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

@CaMom13 Thank you!

@3mamagirls I was involved in a lot of orgs, especially during my first year. Think Ballroom, Wakeboard club, Business fraternity, and also a social/Christian (Greek) fraternity. At one point or another later on I joined the Alternative Assets Program (selective curriculum for prospective IB’ers), volunteered at the career center, and helped lead the consulting orgs on campus. There were also campus rep positions for brands like Bumble or Zipcar I did to earn $1,000/position/per semester (tons of these available). It definitely felt overwhelming at times, and after freshman year I cut my involvement back to focus on what I wanted to have an impact in. That being said, there’s so many exciting involvement opportunities here! I would say my path is pretty typical though, a lot of students overcommit the first year and wind back after.

A negative about SMU: Probably the party scene. It’s reputation at SMU is not unwarranted and made finding a solid group to keep my head on straight difficult for the first year. Most people start taking a step back after Sophomore to focus on their career search. I was never too involved in this scene and I think this is what helped me manage all of my other responsibilities. Waking up hungover the next morning really kills your productivity on Sunday. That being said, my social life was still vibrant, once I found my group.

Agree that it is odd that the loan amount is in the title. Most of these threads just say that they are a student or grad of a school, and are happy to answer questions.

@coolguy40 I am not advocating for or against taking out loans. I know many other friends who’ve taken them out at other schools and I’ve fielded questions for. I know there are some people on this board who, for whatever reason, can also benefit from my situation.

Yes, my salary, and other offers I received, were well above the 60k example I made.

Another thing that was cool about SMU was the Alternative Assets Program. It is a competitive program that teaches you Investment Banking and Hedge Fund skills (15-20 hours per week for an entire semester) led by Professor William Maxwell. We are a target for over 10 investment banks. This year, pretty much all 50 students in the program (except for myself due to interest) landed IB jobs. These jobs, while rigorous, pay well over 100k (more hours than consulting though). This is a program similar to one at UT and about 20 other schools and is one of the reasons SMU is a target for these jobs. We have similar programs for top students interested in consulting and marketing and advertising!

To clarify, the recommendation is that one should not take out $120K in loans unless they expect to earn $120K (not$60k) in their first job out of college. Even my engineering s’s didn’t earn that much their first year (I don’t think- but am not counting signing bonuses and granted it was a few years ago). If one earns $60k/yr, they might be looking at $4k or so/month after taxes and such. Cash flow could be a challenge unless they have very inexpensive housing and no car payment.

If SMU has become a target school for 10 investment banks, then the loans are not unreasonable for one determined to pursue IB.

@jym626 That’s true. I guess I didn’t check to see if there was a FA forum. My mistake on that. Regardless, I feel like my background can shed light for the other students considering SMU but will have to pay for it. I feel this is a unique perspective as most kids at the school had parents paying, and that hopefully someone can take away from this.

@FinalYear - having to pay for school is different than having huge loans. Many students are full pay and aren’t saddled with huge debt after college.

@FinalYear: How many job offers did you receive ? Were you granted many interviews ?

Do you see an MBA in your future after 5 or 6 years of work ? (That should generate some discussion !)

@publisher, while IB jobs do pay well, and it looks like there are some IBs that come to SMUs career fair, the average salary for SMU undergrads coming out of finance/accounting was in the $60-$70s range in 2016 https://www.smu.edu/Cox/CentersAndInstitutes/CareerManagementCenter/Placement-Data

@Publisher Yes, especially for people knowing they can work hard and want to go that route off the bat. LinkedIn ran an analysis (I think in 2016) and found SMU to be well in the top 20 schools who had IB hires. This program at SMU is only 10 years old and so I expect that number to increase.

Many of my Alts colleagues landed in Goldman Sachs. I believe I heard from Maxwell that last year we were the #1 school Goldman took the most students from (EDIT: and if not #1, one of the top schools. Can’t remember, maybe a lurker can help out?? Regardless, the career day Goldman held at our campus was HUGE). Since I helped interview for the program which doesn’t start until Spring of Junior year, I have seen more and more Freshman with knowledge of the program and gung-ho for making it in to land a top IB job. Often times, this was their main reason for choosing to attend SMU, especially if they were direct-admit to the B School already.

Zoning back out though, there are definitely other jobs on campus that make enough for these loans besides IB. Besides the jobs I was offered, for example, I have a friend at a credit card company doing a product manager role that makes 80k + 10k sign on his first year in Dallas. I would estimate 75 students in the business program last year graduated with jobs that will pay 90k their first year, inclusive of all bonuses, for some perspective

OP was a finance major & is in consulting. In 2016, SMU finance majors who went into consulting averaged over $77,000 per year in pay. Since then, salaries have increased.

OP will probably earn in the mid $80s to low $90s first year. 10% higher second year, & probably 25% higher than second year pay in third year if with Bain, for example.

@FinalYear - thats great for your friend, who may or may not have a huge debtload. @Publisher asked about your situation (your offers/salary range)

https://poetsandquantsforundergrads.com/2015/01/07/the-top-feeder-schools-to-google-goldman-sachs-and-more/.

. granted this article is a few years old, but still…

OP may have been referring to a regional office of Goldman Sachs.

@jym626: Great post ! Hard to believe that JP Morgan targets University of Phoenix (along with Ohio State).

Amazon targets the University of Washington & Western Washington. Amazon salaries are great and the bonuses are almost unbelievable.

Perhaps, but that isn’t what the OP said, @Publisher . And even so, how many positions are filled in the Dallas regional office every year? Likely they also recruit at UT-Austin, Rice, and other Texas big guns. And your point about possible grad school (as others also asked) is also important. Unless a company is going to pay for their employee to attend, that is an additional financial burden.

NOt knocking SMU. Fine school. But many here have expressed concern for the large undergrad debtload. Maybe the parents will pay it off. That would be nice for the OP.

120k is not good for undergrad. The boundless optimism of youth is prevalent in some of these replies, and they don’t take any potential setbacks into account. The payment due on the loan will be the same even if your company goes through downsizing, if you have health issues, or, if you suddenly become responsible for ill parents or have a sick child. A lot changes between 22 and 32. Taking a big risk on loans when you are 18 is just not smart at all.

At Apple, San Jose State is the favorite school for new hires.

The article you referenced stressed that major employers like to hire locally–from nearby schools.

@jym626 This particular friend is on a full ride! So a much better situation for him.

Couldn’t find any emails regarding the Goldman fact, but I know I heard something about it. I did just look at the placement spreadsheet and 15 people in Alts landed there. And he wasn’t referencing IB specific positions I would imagine, as many of my colleagues landed in positions like their Specialty Lending Group. Well-paid and respected, but different job entirely. More placement data can be found on the AA website online. I can verify first-hand that their hiring day at SMU was quite impressive. Well advertised and they had VPs and MDs from a wide variety of their groups from risk to marketing to SLG to many more come speak.

AA website? Please provide a link

@jym626 https://www.smu.edu/Cox/CentersAndInstitutes/AlternativeAssetManagementCenter/Full-TimePlacements2018

My current company is not on here. My recruitment process went a little longer than when this information was posted.

Heading out. Will speak about offers and interviews when I get back.