophysicists (with geology/petroleum exploration knowledge) are very much in demand. This is an area my younger son is considering.</p>