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Recommended loan limits

13

Replies to: Recommended loan limits

  • Mom2aphysicsgeekMom2aphysicsgeek Registered User Posts: 4,500 Senior Member
    edited July 2014
    @ClassicRockerDad‌
    I am trying to understand how taking out loans to attend a top school actually maximizes potential over a career in engineering if one works in industry. Once you are employed as an engineer, what corps or industries care where you got your degree from? My ds and dh (both chemEs) have worked side by side with engineers from top engineering schools around the country and there is zero difference in pay or promotion based on where their degrees were earned. It is strictly performance based.

    Could you give concrete examples of employers who wouldn't hire a grad from a lower ABET school but only MIT? Or a corp that would pay a new grad BS from MIT a different salary than a student from say NCSU?
  • sevmomsevmom Registered User Posts: 8,333 Senior Member
    My kids are both engineers and went to 2 different instate schools. Both did get signing bonuses. They work and have worked alongside kids from lots of different schools (including kids from Cornell, Yale, MIT,etc). I don't sense that the kids from more elite schools got more money but maybe I'm wrong on that (but hope I'm not). The key in engineering seems to be ABET accreditation and good recruiting at the school. Both had high GPA's and that seemed to help in getting good jobs. Both had less than $20,000 in loans before interest . Even with engineering , I don't think I would have wanted them to come out of school having to repay much more than that. They did not pay anything upfront for their educations so they had money saved already from summer jobs, internships, signing bonuses to help put a big dent in the amount of loans they did have to repay.
  • Irishmomof2Irishmomof2 Registered User Posts: 963 Member
    I am clearly in the wrong career, since I'm making less than the interns at @furrydog's company, and I don't know anyone who gets a signing bonus who isn't a professional athlete. If you can get by with less debt, I recommend it.
  • scout59scout59 Registered User Posts: 3,531 Senior Member
    Just want to emphasize that borrowing "too much" money (and who's to say what "too much" really is?) may limit options after graduation. How many thousands of kids go into college as engineering or finance majors and come out as something else altogether - as teachers, or scientists, or linguists? Suddenly, all those calculations based on average starting salaries of engineers and signing bonuses for financial analysts mean nothing. Hefty loan payments can definitely impact the choice of a career post-graduation, and it's nice to have choices that don't depend upon starting salary.

    Remember, OP implied that her son was interested in the high earning potential associated with STEM and finance careers (correct me if I'm wrong, but I didn't read anything about loving science or economics, just that they could lead to high-paying jobs.)
    he's only 17 but he has, for better or worse, been pretty consistently focused on working towards a high paying career path (all coming from him, believe me…)
  • VladenschlutteVladenschlutte Registered User Posts: 4,329 Senior Member
    edited July 2014
    I don't know where the idea of signing bonuses as being extremely uncommon comes from with some of these posters. I know a lot of people who graduated in the past couple years and almost all of them got some signing bonus. Though the size can vary quite widely.

    An amount like 80K seems like it's more than necessary. What state do you live in? What can he/you contribute on the spot? My personal view is that every school has a ceiling on the potential for the first job out of school, and for the most part the ceiling is higher than the potential for 99% of students. I think very few are held back by their school, and between two schools where these ceilings are both above his potential, he's probably no better off at one over the other. Unless your son is a literal genius or you live in a state with no decent STEM school, going to a top public OOS or a private is probably just not worth the cost.

  • austinmshauriaustinmshauri Registered User Posts: 8,631 Senior Member
    If you strive to be average, by all means avoid all debt.

    That's your advice to young people? Take on debt or run the risk of being thought of as "average"? Nice. How do you recommend they pay off those loans if the market is saturated when they graduate and there are not only no signing bonuses, there are not many high paying jobs available? If students require a signing bonus and hefty salary to repay loans and the source of both is dependent on market fluctuations they have no way of predicting, that's a blind gamble, not a calculated risk.

    Debt is a tool and, used wisely, can help people. However, for young people to take on debt that they can only afford if they get a high paying job with a hefty signing bonus is taking a larger gamble with their futures than is probably prudent.
  • ClassicRockerDadClassicRockerDad Registered User Posts: 6,365 Senior Member
    Could you give concrete examples of employers who wouldn't hire a grad from a lower ABET school but only MIT?

    Not only MIT, there are a number of top schools. NCSU is actually pretty good.

    Microsoft when they were a startup
    Apple when they were a startup
    Google when they were a startup
    Akamai when they were as startup.
    VMWare when they were a startup

    All of these companies recruited at MIT and Stanford WHILE THEY WERE STARTUPs. I don't think I could have gotten into the startups that I've worked for coming out of an ordinary school.

    I recruit at the MIT Career Fair every year and there are startups galore recruiting. They don't have the resources to go to a place like NCSU. They want MIT grads or Stanford grads. Both schools are full of startups started by professors and alums. Many of my frat brothers have done exceptionally well, orders of magnitude greater than one could drawing an average engineer salary.

    There is a certain fearless can-do culture at these places. People learn to think big.

    You can make a lot of money at a startup and even if you don't, you could get 5 years of experience in 2 years by working for one. Eventually you learn how to pick a good one.
  • VladenschlutteVladenschlutte Registered User Posts: 4,329 Senior Member
    That's your advice to young people? Take on debt or run the risk of being thought of as "average"?

    You can do better than try to imply he said the converse of what he actually said, come on now.
  • ClassicRockerDadClassicRockerDad Registered User Posts: 6,365 Senior Member
    edited July 2014
    That's your advice to young people? Take on debt or run the risk of being thought of as "average"?

    That's not what I said nor what I meant.

    I meant that if you would be happy with average job, average wages, etc, then there is no reason to take on the debt. If you have much greater ambition and are willing to take risk in exchange for potentially far greater reward, then it might make sense to borrow money.

    I'm not talking about saddling people with unbearable debt, but avoiding risk or debt at all costs is too conservative for the most ambitious among us.
  • Mom2aphysicsgeekMom2aphysicsgeek Registered User Posts: 4,500 Senior Member
    @classicrockerdad
    Could you give concrete examples of employers who wouldn't hire a grad from a lower ABET school but only MIT?


    Microsoft when they were a startup
    Apple when they were a startup
    Google when they were a startup
    Akamai when they were as startup.
    VMWare when they were a startup

    Thanks. That is what I thought. You are addressing a very small segment of engineering and those with kids with specific goals.

    Not every student wants to work in the computer industry on the west coast for a tech start-up.

    A kid that wants to work in the chemical industry making a starting salary between $65-80,000 living in rural America does not need to take the approach you are advocating. They simply need to attend an ABET school respected in industry that recruits, coop, and make good grades. A very realistic option for lots of kids.
  • busypersonbusyperson Registered User Posts: 158 Junior Member
    edited July 2014
    IMHO, I personally would not consider significant debt, unless for MIT or Stanford. Some debt, yes. Needs to be quantified with how much risk is one comfortable.

    CRD and Vladenschlutte sound like they work in industries that are on the cutting edge in technology, ones that have consumer/market high demand. I'm not sure it is typical for all engineering graduates to be hired by similar industries. This is to both CRD's and M2aPG's points. The graduates from the top 5 engineering schools get snapped up by these companies, as well as start-ups. But that is not the typical experience for graduates from all ABET schools.

    For the engineer going to a typical state or private engineering school, i.e., not the top 5 Engineering schools, the engineering outlook, while often is strong, may fluctuate with market stresses. Top GPA engineers from great ABET schools, but not as fancy a name recognition, may not garner top wages or signing bonuses if that particular industry tanks, and there is no way to predict this.

    At the risk of dating myself, but when my friends, brother, husband and I all graduated with top GPAs in EE, the economy had taken a down-turn, and new EEs and MEs were competing with seasoned ones that had been laid off. Some of us were employed right away by local technology firms that regularly recruited from our school, but many others of my peers went on to graduate school or crossed disciplines to attend law school, due to lack of jobs. No one could foretell this four years prior when we entered school. Btw, CRD, we did not go to top engineering schools, just the local one.

    As an interesting aside, those of my friends that went to law school are are significantly more prosperous than those of us that stayed in engineering.

    Hence, from personal experience, a super economy for a particular kind of technology when entering college doesn't guarantee a super economy for that engineering discipline when graduating.

    I agree with both CRD AND Mom2aphysicsgeek. If one is attending the top 5, maybe consider taking more debt as the outlook will be different. Hence, to CRDad's assessment that more of a payoff in higher ROI cutting edge technology jobs may be worth the risk (investment) of more debt. To Mom2aPG's point, I still think a great ABET school, without the name recognition, provides a super education that will serve the engineer all his/her life. This is my personal experience. The engineering education doesn't have to cost an especially large amount of money. I also think many incoming engineering freshman choose engineering schools that are local and known to them. Not everyone aspires to MIT and Stanford, nor to be an entrepreneur inventor engineer in a start-up.

    However, I personally would limit debt because of the unknown future market. I lived through those days with those in my family and friends who had 3.9-3.95 GPA in EE, but the market just wasn't sustaining jobs. It was a tough few years and we only had stafford loans, because we worked while in school and tuition was much cheaper. I can't imagine having a lot of debt today and graduating in a down-turned market.

    It took me a few minutes to type this so this is cross posted with CRDad and Mom2aPG's last posts.
  • MichiganGeorgiaMichiganGeorgia Registered User Posts: 4,472 Senior Member
    " Could you give concrete examples of employers who wouldn't hire a grad from a lower ABET school but only MIT? Or a corp that would pay a new grad BS from MIT a different salary than a student from say NCSU?"

    @mom2aphysicsgeek - Not MIT but DH works for a fortune 100 company that depending on the job basically only hires new BS grads for business jobs from Duke,Harvard and a couple other Universities. Engineers and MBA's may come from Georgia Tech or other well know U's . So depending on where you go to school affects your chances of getting a job right out of college at that company.

    It doesn't matter of where my kids go to school I wouldn't want them to take out more that the Stafford loan limits. At the end of the day there are no guarantees regardless of what their major is.

    As far as sign on bonuses. I think they come and go depending on the economy. I wouldn't count on them.
  • sevmomsevmom Registered User Posts: 8,333 Senior Member
    MichiganGeorgia, Your husband's company may not like kids from other than the most elite schools but there will be plenty of other companies out there eager to snatch up good kids from these schools. This is from 4 years ago but the WSJ asked recruiters to rank schools. A lot of them like big schools because they gave the recruiters more bang for their buck and liked the focus on teaching more practical skills.

    The general rankings:
    1.PSU 2.Texas A & M 3. Illinois 4.Purdue 5.ASU 6. Michigan 7. Georgia Tech 8. Maryland 9. Florida 10. CMU 11.Brigham Young 12.OSU 13. VT 14.Cornell 15.Cal 16. Wisconsin 17. UCLA 18. Texas Tech 19 (tie) NCSU 19 (tie) UVa 21.Rutgers 22. Notre Dame 23. MIT 24. USC 25(tie) WSU 25(tie) UNC

    For business:: 1.Michigan 2.OSU 3. Rutgers 4. Harvard 5. Penn 6. Cal 7. CMU 8. Northwestern 9. UVa 10.Illinois

    For engineering:1. Georgia Tech 2. Purdue 3. Maryland 4. Illinois 5. Virginia Tech 6. Michigan 7. Cornell 8. MIT 9.PSU 10. Minnesota

    For CS: 1.CMU 2. Cal 3. Michigan 4.Georgia Tech 5. Virginia Tech 6. MIT 7. PSU 8.Purdue 9. Illinois 10.Maryland

    Of course, there are firms that will only recruit from certain elite schools, like in some of the finance and consulting areas, but luckily they are in the minority.

  • VladenschlutteVladenschlutte Registered User Posts: 4,329 Senior Member
    Could you give concrete examples of employers who wouldn't hire a grad from a lower ABET school but only MIT? Or a corp that would pay a new grad BS from MIT a different salary than a student from say NCSU?

    The company I'm at does hire from lower-ranked schools, but there's definitely a focus on higher ranked schools. If you look at the schools that most people went to from here, they're mostly the most prestigious few from the Midwest. But yes, they don't want to miss out on a genius just because they went to some no-name school, so they will of 'course hire someone from there. The big difference though, is that they won't actively recruit there.
  • sevmomsevmom Registered User Posts: 8,333 Senior Member
    Vladenschlutte, Just curious then- if your company does decide "they don't want to miss out on a genius just because they went to some no-name school," do they pay them the same as the person from a more prestigious school, provided the school is ABET accredited?
This discussion has been closed.