How much debt is too much debt?
Where’s the cutoff? Debating between UVA, NYU, and UMD instate. NYU and UVA will run me between 60-70k a year depending on outside scholarships. UMD will be 22ish a year... I want to go into finance, hopefully run my own fund someday. love to hear your thoughts!
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Not according to Jefferies
Perhaps the best comment I've read all year
About tree-fiddy
I think debt becomes too much when it limits your options in life. For example you mention wanting to run your own fund one day. Well when that day comes, it will involve giving up some safer path (i.e. you are working at a fund or bank and you have to give up that income to launch your own). If you have a ton of debt hanging over your head, you may not be able to do that.
I don't think carrying $250k in college debt is likely to do that. Not if you apply yourself and get a good job out of school. So rather than approaching it from a debt ceiling perspective, I think you should approach it from the perspective of cost/benefit.
To me, its somewhat of a close call but I'd lean toward paying up for the better school (which is UVA unless NYU means Stern).
The way I think about it is, what's the value of starting on the right path out of college vs. not. I think its at least a few hundred grand. A few ways I get there:
An MBA can be seen primarily as a tool to get someone's career onto the track they wish they'd been on since college. A 2nd chance of sorts, a reset.. I honestly think at least 80% of MBAs are there to do that. They are happy to pay $400-500k for that privilege.
You could do the calculation of what you'd make in IB out of school vs. whatever other field you'd have to settle for. Then you need to tack on the added income in the post-IB years . . private equity pay vs the other thing, etc etc. Do that calc and you'll see it can ramp up fast. Current income is a big predictor of future income. So again, I think you get to a number that's several hundred thousand.
So if starting off your career in the right field is worth mid six figures (lets say $400k), then paying for a target is worth it if it can substantially improve your chances of getting into that field. Can it? I suspect so. No doubt there will be folks at UMD who got into IB who will tell you what a waste it is to spend $150k extra to improve your odds. But if you go to UVA and bust your tail you have a better than 90% chance of landing in IB or some other "track" role whereas at UMD I have a hard time seeing it being better than 50%. So we're talking about a 40% better chance of getting something worth 400k, and we've already covered the $150k hurdle.
Then throw in other considerations like better alumni network, the possibility of establishing VA residency or getting some other scholarships . . I think it quickly moves toward no-brainer territory.
bust your tail and 90% chance of landing in IB at UVA? That number seems way too high.
Maybe. Then again, what’s the number at Maryland?
I’ll let others fill in the blanks on odds of success. As long as the gap is substantial, I think the overall formula favors taking on 150k more debt to go to the target school.
probably 95 percent chance at UVA and 35 at maryland
NYU is Stern, UVA would hopefully be McIntire. Between the two, do you have any suggestions?
Very close call and you should go with your gut. Weighing the pros and cons doesn’t tip the scales that strongly either way. I assume UVA is going to be at least somewhat cheaper and certainly a better campus environment. I know both places well and it’s night and day in that department. On the other hand, the certainty of being in at Stern has some value vs uncertainty of McIntire. I would get some insight on how tough the McIntire admission is (admit rate worthless, look at GPA). If it’s a situation where you can mostly count on getting in assuming you are focused on your work, then I say do that. If it leaves a lot to chance, then I might put a high value on the Stern admission. Normally I say embrace uncertainty and get the job done, but college is a huge transition and you want to be insured against any slip-ups if you can.
If you're looking for the true college experience, go to either UVA or UMD. UMD is so close to Echostage, a top 3 rated EDM venue worldwide.
The area around UMD has a ton of satellite offices, so if you have a good gpa and good hustle, you should have no problems with landing internships and then after performing well in them, ask to interview/move for IB in NYC. Ex: Do some back-office internship for Morgan Stanley in Maryland, do a good job and then apply/ask for a referral to interview for IB in NYC.
Grew up going to shows at echostage - laughing my ass off at the fact that you mentioned it as a reason to go to UMD. Good man
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