Less Debt or Better Program?

[hikarizx]

Hi everyone,

 

I'm sure a lot of people are concerned about the cost of funding grad school, and I'm wondering if anyone has any thoughts/advice. So I was accepted by my state school's MPA program and they offered me a GA position with a stipend and tuition remission. I could also live at home, which means I shouldn't have to take out any loans for my degree. I applied to a lot of other schools but none of them offered much merit-based funding. (One school offered in-state tuition, which is helpful, but still requires me to pay in-state plus the cost of rent, etc.) The in-state school is definitely a good school and has a good reputation, but their public policy department is not well-known. I have about $30,000 left in loans from undergrad plus a car loan, so I'm concerned about taking on too much additional debt when I intend to pursue a career in public service. I'm just wondering what everyone else's thoughts are regarding in-state school and no additional debt vs. out-of-state with a well-known program. I am putting it in this forum because I'm wondering about this specifically in regards to the MPA/MPP degree.

 

Thank you for reading and for your thoughts!

[kooyah]

Debt is not fun.

 

I think the key thing to analyze with a school is their employment prospects. Schools can help you land that first job but after that it's all on you to perform and work your way where you want to go. That said, I'd see if I can reach out to alumni at your state school who can better comment on employment prospects and help you make a better assessment on your decision.You might build some new relationships and with it possible new opportunities. Also see if there's anything about employment statistics each school has published. It all depends on where you want to go and whether your state university can provide that opportunity. If they can, take the money.

 

Debt is not fun. 

[outofspace]

I'm asking myself the same thing right now, though for IR programs. Debt can be a huge burden, especially as someone who is planning to work for the government or an NGO--but then again, it's hard not to be seduced by prestige and wonder if that top-ranked school might not open some doors that could make the debt worthwhile. Obviously I don't have answers, but you're not alone anyway. It'd be interesting if any current students or alumni on here could speak as to how much school brand matters.

[ir_gradstudent]

The difference between entry-level Foreign Service Officer (who has less than 5 years relevant prior work experience) at Bachelors vs Masters level is roughly $6,000 per year, which means you're pulling in about $500 extra each month of base pay. Most other gov't jobs will likely be similar. A $40k Stafford loan over a 10-year period requires you to pay about $500 a month. Just some ballpark numbers. I haven't done anything more than back-of-the-envelope yet.

 

Also keep in mind that many U.S. Gov't jobs have Student Loan Repayment programs that could pay out up to $10,000 a year alongside your own payments, I believe. Each gov't Department will have different loan repayment program levels. I think some Departments have very minimal levels of loan repayment benefits, while others have much more.

 

Play around with a student loan calculator and see what sort of monthly payments you could be looking at. This has scared me into making sure I minimize my student loans as much as possible. In the example above, assuming you made just the roughly $500 a month payment for 10 years, you'd end up paying $55,000 back on a $40,000 loan! That's comes to a sickening 37% of the total sum being pure interest! Now that 37% can be reduced drastically by paying more each month than is required and paying it off early (due to the effects of compounding interest, and student loans don't have any penalties for paying them off early), but that is still truly shocking for someone like me who never had to deal with student loans for undergraduate.

Edited March 17, 2015 by ir_gradstudent

[LYJ]

USC (as far as I know, this school ranks the highest among the four in public policy) offered me half-tuition scholarship which still ends up with about 20K/yr.

 

Duke Sanford School offered me 20K scholarship + assistantship = 22K/yr

 

Cornell offered me 10K scholarship =21K/yr. 

 

And today, Uni. of Minnesota Humphrey School offered me non-resident tuition waiver + 10K =7K/yr.

 

 

Above are the yearly tuition fees (leaving out living expenses) 

 

 

 

The only thing I am most worried about is the reputation of each school. 

 

So is it true that the ranking of each program matters more than the reputation of the school? (USC->Minnesota=Duke->Cornell is the current ranking, but this may be slightly wrong)

 

I was pretty sure that was the case but in recent weeks I've read that Cornell and Duke will be an advantage to getting a job in the US. 

To be honest, I am kind of afraid I'll be stuck in Minnesota forever.

 

I want to get your advice on how employers in the US general (it's very broad, I apologize) react to the reputation of universities and how that will affect my career.

 

I also want to get some advice on anything, ANYTHING on graduate schools, jobs related to policy, or any of the universities above. 

 

[economixed_policy]

Interesting discussion. I'm going through something very similar. I have a masters in economics already and 6 years of work experience. In for Chicago Harris for full tuition for both years. In for HKS but no bews of funding yet. How much debt is worth taking? I'm an international student. Harris would mean $20k debt per year. HKS potentially much more. How much "premium" is worth it? I realise I'll need a U.S. cosigner for my loan but the HKS MPA fits where I am in my career, while a lot of Harris would be stuff I did at my economics grad program. Any thoughts very welcome.

[chocolatecheesecake]

A word of caution: better is a highly subjective term, and going by rankings is the first step in figuring out what "better" means to you. Around a certain echelon of schools, the rankings really lose meaning depending on what you really want.

 

I think employers could respond fairly well no matter which school you attend - Cornell, Duke, or USC, because they all have good national (and international) reputations. I'm not sure about Minnesota because I haven't heard too much about it, but do a search and see if you find Minnesota MPP alums at the type of organizations or in the sector that you're interested in. I highly doubt you'll be stuck in Minnesota forever just because you got a Minnesota degree. 

 

If you want more specific feedback on careers and jobs in public policy, check out the career services websites of those schools and contact the people there to learn about the organizations people intern at/ work at, some alumni stories, etc. etc., some basic reassurance that you will not starve or go into endless debt repayment after you graduate. 

 

Finally, I've seen somewhere on this forum that a good rule of thumb about debt is that it should be less than what you expect to make your first year after graduating with the degree. For example, if you know you're going to gun for a consulting firm type job that pays $60-70K right afterward, it might be more acceptable to have a higher level of debt. It's not a hard and fast rule, and it won't make sense for everyone, but I think it's as good a guideline as any.

[crisisdiplomacy]

Interesting discussion. I'm going through something very similar. I have a masters in economics already and 6 years of work experience. In for Chicago Harris for full tuition for both years. In for HKS but no bews of funding yet. How much debt is worth taking? I'm an international student. Harris would mean $20k debt per year. HKS potentially much more. How much "premium" is worth it? I realise I'll need a U.S. cosigner for my loan but the HKS MPA fits where I am in my career, while a lot of Harris would be stuff I did at my economics grad program. Any thoughts very welcome.

 

 

In my opinion, I would choose the better program. Why would you go into some debt by going to Harris, when you're only going to take somewhat redundant courses that you've already explored in you Econ graduate program? If HKS - MPA (which is incredible, by the way!) fits in your career plans and goals the most, than choose it. Although debt is significant I think it plays too much of a part in our choices. Call me idealistic, but wouldn't you want to go to a potential dream school that can open a lot of doors for you and is truly what you want, than save a few thousand only to take coursework you've already done? It seems like the choice is salient here. But that's just my opinion! For some, debt plays a lager role in their choices, and that's understandable as well. 

[economixed_policy]

In my opinion, I would choose the better program. Why would you go into some debt by going to Harris, when you're only going to take somewhat redundant courses that you've already explored in you Econ graduate program? If HKS - MPA (which is incredible, by the way!) fits in your career plans and goals the most, than choose it. Although debt is significant I think it plays too much of a part in our choices. Call me idealistic, but wouldn't you want to go to a potential dream school that can open a lot of doors for you and is truly what you want, than save a few thousand only to take coursework you've already done? It seems like the choice is salient here. But that's just my opinion! For some, debt plays a lager role in their choices, and that's understandable as well.

Thank you - that is very helpful. I think a lot of why you've outlined is stuff I am thinking as well. I do want to go to HKS for all the same reasons you mention. I guess a lot now rides on HKS' financial aid offer. I truly hope that makes it possible for me to attend.

[Nippon12]

 

In my opinion, I would choose the better program. Why would you go into some debt by going to Harris, when you're only going to take somewhat redundant courses that you've already explored in you Econ graduate program? If HKS - MPA (which is incredible, by the way!) fits in your career plans and goals the most, than choose it. Although debt is significant I think it plays too much of a part in our choices. Call me idealistic, but wouldn't you want to go to a potential dream school that can open a lot of doors for you and is truly what you want, than save a few thousand only to take coursework you've already done? It seems like the choice is salient here. But that's just my opinion! For some, debt plays a lager role in their choices, and that's understandable as well. 

 

Well, I'm going to play the role of Devil's Advocate foil to your idealist here!

Speaking as someone who has been in semi-major debt before, knows plenty of people paying for "prestigous" degrees, and has seen the inside of a handful of world-renownded institutions, I would have to disagree with the idealistic standpoint. Don't get me wrong - name/brand does matter, but in the world of policy (with public sphere salaries), ~50-100k+ of debt is a cinderblock tied around the neck of your future financial well-being.

Princeton, Harvard, Tufts, etc., etc. - all these programs are fantastic and would indeed open a ton of doors. However, no amount of open doors could make trying to pay off 100K+ of debt on a 60k salary a good idea. I know everyone has their dream schools and programs, but I really urge you to take a pragmatic look at your finances and what you plan to do before just "going for it".

I know it's not the sexiest answer in the world, but the truth is debt can really make or break a career. We live in unfortunately pragmatic times, and an Ivy League diploma is not necassarily a one-way ticket to easy street any longer. This isn't law or business or medicine - it's policy, a field no less important but definitely less paid (most of the time, at least).

I'd really urge you to think long and hard about how much you're willing to debt you're willing to leverage your future against, if it comes to that.

Hopefully, though, you'll get a great finaid package and you can tell me to shove it! Fingers crossed !

[Guest]

In my opinion, I would choose the better program. Why would you go into some debt by going to Harris, when you're only going to take somewhat redundant courses that you've already explored in you Econ graduate program? If HKS - MPA (which is incredible, by the way!) fits in your career plans and goals the most, than choose it. Although debt is significant I think it plays too much of a part in our choices. Call me idealistic, but wouldn't you want to go to a potential dream school that can open a lot of doors for you and is truly what you want, than save a few thousand only to take coursework you've already done? It seems like the choice is salient here. But that's just my opinion! For some, debt plays a lager role in their choices, and that's understandable as well. 

 

This is my mom's mindset. She's all about that mindset of ignorning prices and being open to pursue opportunities that will benefit you the most. I'm on the side where I have not received any type of funding despite gaining acceptances. While I have not applied to Ivy Leagues, I've been accepted into 'prestige' International Affairs schools that I had very little doubt of getting accepted into as a person still in undergrad.  Despite not getting funding, I've received personal calls and emails by staff members from American SIS and  and GWU Elliott School congratulating me. So, at lest they care about their admittees in a way...whether they received funding or not.  I still don't know though...and have a major decision to make.

 

I also recall reading somewhere on this site that an acceptance without funding is equal to a rejection. While not receiving funding sucks, I think that is partial BS. Do you know how many applicants frequently get rejected form places like Harvard, Stanford, Princeton, etc? A lot. I can understand debt being a nightmare, but I wouldn't have that type of mindset.

 

I guess it also depends on your career field too...I know of several careers (especially within a federal government agency) that has programs to help you pay off loans within a period of time. That's another point to consider in my case.As for myself in this moment, I guess that I could possibly sit out for a year and work. But, in what? I live in the wildnerness of a  'hick and country bumpkin' state and do not have the resources to go traveling to other places in order to intern, volunteer, or research anywhere within my field (unless it is going to be grad-school related). I've recently found one 'slight' Plan B out there for me though, but it's not certain.Peace Corps would have been nice, but there's a policy out there that prevents me from joining. So, I'm thinking about these factors too.

 

I guess it boils down to how much you can handle. I wouldn't let the pressure on this site (it's not really on this section, but other ones) dictate how you decide to pay for your studies. 

Edited March 18, 2015 by Guest

[Guest]

Is there anyone out there who is totally debt-free (undergrad, car, house, whatever), received no/low funding, and is also debating whether or or not to take on the debt from a Masters? That's where I stand at.

Edited March 18, 2015 by Guest

[intldvpt123]

Is there anyone out there who is totally debt-free (undergrad, car, house, whatever), received no/low funding, and is also debating whether or or not to take on the debt from a Masters? That's where I stand at.

 

I am in that situation. I have to pick between a $45+K loan from a prestigious school (George Washington U) or a $2K tuition cost from a lesser renowned school (United Nations Maastricht University).

 

I am debt-free, but I had a $5,500 loan in undergrad. I know the loan was small compared to most people (and I am very thankful for that). However, I am know the burden. By the time I started repaying my loan, I had almost $1,000 in JUST interests... Even if people say interest rate on student loans is low, 5 or 6% accrues faster than you think. I can't imagine what having a 100K loan would be like...

 

I also try to think longterm. My coworker is 27, she has several thousands dollars of debt from undergrad and she had a baby recently. It was unexpected, but life happens. She had a complicated pregnancy and now, she has not only student loans to pay off, but medical bills too... I know this might seem a bit extreme, but have this type of stuff in mind.

 

I am happy I am in a position that no matter what school I choose, I will not regret it. I am definitely feeling like not having any debt after graduating will give me more freedom. What if I want to travel for a while before getting back into work? I don't want to be the slave of my loans and feel like I have to work for ten years to pay them off, even with a good job (because you always have other expenses like housing, car, kids, healthcare, etc.).

[kaseyleigh]

I agree that debt is the worst. I have about $20K or so from law school already (luckily none from undergrad), and now I will be taking on about $40K more for grad school (unless some magical fellowship comes my way). Remember that student loan debt is flexible, however, with repayment options- way more so than credit card debt, etc. I don't relish the idea of paying things off for 25 years, as may very well be the case, but the payment would not be huge each month that way. With student loan debt, also, you are investing in human capital, which makes it a much better investment than, again, credit cards and all the things you buy with those. It is still definitely a heavy burden, but I don't think you should let it stop you from doing something you really want to do that can set you up for a great job in the future! If you have a lot of debt, it just makes it all the more important to really network and set yourself up as best you can for graduation.

[manutdftw]

This is my mom's mindset. She's all about that mindset of ignorning prices and being open to pursue opportunities that will benefit you the most. I'm on the side where I have not received any type of funding despite gaining acceptances. While I have not applied to Ivy Leagues, I've been accepted into 'prestige' International Affairs schools that I had very little doubt of getting accepted into as a person still in undergrad.  Despite not getting funding, I've received personal calls and emails by staff members from American SIS and  and GWU Elliott School congratulating me. So, at lest they care about their admittees in a way...whether they received funding or not.  I still don't know though...and have a major decision to make.

 

I also recall reading somewhere on this site that an acceptance without funding is equal to a rejection. While not receiving funding sucks, I think that is partial BS. Do you know how many applicants frequently get rejected form places like Harvard, Stanford, Princeton, etc? A lot. I can understand debt being a nightmare, but I wouldn't have that type of mindset.

 

I guess it also depends on your career field too...I know of several careers (especially within a federal government agency) that has programs to help you pay off loans within a period of time. That's another point to consider in my case.As for myself in this moment, I guess that I could possibly sit out for a year and work. But, in what? I live in the wildnerness of a  'hick and country bumpkin' state and do not have the resources to go traveling to other places in order to intern, volunteer, or research anywhere within my field (unless it is going to be grad-school related). I've recently found one 'slight' Plan B out there for me though, but it's not certain.Peace Corps would have been nice, but there's a policy out there that prevents me from joining. So, I'm thinking about these factors too.

 

I guess it boils down to how much you can handle. I wouldn't let the pressure on this site (it's not really on this section, but other ones) dictate how you decide to pay for your studies. 

 

Why not go teach English and work overseas? There are lots of organizations in Asia that will pay for flights, in country expenses and a decent salary. The experience you'll get (and I say this without know anything about your personal background) of living and working in another country will not only help you to realize what you want to study but will also help in getting a better financial aid package. You may also find other opportunities while you're abroad. I can't imagine how hard it may be to land a position in IR post-Masters graduation without overseas living and working experience which is why I always tell recent undergrads and graduating seniors to take more time before deciding to go to grad school (at least for IR). Just my 2 cents. 

Edited March 18, 2015 by manutdftw

[thoughtprovoking]

Hi everyone! I'm a long time lurker and first time poster.

 

I am grateful to have been accepted to some fantastic programs this cycle. Like all of you, I'm considering how to evaluate funding vs. academic programs for MPP/MPA.

 

Duke Sanford offered me full tuition, which is hard to turn down. However, I was also accepted to Harvard Kennedy, which has long been my dream school so is also hard to turn down (although no word yet on funding). Chicago Harris also offered me a partial tuition fellowship. 

 

Because I received a full ride merit scholarship for undergrad, I am lucky enough to have no existing debt.

 

Any thoughts on what someone else would do in my shoes?

[DCB]

^^^this might sound like an over simplification, but if you can go to Harvard...go to Harvard. I think thats one of the few schools that justifies the incredible cost.

[crisisdiplomacy]

I second this ^^^

[wcw]

Hi everyone! I'm a long time lurker and first time poster.

 

I am grateful to have been accepted to some fantastic programs this cycle. Like all of you, I'm considering how to evaluate funding vs. academic programs for MPP/MPA.

 

Duke Sanford offered me full tuition, which is hard to turn down. However, I was also accepted to Harvard Kennedy, which has long been my dream school so is also hard to turn down (although no word yet on funding). Chicago Harris also offered me a partial tuition fellowship. 

 

Because I received a full ride merit scholarship for undergrad, I am lucky enough to have no existing debt.

 

Any thoughts on what someone else would do in my shoes?

 

I'm in the same boat. I was accepted to Kennedy, which is a dream, but I would have trouble justifying the price tag if I'm not offered financial aid. I'm planning to talk to current students/alums at New Admit Day to get their thoughts.

[economixed_policy]

  

Well, I'm going to play the role of Devil's Advocate foil to your idealist here!

Speaking as someone who has been in semi-major debt before, knows plenty of people paying for "prestigous" degrees, and has seen the inside of a handful of world-renownded institutions, I would have to disagree with the idealistic standpoint. Don't get me wrong - name/brand does matter, but in the world of policy (with public sphere salaries), ~50-100k+ of debt is a cinderblock tied around the neck of your future financial well-being.

Princeton, Harvard, Tufts, etc., etc. - all these programs are fantastic and would indeed open a ton of doors. However, no amount of open doors could make trying to pay off 100K+ of debt on a 60k salary a good idea. I know everyone has their dream schools and programs, but I really urge you to take a pragmatic look at your finances and what you plan to do before just "going for it".

I know it's not the sexiest answer in the world, but the truth is debt can really make or break a career. We live in unfortunately pragmatic times, and an Ivy League diploma is not necassarily a one-way ticket to easy street any longer. This isn't law or business or medicine - it's policy, a field no less important but definitely less paid (most of the time, at least).

I'd really urge you to think long and hard about how much you're willing to debt you're willing to leverage your future against, if it comes to that.

Hopefully, though, you'll get a great finaid package and you can tell me to shove it! Fingers crossed !

 

Thank you for your candour - I appreciate it. This is helpful - even though much your words are the thoughts inside my head - it always helps to hear another say it out.  I know how debt can be a handicap on pratically anything you might want to do, so I am generally cautious of walking into somethign - particularly of this magnitude.  I guess its just a difficult decision when you have a program vs. finances situation.

[pavlik]

Debt can make or break a career and your life. If your total debt is equal to or less than your anticipated starting salary, then it's manageable. That doesn't mean that it will be easy to live. If you're considering $100,000 or more in total loans, then that equates to $1,200 per month in loan payments. That's untenable on the salaries for most jobs an MPP/MPA/MIA leads to. With that load, you're going to have trouble saving any money, taking vacation, buying a house (good luck getting approved for any sort of loan), and so on. Suppose you took out $100,000 in loans for your master's, then take a GS-9 job in DC with the federal government after graduation (just as an example):

 

That doesn't mean that you should go to wherever is cheapest, but just keep in mind what debt means. It's easy to discount it now, 2 years away from when you'll have to start paying it, but taking out these loans can really affect the rest of your life. You could be stuck at a job you hate for the paycheck, stuck in a town you hate for the job, unable to take that trip to wherever you've wanted to, and so on.

[hikarizx]

I'm glad other people received help on here, but I'd like to clarify on my personal situation in case anyone has info specifically for me..

 

I got into some good policy schools - Michigan, Washington, Texas, Minnesota, Wisconsin.. but I got very little funding. Not necessarily "big name" schools but they are well-respected for their policy programs. The one that offered full funding is my local state school, UConn. It's a good school and the program is good but just not on the same level as the others. I'm also not sure if I have the opportunity to study exactly what I want to study. I'm interested in international/global public policy and while UConn has options to take electives in other departments, the program isn't pre-designed for this type of policy like some of the other schools. (For example, I was accepted into the International Public Affairs program at Wisconsin, which is specifically focused on my policy area of interest.) Still, it's the same degree, and I think if I do my research I can probably find courses in other departments on the subjects I'm interested in.

[leon32]

Debt can make or break a career and your life. If your total debt is equal to or less than your anticipated starting salary, then it's manageable. That doesn't mean that it will be easy to live. If you're considering $100,000 or more in total loans, then that equates to $1,200 per month in loan payments. That's untenable on the salaries for most jobs an MPP/MPA/MIA leads to. With that load, you're going to have trouble saving any money, taking vacation, buying a house (good luck getting approved for any sort of loan), and so on. Suppose you took out $100,000 in loans for your master's, then take a GS-9 job in DC with the federal government after graduation (just as an example):

 

That doesn't mean that you should go to wherever is cheapest, but just keep in mind what debt means. It's easy to discount it now, 2 years away from when you'll have to start paying it, but taking out these loans can really affect the rest of your life. You could be stuck at a job you hate for the paycheck, stuck in a town you hate for the job, unable to take that trip to wherever you've wanted to, and so on.

 

True, but with income based repayment plans, you would not have to (nor probably should you) pay that much per month, and depending on where you are working the debt will potentially be forgiven after 10 or 20 years. If it were not for those programs, you would be absolutely correct though.

[WinterSolstice]

Debt can make or break a career and your life. If your total debt is equal to or less than your anticipated starting salary, then it's manageable. That doesn't mean that it will be easy to live. If you're considering $100,000 or more in total loans, then that equates to $1,200 per month in loan payments. That's untenable on the salaries for most jobs an MPP/MPA/MIA leads to. With that load, you're going to have trouble saving any money, taking vacation, buying a house (good luck getting approved for any sort of loan), and so on. Suppose you took out $100,000 in loans for your master's, then take a GS-9 job in DC with the federal government after graduation (just as an example):

 

That doesn't mean that you should go to wherever is cheapest, but just keep in mind what debt means. It's easy to discount it now, 2 years away from when you'll have to start paying it, but taking out these loans can really affect the rest of your life. You could be stuck at a job you hate for the paycheck, stuck in a town you hate for the job, unable to take that trip to wherever you've wanted to, and so on.

 

These are all spot on points. I understand wanting to attend a dream school, but it's really not wise to take out six-figure debt for a degree that does not command the same salary as an MBA or JD. It is true that people can and do attend very expensive schools all on loans, and I personally do not judge people who make that choice, because I don't know their career plans or the factors that went into their decision. But for me, I personally could not take that high of a loan burden. Debt is an unfortunate reality of education today (at least in the US). Most people will have to take substantial debt. But I think it's important to take the time to figure out how much debt you can handle, and what having that amount of debt means for your career and lifestyle.

 

I personally have found repayment estimators to be very helpful. It's also useful to estimate what your expected starting salary (hard to know, given employment data at a lot of these schools are almost certainly inflated to some degree) would be after taxes, subtracting the loan burden and looking at how much you would have left to live on. Grad school is an investment, and for me, I want to know that investment is going to get me to a better standard of living than where I'm at now. Here is a repayment estimator: https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action and a salary calculator: http://www.adp.com/tools-and-resources/calculators-and-tools/payroll-calculators/salary-paycheck-calculator.aspx for any who might find it useful!

[hikarizx]

True, but with income based repayment plans, you would not have to (nor probably should you) pay that much per month, and depending on where you are working the debt will potentially be forgiven after 10 or 20 years. If it were not for those programs, you would be absolutely correct though.

 

I'm planning on going into public service but I'm afraid of banking on the 10 year repayment scheme. If I were to lose my job and be forced to work in a non-public service position, or if I have kids in the next ten years or something, I'm not sure what would happen..