Is a target school worth $150-200k in debt?
I see a lot of posts promoting target schools, but as a student who wants to go into S&T or ER, but does not care if it’s in NYC, is it worth it to take out $150-250k in additional student loans to go to a school like Indiana/UVA/Michigan compared to a state SEC school (not UGA/Florida) that would cost $30k max in debt?
Initial Disclaimer: I am a rising junior in college at a semi-target. I will be interning at a large AM firm (Wellington/Fidelity/T. Rowe) as an ER intern next summer. I know almost nothing but I can offer some thoughts to think about. This will also hopefully bump your thread.
I do not have the experience to confirm this, but after going through the recruitment process, it seems like a target school may be more helpful to those targeting ER (rather than S&T). MIFID II has shrunk intern classes and I would estimate that there are probably less than 125 intern spots across the large MM and BB banks in NYC. I can't speak for the number of ER spots outside of NYC but I would assume they are even more limited.
I do not attend any of these schools but I would probably place UVA and Michigan one tier higher than Indiana. I am not saying Indiana is not a great school, but I think its target status might be debated whereas the other two are not.
I think you should look at the strength of the alumni network, the OCR opportunities and the extracurricular opportunities (used to build up your resume as an underclassmen) at the SEC school you are considering. Using those factors, determine how feasible it would be for you to actually land interviews.
I suggest you consider that your earnings capacity will be high in either of these industries (but lower than IB). I think assuming you make 65k out of college would be fair (in ER). $150k might be feasible to pay off relatively quickly considering bonuses will pump that number and comp will improve over time. However, that's still a lot of debt (especially if its closer to $250k). If you think you have the ability to break in from the SEC school, then that might be the smarter route. That most likely will come down to your psychological comfort will a more difficult path or your comfort with taking on that debt.
I know my thoughts were a bit messy but hopefully I have provided at least some insight.
Best of luck.
Branching off of this, first year base at a BB will be closer to $80-90k. Second, UVA/Mich are definitely the best choices in terms of your options, but it’s hard to tell you what the right financial decision will be. I personally went to a large SEC state school and managed to get to where I am. Though admittedly the school played very little part in getting my first job (mainly networking and some solid internships). There is higher risk of not getting the opportunities you want out of college if you decide against taking on the $200k in debt, but it definitely does not rule it out. Send me a PM if you want to discuss additional details.
I’m interning on the sellside at a top BB right now. Maybe the buyside is different, but I didn’t find that my school (a T50 non-target) mattered very much during recruiting (Good or bad). In my experience, ER analysts are lot less concerned about pedigree than bankers. As long as you know your shit, you’re golden. Also, I noticed that a lot of my interviewers didn’t go to target schools either.
That said, you may have an easier time learning “your shit” at a better school. But that’s probably best judged by evaluating your abilities and speaking with current students at each school
One of these is not like the others.
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