kateglynn Posted April 5, 2009 Posted April 5, 2009 Admitted to HKS (MPP), but no funding. Is the Harvard name, alumni network etc. worth being $130K in debt? Any thoughts?
purplepepper Posted April 5, 2009 Posted April 5, 2009 in this economy 130k is a lot of money. granted this is undergraduate story, but i have a friend who's brother was turned down for a federal loan to pay for college. he then had to take out a private loan, so he's having to pay back the loan while he's still in college. meaning he has 3 part time jobs on top of a full course load and under an incredible amount of stress. hard to believe. unless you are guaranteed a 6 figure job after graduation, 130k is a lot of money to be in debt.....it'll start to weigh heavily when/if you'd like to get married, have a car, or just want to go out and have fun! i wonder if anyone has opinions to the contrary though...
math123 Posted April 5, 2009 Posted April 5, 2009 It depends how much the average salary is after graduation. Suppose you take out 130k @ 8.5 percent over 10 years. Your monthly payments would be about 1600. The minimum recommended salary to do that is in the neighborhood of 242k. Maybe you can live frugally and do much better than that, but it's a rough estimate. Use this: http://www.mappingyourfuture.org/paying ... ulator.htm
kateglynn Posted April 5, 2009 Author Posted April 5, 2009 I do know that the Kennedy school employment statistics are impressive, and that grads tend to make more off the bat then grads from other MPP programs. So, the decision I have to make is, Harvard with no funding, or Columbia, which offered a $20K fellowship for the first year. Any HKS/SIPA grads out there (or anyone else for that matter) with a thought?
linden Posted April 5, 2009 Posted April 5, 2009 I do know that the Kennedy school employment statistics are impressive, and that grads tend to make more off the bat then grads from other MPP programs kateglynn: I am in the same situation you are facing regarding HKS. Nevertheless, I have not found any starting salary data to suggest that HKS grads make more (or at least significantly more) than graduates from other MPP programs, at least to start out. Where did you find this info? Thanks!
stigMPA Posted April 5, 2009 Posted April 5, 2009 It can be summed up in two simple calculations: 1) Will you make $130k more over the course of your career than if you had a different degree? - and If you are not absolutely certain of #1 - 2) Would you accept a potential loss of up to $130k to have the degree (for whatever reason)? Based on the advice I've had on this board and elsewhere, massive debt doesn't make much sense for those going into government or nonprofit work, but you know more about your own priorities than I do.
Stephen33 Posted April 5, 2009 Posted April 5, 2009 The difference has to be a lot greater than $130k "over the course of one's career" to make it financially worthwhile, due to the time value of money.
math123 Posted April 5, 2009 Posted April 5, 2009 The difference has to be a lot greater than $130k "over the course of one's career" to make it financially worthwhile, due to the time value of money. Right. Loan re-payment has a finite lifetime--much shorter than one's career. How much does someone with an MPP typically make? If you aren't going to make 200k a year, you theoretically can't afford a 130k loan. Simple as that. Do what you want, but you should learn from current events: don't take out loans you can't afford!
liszt85 Posted April 5, 2009 Posted April 5, 2009 Go to Columbia, graduate without debts! Columbia is not bad at all.. if it will allow you to graduate without a debt which few people manage to do these days. If you try to look too far into the future, you will never get to live your present. As of now, I believe that the best thing would be to go where the money is and Columbia is a great option if that's where the money is.
Stories Posted April 6, 2009 Posted April 6, 2009 Does prestige matter to YOU? Ask yourself that, then weight in the rest of the facts.
jduds Posted April 6, 2009 Posted April 6, 2009 If this was Harvard Law, Harvard Med, or the HBS, this is a pretty easy yes. For the Kennedy School, I'm really not sure. It seems like you'll have to take out quite a bit of debt either way, but is the Harvard name/alumni base worth the additional $20k a year? Personally, I don't think so. I think in public policy circles, SIPA probably is of similar repute, and has the same robust alumni base. I think either way, you'll make out alright. Good luck with your decision!
slowbro Posted April 7, 2009 Posted April 7, 2009 The difference has to be a lot greater than $130k "over the course of one's career" to make it financially worthwhile, due to the time value of money. And don't forget the substantial interest on the loans that math123 mentioned.
DefinitelyMaybe Posted April 7, 2009 Posted April 7, 2009 Why is Harvard being so stingy with financial aid?
ChrisC Posted April 7, 2009 Posted April 7, 2009 They're probably being stingy with fellowships because they lost a lot of their endowment this year. At least, that's what I keep telling myself. A question- would you be graduating from Columbia with NO debt, or just 20K less than at Harvard?
juilletmercredi Posted April 8, 2009 Posted April 8, 2009 SIPA is a very good school as well, and has a strong alumni network. A degree from there will not be as prestigious as Harvard's, but will certainly be notable and get you excellent positions. And as already mentioned, $130,000 in debt is a lot especially if you don't plan to make $200K+ to pay off that hefty monthly bill. Also, are you even sure that you can get that much in loans? Stafford loans cap out at $20,500 a year for graduate students, and assuming that $130,000 bill is evenly split between two years, that will leave you with an extra $44,500 to finance each year -- either through private loans (if you have the credit to do so, or a creditworthy cosigner) or whatever other means. Personally, I would head towards the money.
don Posted April 8, 2009 Posted April 8, 2009 Did any1 apply for the Reynolds Fellowship? If so, did you get a response from them yet?
vannik Posted April 9, 2009 Posted April 9, 2009 I don't understand why people think a $1600 a month student loan would be impossible if you were making $100,000. Assume take home of 5500 a month. . . can you not survive off of 3900? I survive off $1340 take home a month. $1,000 a week isn't bad. It's equivalent to someone making $72k a year. And this is assuming you set your payments over 10 years, which would be a bad idea. FYI background in this is I was a first generation college student and signed up for 5 years at a private university. Private loan bill is about 80k. My payment would have been $1250 a month after I finished undergrad. The best way to pay back a large loan is to spread out the payment to as long as you can and pay the minimum. Then, with the remaining money you were to pay over ten years (Say 10 years was 1600 a month and 25 years was 1000 a month) you take 600 and put it towards your highest interest private loan and kill that first. You don't want 1600 getting spread between private and gov't loans. Min on gov't max on private. P.S. Once you make enough money to pay your basic bills, everything else is gravy. If I had 200k job bringing home 11000 a month, and 3200 on loans, you'd have 7800 to live off of a month. Would living off anything less than 7800 be living frugal? That's 7800 a month. That's a TON of money. If you think that's needed to survive, you must be high. That 8% calculator is for people bringing in money on the order of $40,000 where anything more than 8% of their GROSS income would kill them. This is NOT the case for people making over 100,000. My background in this is about 20 friends in pharmacy starting out with 150k in loans and 100k in salary. Single and living the good life.
vannik Posted April 9, 2009 Posted April 9, 2009 And the 40k/year example 8% gross salary pay back: Take home: 2166 a month. 8% gross income loan is $267/mo. left with $1900. Take the 100k/year and 1600/mo pay back (19.2% gross salary pay back) for 40K/year salary: Take home: 2166 a month. 19.2% gross income loan is $640/mo Left with 1526/mo. This would be very hard to live off of. That tool is to help people who don't understand math and the "average income" person be able to figure out their student loan debt. 80% of 1mil a year to pay back in loans would leave you with plenty of money to live off of. Hope this made sense to some people.
younglions Posted April 9, 2009 Posted April 9, 2009 vannik - Why are you talking about 100-200K salaries? Most public servants will never see these numbers. For a very large percentage of HKS graduates, $1,600 a month in students loans would substantially exceed impossible. Also "Min on gov't max on private" isn't the best advice in a down economy. Private loans give borrowers very little hardship protection versus government loans.
vannik Posted April 9, 2009 Posted April 9, 2009 If you take out money through sallie-mae even the private loans fall under the umbrella of deferment. You get 36 months of "hardship" where you can deffer your loans. You'd rather pay off private loans first, if you have both private and gov't, even with your example. Maybe you mis-read what I said? If you must have loans and pay them back, you want to pay the minumum required that gets spread across all your loans, and then maximize your payment on the private ones to get rid of them faster since they have a higher interest rate, ect. If you read the thread, people said you would need a job over 200,000 to pay 1600 a month in student loans. I have no clue how much the job the person will obtain will pay, I'm just saying that the numbers flying around this thread are incredibly inaccurate. Granted 130,000 in debt fo a job that pays 50k is not going to work, but going 130k for a job that pays 100k would not be that bad at all. You just need to be smart. Once you get a job you should save 6 months worth of rent and bill paying regardless of your field incase of a layoff. The person should do a comparison of estimated income vs. loans and savings instead of reading people's shady math and taking it for fact like many of the people reading this have.
math123 Posted April 9, 2009 Posted April 9, 2009 vannik, your writing is borderline nonsense. I didn't manage to digest one bit, except for The best way to pay back a large loan is to spread out the payment to as long as you can and pay the minimum. You couldn't be further from the truth. That's the worst way to pay off a loan!
vannik Posted April 9, 2009 Posted April 9, 2009 My writing is nonsense? Ok. Worst way to pay off a loan is paying your highest interest loans first? Ok. You don't understand how you don't need 200,000 a year to pay 1600 a month? Ok. You also don't understand that $7200 a month take home salary might be slightly above the poverty line? Ok. A senior VP of a large financial estabilishment also mentioned that paying the minimum on you 5.5% loans and maximum on your 9% loans was the best way to pay back your debt. If you don't believe this fine, but I did the math, as well as take the advice of a man who makes more money in a year than I'll make with a PhD in 20 years. Paying the minimum is good because your payments are spread across EACH LOAN EQUALLY. You pay a % of every loan equally. So you pay 5% of each loan so after you're done paying the standard way your lender wants you to, you pay off all your high interest loans at the same time as your low interest. Dragging out the payment 10 years lowers your monthly payment that gets divided equally ALLOWING YOU TO PAY THE DIFFERENCE ONTO YOUR MAX INTEREST LOAN. So you pay the same ammount per month that you would have if your loans were over 10 less years, just killing off higher interest loan first. If you don't understand this, that's fine. Sit down with someone who's good with numbers and do it yourself. If you don't want to believe me, spend more money than you need to to pay back your debt. Just note: I'm not saying to pay the minimum over the longest ammount of time, like you wrote. I'm saying when you do that, you pay an extra large some of money (about 45% of your minimum more) and make sure you apply that to your highest interest loan. That money gets placed against the principle of your highest interest loan, making the money you are spending hit the principle of the higher interest loans before the lower interest, saving you money.
vannik Posted April 9, 2009 Posted April 9, 2009 Please try communicating in Korean sometime (and I'm an engineer)! Sorry for the messages, I just wanted to correct some very bad mathematics. I will refrain from posting here any longer.
Jordan+AirForce1 Posted April 9, 2009 Posted April 9, 2009 vannik - You're correct, I did misread your post. Your supercilious attitude and poor mastery of the English language makes it difficult to decipher your exact intentions. The latter point is not a complaint. I'm almost 100% sure that you're an international student, and given that, your English is quite good. Just leave the haughtiness behind. What are you trying to incite here? I am extremely curious how you concluded he is an international student, because I have no idea. EDIT// alright, so he IS an international student.. Whatever. EDIT2// alright, after reading some of vannik's posts in other topics, i kinda take back what i said above..
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