Is Duke worth the debt?

I am a rising junior at Duke doing a double major in engineering and I have a 3.7 and a decent engineering/finance resume from what I can gauge relative to my peers. The problem is that my financial situation has changed at home and the school is unwilling to work with us. So now, my parents can't foot the bill for the last 2 years so I'd be looking at about 180k+ in loans by the time I graduate. This is firm, Duke will do absolutely nothing to help us. I was accepted to UT Austin and UF. I can attend loan-free pretty much and continue both of my engineering programs on time at either. I just don't see the value in taking these loans. I can't say that the education I'm receiving or opportunities opened up appear that much different from what my cream of the crop buddies at UT have. So, am I making a big mistake if I leave? I am not 100% sure what I want to do, I took a banking internship because that's all I got for the summer, but I'd be much more interested in quant roles or PE long term. Also wouldn't mind working in an engineering industry for a while, then getting an MBA and entering consulting at that level and taking it from there.

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Comments (23)

May 20, 2021 - 8:41am

This is a weird situation. SO you'll transfer in as a junior to UT or UF?

Just my $0.02 but I don't think Duke is worth $180k more than UT-Austin. Yes, Duke is a better school, for sure, but not $180k better. Austin is just a flat-out better place to live than Durham too although UT is a way bigger school so will be a totally different environment but I'm sure you know this. 

My guess is you could still drop the Duke name in interviews/networking if needed, just mention briefly financial hardship. And as you said in 3-4 years after graduating you can go to HSW for your MBA and have a prestigious name on the resume if that's important for you. 

  • Intern in HF - Other
May 20, 2021 - 9:37am

Do not go to UF. This is a Duke or UT Austin decision IMO. While, UF will place some kids on the street you're trading the strongest brand name coming out of the South for a much weaker one so that's a nonstarter IMO. 

You say you don't really know what you want to do and list out a bunch of possible career paths (Quant, PE, Industry, Consulting). What interests you about those fields? What do you want to get out of your career broadly? 

You should also consider where you want to work post grad when making this decision. Do you know? If it's NYC Duke has a major advantage to UT Austin as every Duke kid that wants NYC will more or less get it which won't be the case at UT Austin. 

If you want PE out of UG I think that Duke would be your best bet. Kids go to MF's out of UG there and while Vista is in Austin (I'm guessing they do OCR at UT) going to UT won't be a major advantage over Duke as Duke's buyside network is incredible (I've used it and it's worked wonders). I'd also argue that unless you want energy PE recruiting would go much better if you went to Duke 4-5 years down the line (kids are going to Ares, Octagon, Blackstone, Apollo, Carlysle, Bain Credit, etc. out of Duke UG which I don't think will be the case out of UT UG). 

Something else to factor into your decision is whether or not you want to work in energy as that's where McCombs has the strongest connections. They'll have alumni outside of energy, however going to a school in Texas not wanting to work in energy seems risky IMO. You'll basically have to recruit Dallas which has some great opportunities as I'm not aware of any FO finance opportunities for those coming out of UG in Austin outside of DFA and Vista (DFA is also in Charlotte) so feel free to correct me if I'm wrong there. 

Something else that should factor into your decision. Will you be in the honors program or exclusive finance program at UT? If yes then I'd consider UT but if no I'd stay at Duke. Your floor coming out of UG at Duke and generally in life will be much higher than if you strike out at UT. You mentioned striking out and landing an IB offer coming out of Duke, which is not a terrible consolation prize. Kids at UT and dozens of other schools would likely kill for your role and you view that as failing. Kids that failed at UT or any other solid state school will have much harsher outcomes from recruiting if they fail (BO jobs/Corp Fin/Sales/Etc.).

UT is a solid school as others have said and I've heard great things about Austin as a town. I just don't think you should transfer there unless you're committed to staying in Texas or are in there top honors finance program. 

May 20, 2021 - 1:30pm

Thanks a ton, this was very insightful. I really don't think that NYC or the banking lifestyle up there is for me. I'd probably prefer to work in the southeastern us after ugrad as I just like it better and can save tremendously on cost of living. I'd probably be targeting industry jobs in petroleum engineering or software if I failed at recruiting. I'll have an engineering degree, so is my floor really that low if I'm willing to use it? I want to work with startups as a career, hopefully entering VC or starting my own tech company down the line. As of now, id prefer a quant job if I stay in finance because I can utilize my technical skills most. Have heard similar things about PE and HF though, so that's why I threw them on there too.

  • Intern in HF - Other
May 20, 2021 - 11:13pm

I think it's good that you already know that the banking lifestyle and NYC is not for you as many kids don't figure that out until much later (myself included). 

Knowing that you want to stay in the Southeast (I'm assuming you mean east of Texas and below Missouri, Kentucky and Virginia feel free to correct me if I'm wrong) I would think that you should stick it out at Duke. If you want to stay in that general area post graduation then I don't think it makes sense to move to Texas only to go back that way after (UT brand gets diluted the further you get away from Texas). 

Duke is the best school in the South, with an incredibly strong alumni network, and the brand will likely help in getting promotions assuming you're a top performer once you graduate. You'll come to learn companies are risk averse and nobody ever got fired for hiring someone from Duke and nobody will bat an eye when they say they're going to hire a kid from Duke (the opposite is not true).

Regarding your career, I think you need to choose a path and stick with it for 6 months to a year (being in VC and entrepreneurship has nothing to do with any of those other careers). You're going to fail if you try to recruit for Quant positions and VC positions (they happen at the same time). I'm not sure when petroleum engineering or SWE recruiting occurs but if its at the same time or there's any overlap you're going to spread yourself too thin and not be as successful as you otherwise could have been. 

Based on you wanting to be a Quant if you stay in Finance it seems like you're more interested in working as an engineer than a deal guy, which IMO means you wouldn't be a good fit for VC. VC is similar to IB in that you have to be very social in addition to having strong technical skills. You should also know that most Quants that I've come across don't make any investment decisions. They're building the models and really don't have any input into the investment process from what I've seen. This won't be true for 100% of the shops but I think that it's representative of what occurs at most shops than not. Not sure if that matters to you or not.

Regarding entrepreneurship look at the Melissa and Doug founders program. Also look at Duke I&E and some of the other entrepreneurial resources they have on campus. They have a student founders program that connects you with Duke entrepreneurs that will walk you through how to build a venture and mentor you. If you have any free time I'd suggest looking into that and testing out your hypothetical venture. Once you get into the working world you'll find that working on a venture outside of work will be a pain in the *** (I know because I've done it) so if you can make any meaningful progress while in school by all means do it. 

Lastly, regarding your floor in terms of comp. 

If you stay in Finance your floor will be higher at Duke than at UT, primarily because buyside recruiting will be so much easier (they only care about prestige). 

If you go into petroleum engineering or a career as a SWE I'm not sure how much going to UT would impact your floor. Given that they're less focus on prestige I want to say that it wouldn't that much, however I don't have the answer for that. What I have heard with being a SWE though is that kids at the top schools (think top 10 schools) get higher starting comp packages than kids coming from lower ranked or state schools (not sure if Duke would be in that category since it's #12). I would verify this though because I heard this secondhand and therefore I wouldn't take it as a fact without doing further research. 

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  • Intern in HF - EquityHedge
May 20, 2021 - 9:49am

If you are interested in quant roles, I would just stay at Duke.  Currently, competitive quant roles pay 200k+ out of undergrad.  Given low interest rates, I think your loans will be manageable.  You can also use your internship money to pay back some of the principal early.  Also, because you aren't sure what you want to do, staying at Duke will open more options for you.  If you like Duke stay, if not leave.  

May 20, 2021 - 10:31am

For starters, I think 180k is probably an overestimate by 20k, maybe more. The school estimates its only 78k total. I'd imagine you could get some type of student job, become an RA or something for free housing/food to help. There are certainly ways to be creative to get those costs down. Plus get a solid summer internship and maybe put some of that money to your debt. Basically, I think you're looking at it from the absolute worst case scenario vs trying to pinch pennies to make it work. 

Now that said, even it it was 150k, that's some serious coin. You're probably going to be paying another 30-60k in interest, maybe more, when its all said an done too. While Duke, and its network, are likely far superior than UT, and the median comp is probably a lot higher - not only right away but 5/10 years out - its not a guarantee you'll be in that bucket. So to an extent its a crap shoot, with the odds slightly tilted to Duke. If you look at banking jobs, and buyside thereafter, the amount of Duke kids vs UT is just materially larger, probably exponentially at the buyside level. As stupid as it sounds, having Duke vs UT when applying to grad school probably helps more, and also at jobs post grad school (contrary to what people might think its not a blank slate for post-mba recruiting, UG matters). 

So despite the real benefits of Duke over UT, its still insanely expensive. Very tough personal decision here and I don't think there is a wrong answer. If you do go the Duke route, I'd try to find everyway to cut costs and save money. Once you start working, I'd live super cheap for a couples years just to get that debt paid down asap - you don't want that burden for a long time. If you go to UT, being debt free is amazing and you'll have a lot more flexibility in choosing a career without the burden of a heavy debt load.  

One question though - why are those both loan free? Do you have a full ride + room and board comped? Seems odd those are 100% free and Duke is 180k...something seems off there. 

May 20, 2021 - 1:36pm

That is correct, I did definitely overestimate it seems. I'm I state at UT and can still get the tuition waived apparently and then my parents can help with some living expenses and I can cash flow the rest. Similar deal at UF because I have a prepaid plan as I used to be a FL resident. I'd honestly want to exit into VC or tech management/entrepreneurship long term instead of finishing a career in finance. From an exit opportunity perspective, where would I be best off starting and could I still get that from UT, because I really don't want to take on the loans unless it is near necessary/

May 20, 2021 - 2:55pm

Gotcha, that makes sense. 

Really if you're a hustler and smart and hungry things shouldn't matter as you will make your own path. UT (I think is a big step up from UF) will be fine and tech is growing in Austin. Duke provides a more de-risked path, easier but not easy. But of course from UT with the right motivation and talent you can get to the same place and save 150k in the process (plus the interest). Maybe you already tried this, but I'd really just beg/try to get them to work with you with threatening a transfer. They might be more inclined if they knew you were leaving - but you might have already done this. School and brand are no doubt important...but that's largely for the average person to set a relatively easy floor...but if you've got what it takes to be successful its gonna happen from almost anywhere. 

  • Intern in RE - Other
May 20, 2021 - 1:38pm

OP,

I've been in a similar situation. Had to decide between a top 5 & another school that was regionally well known, but obviously not as much as the top 5. Also had to deal with a similar money situation as you.

I hate the idea of prestige as much as the next guy, especially with how much it pervades Finance, but its a reality that it plays a big role. Beyond that, people are stupid and assign you an intellectual, hard-working, etc status for what school you went to more broadly in life, on first glance. I don't know southern school prestige, but I assume Duke to UT places Duke as one step above. Ex/ Stanford is one step above NYU, as there is the best of the best, and then there is a very respected next best. Drop another tier below NYU and you might get UNC Chapel, a very respected regional school, but by no means NYU. 

I'm not going to lay out a 1-10 list, because that details is BS. There are general tiers though, and people use it in sizing you up imo. 

Now, w/ that intro out of way... Don't put yourself in a false choice situation. You mention financial situation changing? Can you please provide more details? Even so, really, and I mean really try to work with the school. Other's mentioned; RA, work-study, scholarships, internship money etc. Yes, this is a pain in the ass, and you certainly wont have the social life you would at UT, not having to spend so much time scrounging up money over there, but it's your choice, as always.

Are you considered an out of state now for some reason? There are ways to work around that. Did your expected financial family's contribution change? There are ways to work around that.

Don't let life so easily throw you around! Make your own paths if you really want to! If life really seems to want you at UT, then sure go, but I'm just saying to not roll over so easily. 

Also, beyond going to a forum for such life advice, decide yourself. Take time to your self, weigh the social life, financial, career, and geographical pros/cons of each school. Check your gut's decision. Ask your closest friends who know you to walk your decision through w/ you. Then, just act. 

Good luck my man.

May 20, 2021 - 3:21pm

definitely goto UT....i've worked with lots of Duke grads, and a handful of UT grads....and i prefer the Texans.

just google it...you're welcome
  • Incoming Analyst in IB-M&A
May 20, 2021 - 11:25pm

Follow your gut instinct, which seems like it's telling you UT Austin. You'll still find your way. Everybody has an opinion but at the end of the day, only you have to live with yourself.

  • Intern in IB - Gen
May 21, 2021 - 12:25am

This is such a strange situation. Not sure if people are reading the whole post to notice he isn't a college freshman making a decision. You've already attended Duke for 2 years and now suddenly they are going to drastically raise the bill like that? At Ivies and very top privates like Duke this is almost unheard even if the financial situation changes drastically. Did you all win the lottery or come by a huge amount of money suddenly that makes them so firm in paying full cost out of pocket? There should be more to the story here, and a school like Duke should work with you. Some debt is fine but the figure you cited just seems way off.

  • Intern in PE - Other
May 21, 2021 - 12:50am

I go to UT. I'm also interested in finance, tech, and entrepreneurship. The entrepreneurship scene at UT is pretty robust, but likely on par with a lot of other top schools.

Going the entrepreneurial route is very possible at UT. There's resources, programs, and funding available. I see you said that you ware interested in trying to enter quant and buy-side, and I understand not wanted to turn down those high-paying, high-prestige career paths. I chose UT because I received a near full-ride and I wasn't certain whether I wanted a traditional career in finance or something more robust like VC or tech, so I didn't want to pay the price tag for private schools out of pocket. I don't think it's easy to go to NY, or to enter non-traditional career paths like buy side or quant roles out of undergrad, but it's a recognized school with a decent alumni network. I got a paid VC analyst position the summer after my freshman year, so it's certainly possible. I am not sure about full-time recruiting though. Also, being an engineering student seems like it would make it significantly tougher, since a lot of recruiting happens with McCombs students. I expect you would have to attempt to differentiate yourself and network a lot as an engineering student.

You already experienced Duke for two years, so you're aware of what it offers. At 20 years old, you aren't gonna know everything or make the perfect decision. It's really gonna come down to what you feel is right.

May 21, 2021 - 9:53am

PM Me. Duke Pratt 2021 Graduate going into Finance. BME/ECE major. Similar situation. 

I pushed through and think it's worth it. My debt number (~80k) was much smaller than yours though, and I bit the bullet in my first year and have completely paid it off. I loved Duke more than any other college I visited. Found a solid job in long only investment management (LO) that will allow me to have a successful start. No way I would have gotten the job if I was at UF or UT Austin. Had two summers in IB before starting in LO, and definitely would not have had those internships coming from UF, and much less likely from UT Austin as well. 

Thinking in terms of the cumulative value of having a Duke degree in my career vs. any other school, for me the choice was clear. The debt was something I could reasonably pay off with summer internships and some savvy investing. I was very lucky with the recent stock increases during COVID and paid all my debt off before starting work. Your debt seems like it might be hard for you pay off before you start and may potentially be a burden for several years after graduation. 

Ultimately, the choice is up to you. Debt is a scary thing, and if you can't start off on the right footing out of college or in subsequent years, the burden can feel impossible to overcome. I think it is ultimately worth staying for placement and the network, and I chose to stay in similar circumstances. 

Feel free to talk to me more about your situation. I'm all ears. I feel awful that this is something you are having to consider and hope that both you and your family are doing ok!

May 21, 2021 - 10:13am
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