What's a sane debt load for an MPP?

[MollyB]

I realize everyone has a different risk tolerance and that previous work experience going into an MPP is probably not an inconsequential factor in a person's salary on graduating.

 

That said, how much are people taking on in debt? And/or how much seems sane, to those of you lucky enough to have full or near-full scholarships? 

 

I'm using this handy student loan calculator (http://www.finaid.org/calculators/scripts/loanpayments.cgi) and it's depressing / terrifying. If I spend $80k on my MPP (tuition of $20k + living expenses of $20k a year at my current top choice), and add to it my $45k outstanding from undergrad, there's no actual way I could pay that in 10 years on a fixed repayment plan. That income-based and income-contingent repayment plans exist makes me feel a tiny bit better, but I think those plans are all 20 25 year and would mean insane interest. 

 

ETA: If you use an income-based repayment plan, and pay for 25 years (!), the rest of your loan will be forgiven. The catch: You may have to pay taxes on any loan amount forgiven: http://www.nytimes.com/2012/12/15/your-money/for-student-borrowers-a-tax-time-bomb.html?_r=0

Edited March 11, 2013 by MollyB

[skemp]

I think you pretty much nailed it that it's largely dependent on how confident you are in your ability to get a stable, well-paying job or career once you're done with the program. That said, my impression of MPA/MPP programs is that they're fairly light on curriculum so you should be able to find time to earn some money so you're not completely dependent on loans (or can pay back what you don't need), either with a job inside your school or outside it. I really don't know that you'll get a very clear answer for this--if you're qualified enough to get into a program you should in theory be competent enough to get a job after you finish. It's just up to you to consider costs when choosing your school, and also employment/assistantship/fellowship opportunities while attending to minimize the amount of debt you take on during your education.

[vincehoward]

I realize everyone has a different risk tolerance and that previous work experience going into an MPP is probably not an inconsequential factor in a person's salary on graduating.

 

That said, how much are people taking on in debt? And/or how much seems sane, to those of you lucky enough to have full or near-full scholarships? 

 

I'm using this handy student loan calculator (http://www.finaid.org/calculators/scripts/loanpayments.cgi) and it's depressing / terrifying. If I spend $80k on my MPP (tuition of $20k + living expenses of $20k a year at my current top choice), and add to it my $45k outstanding from undergrad, there's no actual way I could pay that in 10 years on a fixed repayment plan. That income-based and income-contingent repayment plans exist makes me feel a tiny bit better, but I think those plans are all 20 25 year and would mean insane interest. 

 

ETA: If you use an income-based repayment plan, and pay for 25 years (!), the rest of your loan will be forgiven. The catch: You may have to pay taxes on any loan amount forgiven: http://www.nytimes.com/2012/12/15/your-money/for-student-borrowers-a-tax-time-bomb.html?_r=0

I'm dealing with this exact dilemma. I received decent funding to Maxwell and it is a one year program so ideally I'd be back out in the workforce by next July or August. That bumps it ahead of HKS (assuming I even get in and get poor funding) despite the Harvard brand, in my opinion. Still, there is no guarantee of the utility of  a public policy degree since it isn't a professional credential like a JD or an MD and doesn't have the same brand strength of an MBA. Your decision should depend on where you're at in your career now and whether an MPP/MPA will help you earn more money and advance more quickly up the ladder than you would by simply doing an excellent job in your current position.

[rdt425]

I was wondering if anyone had any thoughts on the Public Service Loan Forgiveness (PSLF) program. From what I've read, as long as you work 10 years in public service, the balance of your loans will be forgiven and you won't owe taxes on the forgiven amount. You're also able to make payments under an income-based repayment plan, which would be a great benefit as I don't anticipate making tons of money right out of school.

 

Right now I'm trying to decide between some highly ranked schools that have offered me no funding, and an Ivy that is lower ranked for policy, but has offered me substantial money. If I were to take the money, I'd be looking at $65k in loans versus around $110k+ for the higher ranked schools.

 

Should I really be worrying this much about the cost? My rational side says that I should just take the money and run, because I'd have less debt and a degree from an Ivy. However, if all of my loans are going to be forgiven after 10 years anyway, shouldn't I just go to one of the higher ranked schools, which I think offer better career prospects, even though it would mean initially taking on a ton of debt?

[vincehoward]

I was wondering if anyone had any thoughts on the Public Service Loan Forgiveness (PSLF) program. From what I've read, as long as you work 10 years in public service, the balance of your loans will be forgiven and you won't owe taxes on the forgiven amount. You're also able to make payments under an income-based repayment plan, which would be a great benefit as I don't anticipate making tons of money right out of school.

 

Right now I'm trying to decide between some highly ranked schools that have offered me no funding, and an Ivy that is lower ranked for policy, but has offered me substantial money. If I were to take the money, I'd be looking at $65k in loans versus around $110k+ for the higher ranked schools.

 

Should I really be worrying this much about the cost? My rational side says that I should just take the money and run, because I'd have less debt and a degree from an Ivy. However, if all of my loans are going to be forgiven after 10 years anyway, shouldn't I just go to one of the higher ranked schools, which I think offer better career prospects, even though it would mean initially taking on a ton of debt?

What schools are you choosing between? I ask because we are talking about public policy degrees here and I just don't see how it matters much what school your MPP/MPA comes from, definitely not enough to justify taking tens of thousands more in debt if you don't have to. The career outcomes between certain schools just aren't that different to be honest. I guess a more detailed description of your work experience, targeted jobs post grad, and choices of grad schools and funding would help posters here give you better advice. As a general rule of thumb, there are very few public sector employers who will care all that much about where you got your graduate degree. I worked on a few hiring committees at Teach For America (one of the higher paying, prestige conscious non profit employers mind you) and not once did we hire a manager because he/she went to Kennedy School instead of Trachtenberg.

[rdt425]

What schools are you choosing between? I ask because we are talking about public policy degrees here and I just don't see how it matters much what school your MPP/MPA comes from, definitely not enough to justify taking tens of thousands more in debt if you don't have to. The career outcomes between certain schools just aren't that different to be honest. I guess a more detailed description of your work experience, targeted jobs post grad, and choices of grad schools and funding would help posters here give you better advice. As a general rule of thumb, there are very few public sector employers who will care all that much about where you got your graduate degree. I worked on a few hiring committees at Teach For America (one of the higher paying, prestige conscious non profit employers mind you) and not once did we hire a manager because he/she went to Kennedy School instead of Trachtenberg.

 

Right now I've been accepted to Harris, GPPI, Trachtenberg, and CIPA. I'm still waiting to hear back from Ford. The only school to offer any money has been Cornell, and they've offered me a renewable fellowship of $28k/year. I have three years of work experience - one year in development at a public university and two years working at a college access nonprofit. I'm interested in working in ed. policy when I graduate, particularly higher ed. policy. My dream job would be at the US Dept. of Ed. or at a foundation/think tank/etc.

 

I like CIPA a lot, and the fact that they've offered me some money makes it an appealing choice. I just wonder whether they're the best option given my career goals. Some of the other programs have better offerings in ed. policy (especially Michigan and GW). I try not to put too much stock into rankings, but I still struggle with balancing prestige v. money v. career outcomes.

 

I really appreciate any advice you can offer, thank you.

[cunninlynguist]

Healthy discussion so far. In my case, I'm heading to Duke for an MEM (if you're not familiar, it's basically an environmental MPP).

 

In addition to the debt you may accumulate, try simply typing out what you'll get for your money. Is it literally just the degree (e.g. some coursework and not much else)? How many resources does the program have that can enhance your career prospects, marketability, and network? I'm quite pleased with how my money will be spent (roughly 65-70K after a decent funding package), as I'll be able to make it go a long way -- but that isn't the case for every program.

 

Further, your starting salary isn't going to be your permanent salary. If you chose to work in the public sector, PSLF and IBR might be plausible. It's hard to recommend them with absolute certainty given the machinations of the government, but it's in effect now and hopefully will remain so.

 

vincehoward: MPPs and similar degrees are still professional degrees. JDs don't confer an automatic ability to practice law, the bar exam does. And I'm sure you know the state of the legal market and the insane costs of law school. MDs are a much larger investment than our degree choices and a wholly different field. I also wouldn't put the MBA on a pedestal, either: there's been plenty of discussion regarding the utility of it and, frankly, MBAs are running around everywhere.

[ridofme]

@MollyB - I'm glad you started this thread.

 

When I first started preparing my applications, my biggest fear (other than getting rejected across the board), was being offered a big scholarship at one of my less-preferred schools, and no funding at one of my top choices. Having heard back from half of the schools to which I applied, that is exactly the situation I am in. But my emotional response is far different than I had imagined: I am enthusiastic about taking the fully-funded offer, and will not give another moment's consideration to the school that offered me zero aid.

 

Using those loan calculators is sobering. Taking out 100k in loans means payments of almost $1200/month for ten years. The best case scenario with an MPP is making about 70k. Most of us will be making closer to 55k. If I deduct 14k of loan payments from a 55k federal goverment job, I would actually be making less than I am in my current position with just a BA. IBR/PSLF seem promising, but that's a lot of pressure to make one specific path work out. And I'm not sure that I want my Plan A to be having the government forgive my debt after a decade of reduced payments.

 

Moreover, while I am currently content to live with roommates, take the bus, etc., I will be graduating in my late 20s. How could I ever buy a house, take a vacation, or support a family making those kinds of loan payments? What if I wanted to join a start-up, or work in a developing country, or take a year off to have a kid? What if I get laid off (very common in the non-profit world, where funding is never guaranteed)? Setting myself up to live paycheck-to-paycheck after obtaining a professional master's degree from an elite institution seems foolish at best. It gives you absolutely no room for error, and no freedom to change paths.

 

I realize that I am in a lucky position to have a fully-funded offer, and for some people, taking on debt might be their only shot at getting and advanced degree. However, it's one thing to take out 40k as an investment in your future (that's still $460/month, by the way), and another to pay sticker price and take out 100k+. Very, very few people will ever be able to pay back the latter amount comfortably, barring a major career change, marrying rich, or a stroke of great luck.

 

@rdt425 - I am not very familiar with Cornell CIPA, but my guess is that you would be able to get where you want with that degree. Think of the freedom you will have career-wise, not having to consider an extra 56k in debt. I think the most important thing to do would be to check out CIPA's career services, and the career paths of recent graduates. My guess is that a lot of them end up in federal agencies. And while those who obsessively read gradcafe might know that CIPA is lower-ranked than your other options, everyone else will assume that Cornell is a better school, anyhow (including those people making hiring decisions who have JDs, M.Eds, MBAs, etc.).

[ss1987]

Healthy discussion so far. In my case, I'm heading to Duke for an MEM (if you're not familiar, it's basically an environmental MPP).

 

In addition to the debt you may accumulate, try simply typing out what you'll get for your money. Is it literally just the degree (e.g. some coursework and not much else)? How many resources does the program have that can enhance your career prospects, marketability, and network? I'm quite pleased with how my money will be spent (roughly 65-70K after a decent funding package), as I'll be able to make it go a long way -- but that isn't the case for every program.

 

Further, your starting salary isn't going to be your permanent salary. If you chose to work in the public sector, PSLF and IBR might be plausible. It's hard to recommend them with absolute certainty given the machinations of the government, but it's in effect now and hopefully will remain so.

 

vincehoward: MPPs and similar degrees are still professional degrees. JDs don't confer an automatic ability to practice law, the bar exam does. And I'm sure you know the state of the legal market and the insane costs of law school. MDs are a much larger investment than our degree choices and a wholly different field. I also wouldn't put the MBA on a pedestal, either: there's been plenty of discussion regarding the utility of it and, frankly, MBAs are running around everywhere.

 

I'm deciding between Duke right now, which would also mean around 70k in debt, over less prestigious programs with better funding. Since you've already decided to take the plunge - would you mind telling me why you decided taking the debt and going to a stronger program such as Duke would be worth it?

[cunninlynguist]

I'm deciding between Duke right now, which would also mean around 70k in debt, over less prestigious programs with better funding. Since you've already decided to take the plunge - would you mind telling me why you decided taking the debt and going to a stronger program such as Duke would be worth it?

 

I haven't officially committed yet, but my decision hinges on the strengths and resources of the Nicholas School -- I assume your program is at Sanford? Nonetheless, I've been impressed by everything, ranging from academic offerings to integration with the Law School (Env. Law and Policy Clinic) and Sanford (Intl. Development Policy certificate), and career services. I'm wary of the cost, but it appears to be worth it.

 

Sanford seems to be excellent (I considered applying, but there isn't the same flexibility within the curriculum). What are your main concerns? The one thing I've noticed is that, unlike Nicholas and most other programs, there's no readily available employment data. I'm sure the Sanford students do fine, but it's always good to know what you can expect after graduating.

Edited March 11, 2013 by cunninlynguist

[ss1987]

I haven't officially committed yet, but my decision hinges on the strengths and resources of the Nicholas School -- I assume your program is at Sanford? Nonetheless, I've been impressed by everything, ranging from academic offerings to integration with the Law School (Env. Law and Policy Clinic) and Sanford (Intl. Development Policy certificate), and career services. I'm wary of the cost, but it appears to be worth it.

 

Sanford seems to be excellent (I considered applying, but there isn't the same flexibility within the curriculum). What are your main concerns? The one thing I've noticed is that, unlike Nicholas and most other programs, there's no readily available employment data. I'm sure the Sanford students do fine, but it's always good to know what you can expect after graduating.

 

 My main concern is if the 70k in debt is worth the potential benefits of going to Duke. Ive also been very impressed with the academic offerings, and the international development policy opportunities, but I dont know if the career options are that much better than coming out of a lower ranked school. I've heard that Duke has a fantastic alumni network, and I've spoken with recent grads who swear that going to a higher ranked program opens up more doors, but I also havnt seen any real employment statistics. I cant help but wonder if I'd be better off in the long run accruing less debt, but potentially missing out on some really great opportunities.

[elsie.emm16]

well-said, ridofme. 

 

Using those loan calculators is sobering. Taking out 100k in loans means payments of almost $1200/month for ten years. The best case scenario with an MPP is making about 70k. Most of us will be making closer to 55k. If I deduct 14k of loan payments from a 55k federal goverment job, I would actually be making less than I am in my current position with just a BA. IBR/PSLF seem promising, but that's a lot of pressure to make one specific path work out. And I'm not sure that I want my Plan A to be having the government forgive my debt after a decade of reduced payments.

 

Moreover, while I am currently content to live with roommates, take the bus, etc., I will be graduating in my late 20s. How could I ever buy a house, take a vacation, or support a family making those kinds of loan payments? What if I wanted to join a start-up, or work in a developing country, or take a year off to have a kid? What if I get laid off (very common in the non-profit world, where funding is never guaranteed)? Setting myself up to live paycheck-to-paycheck after obtaining a professional master's degree from an elite institution seems foolish at best. It gives you absolutely no room for error, and no freedom to change paths.

 

 

I’m wading in with my first post because this discussion is such a valuable one, that I’ve done a lot of thinking about, both with this personal choice, and during my stint working on higher ed policy.  I'm a pretty financially risk averse person, and fortunate enough to have strong funding offers.

 

More specifically I wouldn’t have felt comfortable with any more than probably 60-70k in debt (still more than an 8k bite out of an annual salary). . . like I said, I’m finanically pretty-averse, and fortunate to never have had a lifelong dream that would cost me six figures.  To avoid this, I would have kept my debt down by waiting a couple more years and saving up money and/or working during school.

 

Other professional programs (veterinary and law, to name a couple) have made headlines lately with the impacts of major supply-demand gaps that leave people under- and unemployed, and underwater with debt, and many grads never saw it coming, so thinking about this now is valuable.  Unfortunately, schools have no major incentive to adjust their enrollment to take these things into account; it’s easier to print brochures.   They risk damaging their brand a little, but there’s so little specific information on ROI out there, it’s not a substantial hit relative to tuition payments.

 

Another issue at play is the fish-pond dynamic.   Attending a lower-ranked school with more money may mean you will have an edge over the other students.  You can rock your internships, earn competitive awards, keep a stellar GPA, get your hands dirty with some really substantive research, earn the endorsement and mentorship of influential professors, etc.   What I’m saying is that I really believe that being a go-getter at a less-competitive school (big fish, smaller pond) can be made more valuable than being average or in the bottom third at Harvard (small fish, big pond).  

 

I also don’t feel comfortable banking on the loan forgiveness program. I’m getting this degree to be better able to serve the public in some way.  In an era of tight enough budgets, that money has to come from somewhere, and expecting the public to pay, directly or indirectly for this doesn’t feel right if I can avoid it, especially if I’m not aspiring to a career quite as undervalued as a teacher or social worker.  I realize the programs exist to help people serve, but I’m just a guilt magnet. 

[mintygreen]

Another issue at play is the fish-pond dynamic.   Attending a lower-ranked school with more money may mean you will have an edge over the other students.  You can rock your internships, earn competitive awards, keep a stellar GPA, get your hands dirty with some really substantive research, earn the endorsement and mentorship of influential professors, etc.   What I’m saying is that I really believe that being a go-getter at a less-competitive school (big fish, smaller pond) can be made more valuable than being average or in the bottom third at Harvard (small fish, big pond).

 

I have been thinking about this a LOT. I have a full-funding offer from a school that doesn't come even close to ranking for public policy--it's a lesser-known campus of a state school--and I suspect my experience there would be exactly the "big fish" scenario you describe. My funding offer includes a research assistantship that would let me have a big role in some really great-sounding work in almost exactly the field I'm interested in, with a professor who seems terrific. That being said, it's in a minor midwestern city that I don't particularly (read: at all) want to stay in after I graduate, and I suspect their network of connections doesn't extend far beyond that city and state. I also have concerns about the quality of the faculty compared to that of, say, a DC-area school staffed by policy practitioners with impressive resumes, as well as classmates who may or may not be as competitive. What I wonder the most is, will employers be more impressed by a degree from a school they've heard of, or by a degree from a school way off their radar that allowed for specific, hands-on, high-quality research and experience?

 

One thing I should add is that I also have two other decent offers from fairly well ranked schools, one of which includes a half research assistantship. I'd still have to pay a small chunk of money to attend those, plus living expenses, but nothing near full tuition. So I'm not really deciding between all funding or no funding (I've already ruled out those that offered me little to none), or research vs. no research. I guess I'm wondering if a small- to medium-size debt is worth it, given the option of no debt at all.

 

Thanks for sharing all your experiences, by the way--it's been really helpful to read what you all have been thinking about your own situations!

Edited March 21, 2013 by mintygreen