I am not promoting anything. The OP is just sharing his experience & does not seem to be promoting anything either.
This is a real life situation worthy of discussion–including advice not to take out large student loans.
OP has a lot of valuable experience to share. Business schools & the related majors are in high demand. Many students make sacrifices to be a “direct admit” into a business school.
Although somewhat off topic, OP has obtained a position usually or often taken by MBAs.
MBA degrees can cost $110,000 per year for each of two years at the top schools like Columbia & NYU. The current trend is toward one year masters degree programs in business for recent graduates with less than one year or, in some cases, 6 months work experience. At many elite schools (Duke & Northwestern) total cost for a 10 month program is $82,000. For Business Data Analytics the cost at Duke is $95,000–although not sure whether that program is 10 months or one full calendar year. OP has obtained the same job placement results without sacrificing another year of earnings & without paying the high cost for a specialty masters degree. OP probably avoided the need for a masters by choosing SMU.
Everyone agrees that limiting debt is best. But what the OP and his family did was bet on the OP and it sounds like things will work out. These young grads, make bonuses that are similar to what other grads make as salaries. They are not doubling up student loan payments monthly but are paying down debt at like 20-25 thousand dollars at a time when they receive bonuses to go along with their monthly schedules. They start out at 75-85 thousand dollar salaries plus bonuses.
The issue is not if they can make it financially, it is whether they are fortunate enough to get hired by these top firms to get these highly sought after positions.
Yes, you can get these jobs from nontarget schools but the majority of those hired do come from a select group of schools.
Not only will they start at a much higher salary and bonus but their bumps occur significantly faster and allow for the paying down of debt
Best of luck OP
OP’s internships are very impressive. Unusual to get such prestigious internships right after one’s freshman year. SMU was a wise choice for OP, but I suspect that OP interviews well.
I think that it may be fair to write that if OP was targeting Wall Street finance or Boston consulting firms, then SMU probably would not be the best choice of school. But for Dallas, it’s great.
@Publisher I have a few friends in the Big 4 so if you shoot me a PM I could always try to get the answer you are looking for.
You are correct though in that I did not consider any specialty masters programs. The thinking the whole time for me was, “I’ll be hanging my hat if I have to pay any more money for school after this. I better find/get the job I want now and get out.”
@mo6 (wont let me type your whole name) You are correct in your assumptions. Although I don’t want to focus too much on my end job here. Instead, I’d like to focus on how SMU gave me the platform to find the job I would love. To be honest, all three internships would’ve led to jobs that would’ve paid the bills. I was fortunate though in the salary department in discovering consulting was my passion, and fortunately SMU has a growing scene for that. This is what I paid for after all - a school that had its hands in a wide variety of industries such that when freshman me knew what he wanted, I could pursue it readily on campus.
And I was not a good interviewer at first. But due to my campus involvement and work experience, along with the countless opportunities to apply for, I got a lot of interview experience early on which I’d like to think helped make me a strong interviewer later. Career fairs were amazing - lots of employers just standing around with no one to talk to (obviously not for the huge firms though). Definitely a testament to the reputation of the school.
Kudos to you @FinalYear for opening up the topic in an effort to be helpful and subjecting yourself to unasked for criticism and unwonted disapproval from people who know nothing about your particular situation. I hope you do pay off those loans in 5 years. It seems in addition to making the most of your opportunities at SMU you certainly learned to deal with negativity calmly and professionally which will help you enormously in your career.
@finalyear What other types of campus involvement/organizations did you have and did you feel it was overwhelming, or just all clicked together?
Also, one question I always ask is what did you NOT like about the school?
To anyone reading this post, this is an example of what NOT to do in college. Realistically, this loan is not going to be paid off in 10 years, much less 5. Entry level salaries generally start at around $50k and they increase only gradually. This is the average debt a law school graduate takes out, and even lawyers struggle with that kind of debt relative to earning potential. For a bachelors, earning potential is cut in half. To increase earning potential, the OP will likely need to go to graduate school, which would increase the loan amount to at least $150,000.
If you have the ability to pay this off quickly, (which you likely don’t) then please do so.
As an educated guess, OP is probably making significantly more than the $60,000 salary used as an example in an earlier post in this thread. If with one of MBB, base salary is in the mid 70s, signing bonus of $5,000 and potential year end bonus of up to $17,000. Without being a superstar, OP should earn in the mid 80s in his first year. Promotions or suggestions to leave typically come at the end of one’s second year.
If OP had earned an MBA & was hired by one of MBB, starting salary is in the $145,000 area with bonus potential of up to approximately $32,000.
Obviously there are other management consulting firms that pay less, but OP did not come here to talk about earning in the $60 & struggling to make significant dents in his loan obligations. He is confident of paying off his student loans in 5 years rather than the scheduled $1,300 a month for 10 years.
Financial risk is financial risk. When managing a company or your family’s finances, it’s important to be objective and consider a wide spectrum of scenarios. OP has shared his story. This is just one of many paths. Some (perhaps many) consider it reckless / dangerous. Others consider it reasonable when viewing long term outcomes. That’s called risk tolerance. Really not any different than how one approaches their investment portfolio. Everyone’s circumstances are quite different.
This forum shouldn’t be about telling posters they are wrong or right. There is no wrong or right. Let’s collectively wish the OP well and hope his “aggressive” path works out. (Yes life has many twists and turns. Maybe they were factored, maybe they weren’t. Again, that’s called risk tolerance).
It’s often referred to as taking a “calculated risk”. What better investment to make than in one’s education ?
Plus, not sure that it should be viewed as an “aggressive risk” so much as a well reasoned investment. Business degrees from top schools are highly valued by employers. I suspect that many finance majors at Wharton, Stern & other elite schools have similar or larger loan commitments which some pay off in less than 5 years if they get the right position on Wall Street.
Students can’t borrow $120k. The federal loan limits are ~$5500/year or about $27k total. How were you able to borrow more than 4 times that amount? Who’s responsible for repaying that $1300/month if you can’t?
As far as I know, the only way most students can get their hands on that kind of money is if their parents co-sign the loans. But many parents have more than one child. Are you suggesting that parents should co-sign $120k of loans for each child? Or does it depend on the intended career?
The decision to co-sign $120k of loans is the parents’ decision, not the students. If a student chooses a major in a lucrative field but gets weeded out or changes to a major that pays much less, should the parents require them to transfer because the ROI has changed? If not, how do you justify overpaying for the less valuable degree?
What are the options for students whose parents co-signed a loan freshman year but can’t/won’t co-sign for more? Maybe the student was weeded out of a competitive major or chose to pursue a less lucrative career. Or perhaps the parents qualified to borrow the first year but don’t qualify in subsequent years. Colleges won’t allow students to register if the bills aren’t paid. The student could transfer, but they’d be considered a transfer at most schools so they’d no longer eligible for freshman grants. A recent poster is in that position. It looks like they’ll have to finish their degree by commuting to a local state school. They’re understandably upset, but a large part of it seems to be the disappointment of having to repay an elite school debt for a state school degree. What do you suggest they do?
Not as much as you think. I went to a top business school, and I graduated with many people who didn’t really have what it takes to do well in the business world. And some of them didn’t do particularly well career-wise after graduation. And I have worked with a ton of people over the years who didn’t attend big name schools and were extremely successful in their careers. Since I work in consulting, I’ve worked with a LOT of people over the years. This gambler might get lucky and pay off his loans. But if he has the personality and drive to do well in business, he didn’t need to spend this money (my thought when I read this thread title was honestly “This doesn’t make SMU students sound very smart.”) And it is bad advice for 99% of college applicants. There IS a right and wrong to this for most students. And WRONG is taking out 120k in debt.
“Gambler” ? More like calculated risk or investment in one’s education.
Maybe not such a wise risk if OP was not a direct admit to the business major.
Each situation should be evaluated based on the student’s situation.
@coolguy: With respect to your post #27 above, an MBA degree will cost much more than you suggest. Several elite MBAs run over $110,000 per year total costs for each of the two years. More common, however, are programs which cost about $95,000 per year ($190,000 total) for an MBA from a top 24 MBA program. But the average first year salary & bonus exceed $120,000 with many programs reporting grads first year earnings at about $150,000.
But, giving up 2 years of earnings is another cost that should be considered in addition to tuition & living expenses.
Do you have a job that pays well enough for you to pay down that loan ASAP and/or also pay rent, utilities, perhaps a car note or whatever typical monthly expenses recent grads incur? Are you paying off the loan or are your parents? A $1300/mo+ payment is a LOT.
I, for one, am happy that OP came on board. He obviously is making this all work out, which is why he opened himself up to questions, not a firing squad. I have asked a couple of questions of SMU, but afraid they are getting lost in the posts of negativity. I hope he still answers them, as I would like to find out about the school from as many different people as possible to make my own financial decisions. I’m a big girl.
No - this scenario does not play well with everyone for sure. But it DOES for some people, and that’s what he is trying to help with. No two situations or people are alike. And advising people to not take on so much debt is one thing, but constantly putting him down is another.
The OP could have talked about SMU without mentioning a word about the huge boatload of debt they took on. Makes one wonder why it was brought up in the SMU forum if they only wanted to talk about their SMU experience. That could have been discussed in the FA forum. JMO
@3mamagirls: Agree that a case-by-case analysis is called for when considering taking out a significant amount of loans.
One rule/suggestion that is common among law school applicants is to try to limit one’s loans to reasonably expected first year earnings.
^ That is not just a law school applicant adage. That is recommended by several people in finance: Do not take out more in college loans than you can reasonably expect to earn your first year out.