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Northwestern; how much debt is it worth?

AQArgoAQArgo 55 replies4 threads Junior Member
To give everyone a bit more information; I am a current student at Indiana University, studying Finance within the Kelley School of Business. I never felt satisfied with the school, and decided on a whim to apply to some of my dream schools, the result was my admission into Vanderbilt and Northwestern as an Econ major.

After visiting both, I am absolutely in love with Northwestern. I don’t know one thing I don’t find exciting, not even the quarter system pushes me away. Out of all my choices, Northwestern would mean the world to me if I could go.

So, back to the question, how much debt is reasonable to take on for NU? I plan on going into either IBanking or Consulting. Also, this isn’t a question of how much debt a student can legally take out, my parents will support the loan, but I will need to ultimately pay it.

I would really love some help, I’ve been struggling with this question now for a few days.
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Replies to: Northwestern; how much debt is it worth?

  • cptofthehousecptofthehouse 30016 replies59 threads Senior Member
    Versus Kelley? None.
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  • PublisherPublisher 10165 replies129 threads Senior Member
    Why not share how much debt you would incur ?
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    @Publisher Because FA has not been released yet for me. As of now, I feel like 50k would be manageable. But I'm aware of my ignorance as a 18 year old, so would like to hear the opinions of those who have experienced debt or know the effects better than I do.
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  • AQArgoAQArgo 55 replies4 threads Junior Member
  • PublisherPublisher 10165 replies129 threads Senior Member
    50K per year is not reasonable. 50K for three years -about $17,000 per year--is reasonable.
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  • cptofthehousecptofthehouse 30016 replies59 threads Senior Member
    I think you need to review your finance notes.
    How much in loans are you taking now per year for Kelley?
    How much do you think you’ll have to borrow per year for NW?
    As a general rule, most undergraduates limited to $5500 for freshman year increasing to $7500 as a senior. More than that a parent often has to co-sign. There is interest on these loans too.
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    @Publisher Yes, it would be 50k over the course of the 3 years.
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    @cptofthehouse I have absolutely zero loans for Kelley, and will actually graduate with a surplus if I decide to stay. I believe I'd borrow roughly 50k over the course of 3 years at NU.
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  • PublisherPublisher 10165 replies129 threads Senior Member
    In our experience, elite schools have paid tremendous dividends.
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  • cptofthehousecptofthehouse 30016 replies59 threads Senior Member
    It can be well worth going to certain school over others. HYPMS , I would not hesitate. NW for undergrad business over Kelley is marginal in value in my opinion. Then you have that $50k loan over 20 years typically that has to be repaid vs a surplus. Is family going to be able to help much with start up in job after grad? May need a car, deposits etc.
    But then OP isn’t happy at Kelley and looking forward to NW. That can count for something too.

    Bottom line to me is that unless it’s something OP really wants (and I wonder why he’s even posting here if he isn’t doubting the worth), I would say not worth it. If family has the money to back up the loan and provide help, that would tip the balance a bit.

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  • bluebayoubluebayou 27352 replies187 threads Senior Member
    $50k is too much unless your parents will help out by paying back some of that debt.



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  • cptofthehousecptofthehouse 30016 replies59 threads Senior Member
    I’ m on edge in this one and would like to read opinions from several in Finance about value. DH works on Wall, Brother in Venture Capital, friend in IB all say not worth it. Emotional and quality of life for OP might tip it. But if family is struggling with finances, absolutely not.
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  • Mwfan1921Mwfan1921 3768 replies69 threads Senior Member
    edited May 2019
    We don't have apples to apples data. Kelley 2018 finance majors had an average salary of $65K https://trends.collegeboard.org/sites/default/files/2018-trends-in-student-aid.pdf

    We only have NU arts and sciences outcomes data in total, not by major, so don't know economics data - average 2018 salary was $57K. https://www.northwestern.edu/recruit/recruit/assets/beyon-northwestern-handout-2018.pdf

    OP might call NU career center and see if they have econ major specific outcomes data.

    With that said, $50K is a lot of debt. At 6% blended rate (student rate will be 4.5% next year, but OP won't be able to get that for all his loans....parents will have to do parent plus or cosign private loans), the monthly payment is $555 month for 10 years, or 120 months. That monthly payment requires a salary of $83K to 'comfortably' be able to pay.

    I would advise my kid that this is too much in loans (nor would I cosign), and they are likely to get a comparable job coming out of Kelley, with no debt at all. Easy decision.
    edited May 2019
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    I know I mentioned this in my previous post, but I plan on going into Consulting or IBanking, both of which have salaries above 80k+, banking sometimes with over 100K. Does this not impact the choice? Many people claim NU is head and shoulders above Kelley in terms of banking, and even moreso, consulting.
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    @cptofthehouse @Publisher Can either one of you weigh into that^
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  • Mwfan1921Mwfan1921 3768 replies69 threads Senior Member
    edited May 2019
    @AQArgo Not sure how many econ undergrads are coming out of NU making $80K+, let alone banking at $100K.

    You can ask the career center to give you more details, they are the only ones that will have that info. The grads who do land those jobs will have had similar type internships and/or other connections.

    What year are you and what is your GPA at Kelley? What internships have you had? What are you doing this summer?

    Edited to add: Don't consulting and investment banking firms recruit at Kelley?
    edited May 2019
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  • cptofthehousecptofthehouse 30016 replies59 threads Senior Member
    edited May 2019
    What will be your degree from NW? I don’t think so, but I’ll ask.

    Yes, banking I know recruits at Kelley. I don’t think NW has an undergrad business program or major much less a finance concentration. Just plain ol’ Econ major like from any liberal arts school. I don’t know anyone on Wall and midtown talking about recruiting from NW. But I’m not in the thick of that. My brother and DH are

    Full disclosure here regarding my personal feelings on this: I’d have preferred NW and an Econ program. I do not like Undergrad business programs. I’m big on LACs. But, given the goals and start of OP, in addition to extra cost, I’d stick with Kelley. If OP is taking another tack going more liberal arts and not focused on going directly intonIB and finance setting, different story. But family situation is an issue too

    I know too many kids, very smart kids, who gambled they’d make it big in Manhattan after borrowing a lot to go to an expensive college. Often parents co signed the loans. Yes, most are making the big bucks. But it costs a lot to live in that setting. That loan payment is a killer. Especially when parents can’t help. And some of these parents are needing help now too. My oldest is in mid 30s so A lot of his peers have parents who have retired, are disabled , Ill lost jobs etc. Those loans are really problems. They grow astronomically especially when you don’t start paying on them right away.

    edited May 2019
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  • bluebayoubluebayou 27352 replies187 threads Senior Member
    just out of curiosity, did you not apply to Ross?
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    @Mwfan1921 I understand it sounds odd. If you look in-depth at consulting salaries at MBB (McKinsey, Bain, BCG) you'll see 80k is very much regular. Northwestern is one of the best schools in terms of MBB recruiting. Additionally, while I don't know NU's banking reputation, if you look into banking you will also see an average of around 85K base salary, not including sign-on bonuses, end of the year bonuses. Kelley has a banking workshop, and so I've heard these numbers directly from the director which sends kids to Goldman, J.P Morgan, etc. It's not that Kelley doesn't send kids, they do, but the number of kids is much lower when you compare IU to NU.

    As for me, I will now be a sophomore next year, I have a 4.0 GPA, and am currently working as a Finance Analysis Assistant at an electric/energy company in Wisconsin.
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  • AQArgoAQArgo 55 replies4 threads Junior Member
    @cptofthehouse My degree would be Economics, with another major or minor mixed in. Possibly STEM related. Northwestern's economics major fairs the students extremely well. I guess I just need to know if, lets say, an 85K salary, with obvious promotions, would be able to afford the debt.
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