Ask Me Anything: Took Out a $120k Student Loan to Attend SMU

Colleges and Universities A-Z Southern Methodist University
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Hi, I am a recent graduate of SMU that studied Finance. When I was selecting schools (originally I wanted to do Marketing), I used CC and other ranking sites a lot to help me sift through the college application process (my parents/GC were not a good resource). I would love to give back and help others who are now in the same boat, especially those who are considering loans/a business major, and can try to answer questions to the best of my ability. My advice about taking out loans is: make sure you work the math and understand the salary of the degree you’re interested in. School is an investment and your decision should be treated as such.

Highschool background: SAT: 1390, GPA: 3.7/4.0, Rank 11/150, varsity sport involvement, extracurricular (clubs) involvement, min. wage job experience, ran a very small business online.

College background: BBA Scholar. Alternative Assets Program. Leadership experience in several campus orgs. Parents are not helping with my education. I took out a 120k loan and paid over 20k in cash during my time at SMU. Other schools I considered/applied to were: URichmond, Emory, Loyola in Maryland, TCU, University of Tulsa.

In short I chose SMU out of the bunch because they offered a reasonable Merit Aid package (didn’t qualify for need based), Dallas is a BOOMING city for opportunities, there were other good programs if I decided later to not pursue marketing (which ended up happening), and the projected ROI of my degree after school.

My experience at SMU was mostly positive. In terms of opportunities: second-to-none. Top firms of all industries in business recruit here. Summer business internships that pay 10k+ over the summer are very common and helped me pay down loans. I’d say 80% of Finance/Accounting students get these after Junior year, and 40% after sophomore year, and maybe 10% after Freshman year. Plenty of during-school year internships also. Faculty / Career center does a good job in preparing you for a career but you have to take initiative to visit them/info sessions.

I can speak a lot about the student life too if there are questions. In short, coming from a non-wealthy background, it took time finding a core friend group - but I did eventually and love the friends I made/experiences I had to death. One positive side to the demographic is some of my friends are/were very wealthy, and as such, I got to partake in some experiences that not many get to try (think expensed trips, lakehouses, boats, insane cars).

Loans were co-signed by parents, ~5% int rate, and payment will be about $1300/mo for 10 years. I estimate they will be paid off in 5 years.

Summer work experience and type of city it was in:

Freshman year: F50 company, Operations (Atlanta/SF/Houston) & Leadership Summit with a Big 4 Accounting Firm
Sophomore year: F100 Investment Bank, doing non-IB work, think Strategy/Risk/Prod Management/Marketing, (Chicago/NY)
-Also did a small Finance internships during Soph year
Junior Year: Same F100 bank as before, same role
Full time: working in Dallas at a top management consulting firm

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My understanding is that you now have to have a 3.5 to enter the program - is that correct? Are there many people who are not able to get to that goal, or does the school help out at all? Are most students serious about their studies, or is that a major-by-major issue? Would it be hard to double major now that you know the workload?

Also - are you originally a TX resident, or OOS (seems OOS from the variety of schools)? Since you are working in Dallas right now, was that OOS transition difficult?

Lastly, for now, what was the reasoning you picked over TCU? I see a lot of school bashing between the two, but I would rather get a direction as to why anyone picks one over the other (besides that good feeling aspect).

Thanks!

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Sorry, I’m not sure I’d take advice from someone who took out $120K in loans. You could have likely gotten an equivalent education and opportunities for much less.

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I still go back and forth on whether or not this would’ve been the case for me. First, I did not have a chance of getting into UT. While I did qualify for in-state Texas tuition, my Writing SAT score practically disqualified me from aid/getting into any school that looked at Writing (now students do not have this section of the SAT). Second, I was not top 7% in the HIGHLY competitive Texas highschool I moved to. That leaves A&M the other reasonable choice.

Lastly, even considering A&M or UT, those would have still cost me $60k+ accounting for housing. To me, I saw the small class sizes, internship opportunities, and potential networking opportunities enough to bridge the 60k price difference. I am not sure I could’ve gotten such experience so early on at another school. I was also auto accepted to the business program, which was big for me and wouldve been an uncertainty at UT or A&M. Sure, taking out this much in loans isn’t for everyone, but I know there are more than a few on this board who, for whatever reason, have decided taking out loans or attending SMU is their best option, and I would like to help by answering their questions.

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So you think you can pay back your loans twice as fast as scheduled? You can pay $2500+ per month? That’s a lot of after tax income going to loans.

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@FinalYear Thank you for trying to help. I know that most people on this board are very anti-loan, and in many cases they are correct. But some people may need loans, and may have the opportunity more than others to pay them back.

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@3mamagirls , Yes, the 3.5 was a recently-established requirement due to the business school being at capacity for some time. Even with the requirement, I think an A/high B student in highschool could expect similar grades in SMU’s pre-req courses and get admitted, and the teachers are more flexible/lenient in those early classes, but that is my opinion.

Regarding double-majoring, it seems like half my friends in the business school did this. It really depends how much you want to spend your time networking vs. clubs vs. social life vs. classes. Definitely on it’s own, double majoring is feasible.

You could say I was practically OOS culture-wise, I had lived elsewhere/small town prior to senior year. I do not think the transition to TX/Dallas was difficult. There was plenty of diversity location-wise, people were friendly, and I was actually excited to see all that a big city had to offer.

Haha, definitely some rivalry with TCU, but mostly due to similarity in competitiveness (except in football) and proximity to each other. My reasons for picking SMU over TCU: more merit aid (bc SMU didn’t look at my SAT writing score at the time), better business school (I am under the impression a higher tier of companies especially in IB and Consulting recruit at SMU), BBA Scholars Program, and opportunities in Dallas vs Fort Worth.

SMU truly seems like the first school companies from Dallas recruit at before all other schools.

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@twoinanddone Yes. Granted, I would think, for a business major, this could only be possible in industries like Investment Banking, consulting, and a few select other jobs like product management or working certain roles for a F500 firm. Salaries above 75k and 10-50% bonuses are not uncommon. These are very selective industries but SMU is fortunate enough to be a target for them

To be fair, I only know three others at SMU taking out loans without family help, and all of them are actually in as deep as me. All of them were dilligent/hard working and landed top IB and Consulting jobs as well.

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I’m not anti Federal loans ($27K total). But this is nuts.

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@intparent It’s a less traditional route for sure, and I only knew 3 others at SMU doing it. I did spend a lot of time though weighing my options and career interests though, so it wasn’t belligerent risk. My brother is in the same boat at Baylor (Computer Science).

It’s not for everyone but I hope with my unique situation I can help answer the questions of others A) considering at SMU in general and B) considering taking out loans of any amount.

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@3mamagirls Happy to help! And definitely understand where people are coming from. Student loan default rates are real.

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How important or helpful were business club membership(s) in your career search ?

Also like to read about your Big 4 experience. @FinalYear

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And do you have such a job?

If a recent grad made $60k, that’s $5k in pay per month. Figure $1000 for taxes and insurance, another $500 for the 401k, leaving $3500 in take home. Estimate $1000 for rent, another $500 for car payment and insurance. You now have $2000 left per month to pay for EVERYTHING else - clothing, utilities, cell phone, vacation fund, gifts, food, gas, and yes, the dreaded student loan payment. A student loan payment (or combination of payments from different loan sources that can’t be combined) of $1300 would be a budget killer. A $75k job would be $6250/month. Still not enough for a $2500 student loan payment.

If you want to help other students see what it’s going to be like graduating with $120k in debt, post your budget showing how you make it all happen.

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I worked for one of the top management consulting firms for many years (and recruited for them). You do NOT need to go $120K into debt to end up there.

Depending on the private loans taken, the risk is high. If you can’t pay them back (in many cases, even if you die), your parents are on the hook. To be blunt, it is really selfish to put your parents on the hook legally for your debt.

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I suspect that OP is counting on annual raises & bonuses to help pay off his student loan debt.

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@Publisher , Good question. In terms of business clubs/orgs, I joined a business fraternity freshman year, and later got involved with our consulting club and career center organization. Business clubs were pivotal for two reasons: 1) helped me figure out what I wanted to do and 2) enabled me to get leadership experience (beginning freshman year) that I was able to leverage in interviews.

When I started at SMU, most of my friend groups were other freshman. The exception was in the business fraternity, which had many senior members. Many of these people had already had jobs/internships, and I tried to talk with as many as possible to understand the different opportunities/internships that were available at my school in a short period of time and discover which jobs (eg. What’s the difference between finance and accounting jobs?) resounded best for me. Attending info sessions held by companies recruiting also helped with this.

The Big 4 experience I mentioned was a 1-day conference at their office I interviewed for and was accepted to. It led to an interview for an accounting internship the next semester. I do not have experience working for any of them. I will say the Big 4 will scoop up almost all Accounting majors at SMU looking for a job. At first I switched my major from marketing to accounting, which led me to apply for this opportunity so I could see if I was interested in accounting. They also recruit other majors for consulting positions on campus. Is there anything in specific you’d like to know about them?

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Thank you for your response. I do have a specific question, but it would need to be answered by an intern for a specific Big 4.

Did you consider any specialty masters degrees ? (I suspect not as you seem to have secured a top paying position.) I ask because I am currently doing a search for a recent graduate with a finance degree.

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@intparent I agree there are alternate ways to go to pursue a career, this was my route.

As I was not sure what I wanted to do going in, I just knew I wanted a school that there would not be a ceiling to what I could accomplish due to factors such as certain companies not recruiting there, lack of prestige/network, lack of majors, etc. My parents both went to small state schools and spoke of how they felt they had been limited by that decision. They were proud I chose a school such as SMU where opportunities abound and there were no limits to what could be accomplished/accomplished in the future due to the network I’ve created. Of course, you can always cold call your way into any industry and from any school probably with the right circumstances and determination.

Also, I did not do anything “selfishishly” to my parents as you suggest. I operated within the boundaries they set for me and flt comfortable with. Just as some parents are OK forking out several $10-100ks to pay for their children’s educations, mine were willing to support me by cosigning my loans. For that I am thankful and I have always been well aware it is a liability to them. My parents and I were aware of the risks going in and had worst-case scenarios mapped out.

Congrats on your success in the management consulting field. It is a competitive field. There are thousands of students on websites like Wall Street Oasis from all schools working hard to break in. I feel fortunate to have landed my dream job after college and am very eager to start!

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I don’t think that many realize the prestige of SMU in the Dallas area. I don’t know, but I think that many major Dallas, Texas employers hold SMU in very high regard. I cannot think of a better school for one seeking a career in business in Dallas.

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I just wouldn’t advise ANYONE else to do this, and think it is irresponsible to promote the idea.