Investment Strategies 101: Choose Your Degree Wisely

I want to take a moment to more fully flesh out my Pre-Signing Considerations post.

Who typically makes the decision on where to go to school and what program to study? A 17-year-old. That’s the standard the age at which teenagers start applying to schools.

To all the 17-year-olds who read this blog…wait, are there any? If a tree falls in the forest…

17-year-olds need to start reading this blog ’cause it’s about to get real. Anyway, I digress.

How many 17-year-olds know anything about personal finance? How many of them have invested their money, even if it’s just $100? How many have more than three digits in their savings account? How many of them even have a savings account? How many of them know the definition of simple financial terms like:

  • Savings
  • Budgeting
  • Debt
  • Asset
  • Liability
  • Compounding interest
  • Mutual fund
  • Certificate of deposit
  • Return on investment
  • Portfolio diversification, alpha, beta, covered/naked put and call option, annuities–okay, okay, I’m getting ahead of myself…

Parents, if you’re not talking to your kids about these terms before they become teens, you’re doing them an incredible disservice. When I was five years old, my parents gave me a long list of weekly chores and a $5 weekly allowance for completing them.  They forced me to save my money so I could buy my things on my own–besides my bicycle, they didn’t buy me any toys if it wasn’t my birthday or Christmas. I got a savings account when I was seven; they told me to invest in CDs when I was 12 so I could experience a positive ROI; I got a checking account when I went off to college; I wasn’t allowed to have a credit card until I graduated from college and got a job.

How can we expect the 17-year-olds of this nation to make a smart choice on student loans if they don’t even know the basics of money management?

I’ve read some of the 5,400+ comments on the NMHD Yahoo! article, and a lot of the snarky ones say something to the effect of, “Oh, sure, if I got an MBA  from Harvard, I could pay my student loans off in seven months!” Or, “If I made six figures, I’d easily pay off my loans!”

Exactly. You’re right. You got me there, buddy–I really can’t argue with that! A Harvard MBA will connect the grad with jobs that will enable them to pay off their debts very quickly if they maintain a low cost of living.

I got my MBA at Harvard and I took out $100k in student loans because I saw–before taking out loans and making the investment–that the median salary for  grads was in the neighborhood of $120k. It doesn’t take a financial guru to see that the ROI is incredible. However, it does require at least understanding the expected return and the investment required to calculate a return on investment. And that understanding begins at a very young age, like five.

When a 17-year-old from a middle-class family decides to takes out loans to finance his entire social work degree at Columbia University, the most expensive private college in the US at $45k/year (before room and board in super-expensive New York City!), I have to wonder what the heck  is going on inside his head and what his parents taught him about personal finance. Am I knocking social workers? No. Am I knocking Columbia? No. Am I knocking student loans? No. I’m knocking the combined trio.

There’s nothing wrong with studying social work, and in fact, I’d argue it’s one of the more noble professions out there. I’d just implore students to not pay $200k to study it. Why not? Because the average salary for social workers is $41k. So after-tax, you’re looking at, what, $30k/year in take-home pay? And if you need an apartment for $500/mo or $6k/year, you’re down to $24k/year. So that’s $2k/month for all of their other expenses, which will include student loans. If my $100k of student loans required a monthly payment of $1,057, and this person took out almost $200k just for tuition, then we can safely assume they’re going to be paying about $2k/month on their student loans for 10-15 years.

Wait, isn’t $2k/month that what they had left over for food and clothing and transportation after paying for their $500 apartment? And by the way, where exactly does one find a $500 apartment?

And I’m not knocking Columbia, either. I’m sure there are a lot of great programs at that school that can put students on the fast track to earning a solid salary that will enable them to pay down their student loans quickly–as long as they maintain a low cost of living. It’s just that social work isn’t one of them.

And I’m not knocking student loans. For students who are strapped for cash and already working a job just to survive, student loans put an otherwise unattainable education within reach.

While this post was targeted mostly at teens, college grads who are eyeing a grad program aren’t going to get off so easy, either. Do any 22-year-olds read this blog? If a tree falls in the forest…

But check it out. Here are five graduate degrees that aren’t worth the paper they’re printed on:

  1. Master of Fine Arts
  2. Computer Engineering
  3. PR, Advertising, and Mass-Media programs
  4. A Law degree from a fourth-tier school
  5. Atmospheric Sciences and Meteorology

The same premise applies to both high schoolers and pre-graduate students: consider the ROI.


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66 responses to “Investment Strategies 101: Choose Your Degree Wisely

  1. Eric

    Going to Harvard does not make you a better business person either. If had lost my drivers license for three months, like you did, I would have bought a $100 bike from Walmart not a $1200.00 carbon fiber bike to commute on. Then again if had that many points on my license I would have been more careful to not lose my license at all.

  2. Laurie

    I was surprised to see Computer Engineering in that list, but I didn’t notice initially that the list referred to graduate degrees. Still surprised though – I’d figure any engineering degree is bound to be of a degree of difficulty that impresses employers enough to let you switch fields (like all those mechanical engineering graduates that get jobs in finance).

    PS. This is a great post, and I hope more people understand the ROI philosophy when picking majors and universities. I disagree with this latest trend where people are being advised not to go to college at all because of the threat of student loans. I say, go, but pick one that you can afford and that will get you a decent ROI on your investment.

    • I was surprised, too. Here’s what the article says: “The client base doesn’t place a high priority on graduate education. “The vast majority of jobs in IT are hands-on, where employees are utilizing a specific technology or skill set,” he says. “Candidates grow their expertise by growing their skill sets and interpersonal skills,” he says, rather than pursuing further academic qualifications.”

      If that’s the case, then I guess that makes sense. The field is probably changing so quickly that it’s tough for schools to keep up, and people are better served learning on the job and keepig up rather than going to school.

      • Chris

        Computer engineering is not the same as I.T. which is not the same as Software development. That said, there is a good point here. I don’t think anyone, in any field, goes to graduate school for the salary and especially not engineering due to the opportunity costs.

      • sakky

        While I largely agree that a graduate computer program may not be financially worthwhile, I would offer two nuances.

        First off, a PhD computer program is clearly a substantially financial prospect than a terminal master’s program in computer engineering for the simple fact that PhD programs are (almost always) funded whereas the latter is not. Even if you never successfully complete the PhD, you can usually still garner a consolation master’s degree for which you not only did not pay to obtain, you actually got paid (through your PhD funding) to obtain.

        Secondly, a PhD computer program can provide perhaps the most cost-effective opportunity to investigate a potential tech startup idea. Rather than launching your tech startup by means of the ‘couple of guys in a garage’ trope reminiscent of Silicon Valley folklore, why not launch it via ‘a couple of guys in a university computer lab’? Most startup founders not only take no salary but also burn through their savings to launch an idea that ultimately proves to be a commercial failure. But if you’re in a computer PhD program, not only will you be paid your PhD stipend regardless of whether your idea proves to be a commercial failure, but you’ll likely still be awarded at least a master’s degree, and possibly even the PhD. {An innovation that represents a theoretical advance might well be sufficient to satisfy a PhD thesis committee even if it is a commercial failure.} That’s not a bad consolation prize. On the other hand, if your idea is a commercial success, then you can always quit school to pursue it full-time.

        That’s basically what Google’s Brin and Page did, along with Yahoo’s Yang and Filo, and that obviously worked out very well for them. {And indeed, all of them were awarded master’s degrees, not that those guys needed those degrees. So they both completed their degrees and became billionaires through their graduate computer programs.}

  3. MJ

    Hello, I am a 18 year old who reads your blog avidly.
    I took a discharge for the Army because I joined for all the wrong reasons, to pay for college, and I absolutely hated everyday I was there, so it was not fair for me to take up space where someone else really should be. I was also following what my family wanted.
    I tried doing community college for 1 year (I graduated highschool early) and my GPA was dropping due to family stuff that was only getting worse here. I needed a home and a real shot at a future.
    I jumped on the SIU bandwagon for pre-nursing. I pulled out a little under 5K from my 10K mutual funds to pay for semester one. I get a job on campus this year working about 20 hours a week for minimum wage, and I am a note taker during my classes for $10 an hour. I hope to put 1/2 to 1/3 of that money towards paying off 2nd semester, and I am looking for scholarships and applying left and right. I am really trying. I am even doing ROTC to see how I like the air force and maybe do this military thing the way I wanted to in the first place. I am super nervous but FAFSA and Pell Grants are helping me.
    Is it a bad choice I am going to a 4 year instead of a 2 year?
    I though I budgeted my money well but I am not sure. I am a first generation college student (let alone high school graduate) I am seriously gudining myself.

    • Ah! So, I guess somebody heard the tree fall. Awesome!!

      I don’t know how expensive your school is, but if you took out only $5k for 1 semester and are making all of that effort to defray the costs, then you’re certainly on the right path. Great job at controlling the costs; your investment will be relatively small (i.e., not $200k) because of that.

      In terms of the return on that investment, it looks like the notorious nursing shortage is over until 2020 (, but it looks like the average nurse salary is still very healthy at $66k ( As long as you do well in school and stand out among your peers, you’ll get a very solid return on your investment.

      I’m no expert, but based on the facts regarding your investment and the potential return, it appears that you made a very solid choice to go for the four-year route.

      And by the way, congratulations on being the trailblazer for your family. I’m sure that takes a lot of guts, so good for you for going after what you want and breaking the mold. I wish you the best of luck.

  4. Carissa H.

    I am also an 18 year old who follows your blog because of my concern with student loans and being in debt for the rest of my life… My parents advised me to save money and go to a community college for my first two years, stay close to home, figure out what I want to do etc. But I decided against it because I worked hard in high school and felt I deserved some sort of reward by experiencing college life. I just finished my freshman year at Pepperdine University(55k a year) in Malibu, CA and loved it! However I’m still am trying to figure out a major. Because of the small school, our options are very limited. In high school I was interested in Neuroscience, however I chose a school that did not have that major ….So I started my year declared as a Psychology major, and now I’m deciding between Integrated Marketing Communications, Business Administration-very general when I’d rather focus on Marketing with a minor in Sports Medicine. I would love your input for each of these majors since I noticed PR, Advertising Mass-Media was on your “don’t major in this” list. I was interested in a Brand Manager job or anything related to product development, consumer behavior, marketing research. I’m pretty good at math and enjoy it which makes me lean towards Business a little bit too.
    Thank you for your advice and any input you give me. I wish you luck with the rest of your financial endeavors.

    • Pepperdine is pricey. I got my undergrad in business administration at Michigan and made $52k/year out of the gate, which you might be able to do, too (my biz degree was general). If you’re financing all $55k/year for four years, you’ll have $220k/debt, or $2k/month. $52k/year of salary after tax boils down to $37k/year or $3k/month. If your loan pmts are $2k/month, you have $1k left to live on. Can you survive on that? And if you need all $1k to live on, then you can’t pay down your loans early, and you’ll be paying them down for the full 10-15 years.

      I get the attraction to going to a name-brand school and I understand the sense of entitlement you feel after working so hard in high school, but are there cheaper in-state schools that are just as good? I honestly think that your parents were on the right track…

      Here’s the thing, and I’m going to write a post about it soon: schools are raising their costs because of people like you and because of banks like the one that’s financing you. Banks are willing to fund education because they see it as a safe bet, and you’re willing to take out a ton of money because you want to go to a really good school. The school sees that the elasticity of the demand for their services is extremely low (i.e., people will pay almost anything for a Pepperdine degree), so they raise their prices. You have to be careful. I’d start looking at other options unless you’re comfortable with the math I laid out in the beginning. Are you going to live with debt for the “rest of your life?” Probably not, but the road to pay it down will not necessarily be easy.

      • Carissa H.

        Well I’m not taking everything out in loans, Pepperdine is generous with scholarships and grants.. I will probably graduate with a 50k debt. So it is costing me about the same to attend Pepperdine as a UC school. I’m not sure about Graduate school or MBA afterwards. Do you have advice in majoring in Business over Integrated Marketing Communications if I just decide to get my bachelors in the job fields… I have heard that you can major in almost anything, get experience in business and go get your MBA later. Is this true?

        • Oh, that flips the script quite a bit; $50k in debt is far more tenable than $200k. Nice.

          At HBS, my peers were from the typical business areas like finance and consulting, but we also had some from non-profits, the military, and Teach for America, so they didn’t necessarily get their experience in business. There was also a wide range of undergrad majors represented.

          So you could say that you can major in almost anything and get experience in almost anything, and then go get an MBA, but the onus is on you to tell a compelling story to the admissions board about why exactly an MBA is the right thing for you at this point in your career and how you believe your experience can add value to classroom discussions. The military guys usually said something to the effect of, “I can run a company/squadron/battalion (whatever the right military term is), but now I want to run a division at a company and I need the skills to do that,” and the teachers might have said something like, “I can run a classroom, but now I want to run a start-up, and I need the skills to do that” etc. etc.

          In terms of your specific question of Business vs. Integrated Marketing Communications, it really just depends on the field you want to gain experience in and which of those two degrees will help you get it. It almost feels like a toss-up between the two to me, but I’d just want to make sure the IMC focus will still load you up with some critical quant classes like finance, accounting, and business stats that are not as intuitive and as easy to learn on the job as something like marketing.

    • Bryan F. Espinet


      I must begin by saying your sense of entitlement for a pricey school just because you “worked hard” for your grades is foolish at the most. Working hard is part of life for those that want to do more than spend their whole lifes on the “average” classification. Making a foolish financial desition based on the name of the school ( and by God’s sake is not Harvard you want to attend, is a no name school) is a mistake. Think this clearly and sit down for a second and make your own numbers, would you prefer the “foolish dream” route and imprison yourself for life on $100K++ of debt or go to community college and then transfer to a state school and end only with around $50K or less in debt. Besides the degree you seem to be pursuing will not bring you financial reward unless you do a PHD, so be careful on how much debt you plan to get into before living in a dream rather than on reality.

  5. Barbara

    Right on, Joe, except I really do not believe I gave you $5.00 when you were 5……possibly a quarater!! :)!! LOL!!

  6. Grant Joslin

    I just turned 20 yesterday and I’ve been following the blog since October. I’m a junior studying accounting for [almost] free, which is a great situation to be in.

    • Grant

      In addition to being a tree in the woods (well, two, kinda), I’ve got to point out that when people my age were finishing high school, the nation was in a kind of emotional shock when it came to finances due to the late 2008 crash. That was the fall of my senior year of school, after all. Given that environment, it’s not so surprising that some of the critical final finance lessons weren’t being imparted (although I wouldn’t argue that they should wait until the end of high school…)

    • The ROI is strong with you.

  7. Great post Joe.

    I respect your honesty in pointing out the problem of going to an expensive school to get a social degree and borrowing huge amounts of money to do it. You are brave to take that on since so many people try to separate the noble intent of education and the harsh realities of student debt and how the marketplace values certain talents. This is where a lot of that “harsh attitude” comes from.

    Student loans can be a very dangerous tool when a person’s college or life plans don’t work out exactly as they planned. Life has a tendency to throw curve balls from time to time. Your point about teaching your children about money is so important so a young person doesn’t cause severe harm to their financial future with debt. Or at least it can help reduce the risk of making some really bad decisions that could last a lifetime.

    • I’m just trying to look out for these guys who have the entire world in front of them and might need a little bit of guidance…as you said, a bad decision in your teens can wreak havoc for the rest of your lifetime.

  8. I’d have to disagree with Computer Engineering. I received my B.S in Computer Engineering from a top tier school and was able to land a fantastic job in consulting straight out of undergrad. I started with a decent starting salary and within 5 years of working, I was making a six figure salary and have been making a solid six figures for 6 years. I think computer engineering is still a great major to pursue for those students who are interested in both engineering and computer science. A student can later decide which curriculum they would like to focus on – whether that is the engineering side or the programming. I decided to go with electrical engineering because I enjoyed my engineering courses. You would ask then why did I decide to not pursue a career in engineering? Well, because I had internships in engineering and knew that it wasn’t for me long term. I chose a career in technology consulting so I could actively travel and work with different clients solving their complex problems.

    I think it’s important for students to actively attain internships while in school, so they can figure out what they want to do in a full time job. They would be able to see first hand what experience they will gain, who they will work with and the culture of the company. Interning gives the student a perspective of what they will be able to attain if they work and stay with a company for x amount of years. I think the degree you study is important but I disagree that you shouldn’t study certain majors because there may be a small ROI. A student should study what they are interested in and not what pays the most.

    • Hi Zeona, the Computer Engineering degree that’s called out is the graduate version, not the undergraduate one, like yorus. I don’t think anybody would disagree about the immense value of an undergrad degree in computer engineering.

      I completely agree with you about the importance of an internship. I took a summer off from carpentery and interned at Dell, and that was instrumental in landing a full-time position with them after I graduated.

    • Zeona, just re-read your comment and wanted to write a quick follow-up–
      “I think the degree you study is important but I disagree that you shouldn’t study certain majors because there may be a small ROI. A student should study what they are interested in and not what pays the most.”

      I competely agree. Nobody said anything about studying a major based strictly on the salary of the job that it’ll land. I.e., go ahead and study social work (or English or theatre , etc.) even if you might cap out at $40k/year. Just don’t spend $200k to study it.

  9. UFAshley

    I definitely agree with your premise, and I wish I had more foresight when I began grad school in 2006. My Masters is in a field that was listed among the best careers in those Money/MSN/Forbes type articles and considered a safe bet before the financial crisis, now, not so much. Honestly, back then I thought I’d be living in a mcmansion driving a Land Rover by now. Ha! (Good thing I’m not, though, ugh, seriously. My future aspirational self was kinda gross).

    I really do love my work, but the lack of opportunity for career advancement is really frustrating….but going back, I’m not sure I would change my path. I graduated from a top program in my field with $50k in debt….and don’t quite make that much annually almost 5 years out from graduation. I alternate between being really depressed then complacent, because I can’t imagine having another career, and I’m surrounded by lawyers who are a lot worse off (and they went to top tier schools)! Bottom Line: I just wish I had taken out less debt and didn’t treat the money I made from internships as fun money.

  10. Mark

    Hey Joe–you talk a lot about ROI. But, how do you value the intangibles where it’s not a great ROI. For example, I’m already at a post MBA salary (over 100K) and struggling to know if I should go back to get my MBA. I have a good feeling that I could get into a top 5 MBA program. But, the ROI isn’t there. What are your thoughts?

    • Somebody asked me this same exact question over Facebook. We went ‘round and ‘round, back and forth, and I was never able to give them a straight answer. Intangibles are so extremely personal, it’s tough to make it relatable.

      But let’s review the intangibles and get them out there. Meeting new people who are often smart and talented and have already done impressive things with their lives and will go on to do more impressive thing with them. HUGE. Also, having your preconceptions and theories about life and people and business tested and rejected in a group of your peers. HUGE. Also, learning a lot about something very specific and becoming a “master” of it. HUGE. Also, getting out of the daily grind and having lots of new and interesting experiences. HUGE.

      The downside? Two years without a $100k+ salary and paying $100k+ for the degree. Total cost is $300k, invested over 20 years at 7% = over $1M. HUGE.

      Do you value new friends, knowledge, idea sharing, and new experiences at or above $1M? Only you can say for yourself. I’m sure we could list many more intangibles, but this is how I would start to think about this question.

  11. Great post Joe. Been following the blog for awhile. Definitely inspired me to be more frugal and more conscious of what I spend.

    I think graduate programs are even more expensive given that there’s another cost: giving up two working years while you are in school, making the total costs of higher education much higher. Last year I did forego the opportunity of getting an MBA and instead pursued a real estate opportunity. If I had gone to school I might have missed the opportunity altogether!

  12. Alex

    I actually just turned 18 two days ago, so I was still 17 when I was reading your blog. I have read through every single post on this website and most of the comments, and it really has given me a new perspective on paying off student loans.

    I will be attending the University of Chicago and double majoring in Economics and Math this fall. At 60k a year, it’s not cheap (although school based merit grants and National Merit Scholarships help). I could have gone to my state school and come out with about 12k ahead (in stipends plus a full ride). However, I thought the ROI of Chicago – name brand, proximity to a major financial city, arguably the best undergrad Econ program, and a generally great education – would pay off by itself. But, I also found myself looking at the intangible ROIs, like the experience, the kind of kids that go there, making connections with people that will definitely go on to HBS, Stanford, Wharton etc.

    I personally don’t think choosing a program should be exclusively a question of money. Fit had (and will have) a lot to do with my choices for graduate school, jobs, etc. But finances are important to me too – I have a personal brokerage account, a savings account, and checking account, with investments that have been, for the most part, positive.

    To go to Chicago, I will have no debt coming out, between my parents’ money and my own. But, that means I will have to take out loans to go to grad school (your blog convinced me that I wanted an MBA after I kept struggling between that or a Ph.D in Physics or Economics). To me, that was the better choice than going to my state school and being able to pay for grad school without taking out loans – I definitely want to go to a top 10 MBA program, so it would be about 100k – 150k in debt, depending on what kind of grants I could net.

    Am I totally off the ball here? Or, retrospectively, did I make the right decision in choosing my path? I’d like to think I’m slightly more fiscally responsible than most teens my age, but this decision has been one of the hardest of my life. Your blog is awesome by the way!

    • I definitely don’t think you’re off the ball. I’m glad you looked at more than just the hard costs and benefits of the program you enrolled in. As for the MBA, Booth is an excellent choice and you should be able to pay off the degree fairly quickly if you live frugally when you get out.

  13. There is a whole body of information right now about how graduate schools are failing to be honest about future salaries and employment to their students.

    My recommendation is to avoid going to an expensive school because it is the ‘best one’ to which you were accepted. Are your cheaper your second or third choices legitimate options? Once you get there, pick either a major or strong minor in a ‘job related’ field. There are alot of starving actors out there waiting tables so a major in theater and a minor in art history while attend college in Kansas is not a good ROI. Major in theater and minor in computer engineering is much more marketable . . .

    (I liked the Asteroid and liberal arts degree link, which was funny because even though I went to a liberal arts college, I know people who completely fit that stereotype.)

  14. Jim B

    Hey Joe,

    The tone of your blog posts seems to have shifted since you paid off the debt and got some press recognition for the effort. The blog used to be fun and interesting war stories of you climbing the mountain of debt pay down, which I certainly applaud. However, now its become a bit of a smug and self righteous soapbox for you to preach the gospel of ROI to the young masses.

    Sure, I Know I’m not obliged to read your stuff if I am not interested but just thought you might appreciate the feedback.

    • Hi Jim, thanks for the feedback; I respect your opinion. I’m still looking for the “next voice” of this blog and seeing what topics resonate with the current and future readership. This post and Pre-signing Considerations have generated the most discussion and social media sharing out of almost all of the posts on this blog–The Challenge, Mission Accomplished, and the NMHD vid making up most of the understandable exceptions. If this post hadn’t driven such a great discussion in addition to being shared on Twitter and Facebook, I’d be inclined to share your point of view. Based on the evidence, however, I will respectfully disagree with your assertions.

      I think what’s really remarkable and insightful is what happened to the number of subscribers when I published the last post. Within 72 hours of publication, the number of subscribers to this blog dropped by eight and then went up by eight so that the net stayed the same. What this tells me is that the demographics of the readership are changing: people like you who tuned in for the war stories are tuning out of the student loan advice, which makes a lot of sense if student loans are of no concern to you. However, there’s a group of folks out there who are at least mildly interested in my thoughts on student loans.

      I’d be happy to hear what you think I should write about if it’s not student loans and if I no longer feel comfortable sharing my own personal financial endeavors with the world. The obvious suggestion would be to stop contributing to the blog, but with it still getting 2k+ hits a day, I’m not ready to shut something down that still seems to be adding value to poeple’s lives.

      Thanks in advance for your additional feedback; I look forward to reading it.

      • Hannah

        Agree with Jim that the posts lately have a certain amount of smugness. Lately the theme has been how famous you are: “look guys I’m on a dating show, look I was on this radio show, CNN interviewed me….” Congratulations on the success you have had lately (it’s not like I expect you to not share that with your readers) but I’d like less ROI posts and more posts like the 6 figures ain’t crap post and the goals/rules post basically posts where we see your ongoing frugality. The posts that I enjoy the most in this blog are the self reflective ones. I understand that you might be hesitant to write those kind of posts since you’re no longer anonymous.

        Also you’ve whined a lot about not having done anything to help people and how you should look into volunteering. I’d like to see you actually do that instead of just talking about it. I really hope you do something charitable w/ the money and dont’ put it towards your mortgage.

        • Y’all are going to have to enlighten me with your definition of “smug.” I was helping college students think about their student debt since I have a bit of experience in that department. Next time I try to help an old lady cross the street, I’ll try not to be so damn smug. Geez!

          I’ll grant you that I need to start actually looking into volunteering, but not with money, as you seem to suggest, but with my time.

  15. Nimrita

    Its a funny coincidence that you wrote this article that pretty much describes the point in life that i am at.
    I am 17 and in a few weeks i’ll be starting my undergraduate education at UC Santa Barbara. Although my major is currently undeclared I plan on either going to medical school or pursuing an MBA. I’m only 17 so its hard to pinpoint what exactly i want to do for the rest of my life. Unfortunately, my parents will not be paying for my undergraduate expenses, therefore I will be taking a loan out for my undergraduate and graduate school. Additionally, I will be recieving nothing at all from FAFSA or any other government student aid because my parents income is to high to meet the requirements. Its the middle class crunch where we have enough to live comfortably but will be stretched very tight with the addition of university expenses. Knowing that I will be in a tremendous amount of debt is extremely scary and I understand that working hard and choosing the right field is important. In fact, thats how I envision my future – working hard to get ahead, making wise money choices, and living simple so that i can pay off my debt as quickly as possible. However, there is some doubt that I may be blindly digging myself into a hole that I won’t be able to get out of.
    Just wanted to know your thoughts and advice on this. Your blog has been super helpful and gives me encouragement and hope for my own future.

    • Jen


      I am not a financial advisor, but I analyze people’s income and assets for a living and I went to a private school that left me with some debt. You may want to consider attending a junior college for a year or two and then transferring to UCSB. (Don’t knock community college because at least half the people I know that graduated from Berkeley were admitted as transfer students.) It’s much more cost effective and I believe California still has a guaranteed admission program for the UC school system if you transfer as a junior. I worked the entire time I was in college so I could pay my living expenses and just take out loans for tuition. The key for you is to take out as little as possible. Strike a balance between enjoying the college experience and living frugally. You don’t have to live as frugally for four years as Joe did for seven months, but don’t be out buying clothes or eating out frequently if you’re putting it on a credit card or paying with a student loan.

      Education is an investment in yourself and the cost is worth it if you can get an in-demand degree at a reasonable price. Your degree is non-transferable and there is no re-sale value like a car. Student loan debt cannot be discharged in bankruptcy (except for rare exceptions like permanent disability) so don’t take out more than you’ll be able to afford on your future salary. Just be smart about your education and school costs. Your post proves that you’re on the right track and I am sure you’ll be fine.

  16. The first site I check every day is this one. You’re being heard Joe and I think this site is extremely helpful to college students as well as to people like me that needed a kick in the pants.
    I think if you were to shut this site down any time soon, I’d have to see what Austin was all about and then smack you upside the head.:)
    Just keep doing what you’re doing. It is VERY MUCH appreciated by many many people.

  17. Nia

    Hi, I’m sure you have a nice young audience, and that’s great! As for me, I’m 23. I applied to my Master in Public Health (MPH) with focus in epidemiology, and I’m supposed to start this fall. Tuition and fees are no more than 20,000 /yr. Luckily I finished my undergraduate degree with 0 debt thanks to a Volleyball scholarship. But now for my MPH most scholarships are for continuing students. I find your blog very inspiring, and I have high hopes I will find a job that will help me pay off my debt fast. I know I can live for under 1000/month, I’ve done it before. But I’m also scared of not finding a job, sometimes I just wonder if it’s worth the debt going to grad school, but then I look at what I’m doing now and I’m better off starting my MPH. Right now I live in Puerto Rico with my parents, and If you think the job market is bad in continental USA, you can’t even imagine how bad it is in Puerto Rico. I can’t seem to find anything with my BS in Biomedical Sciences … at least I don’t have to pay off loans. Excellent post!

  18. MJ

    I really appreciate you continuing to reach out to folks just starting this decision making process. Yours is a message that needs to be told and heard.
    Thank you for the courageous benevolence to share. The only tragedy is that your common sense, and the facts, are actually news, rather than an every day practice by the majority…..please keep sharing.

  19. MBA student

    Joe, information and views like this are long overdue, keep it up. We’re all responsible for our choices but higher education has now gotten to the point where making the wrong choice at the age of 17 can literally ruin a person’s life and parents and students need to keep criteria like this at the forefront of their minds as they decide where to go to school. Personally I’m actually a little more extreme in my view than even your post. I think that ROI (or if you want to be really precise net present value) should be the main criteria for selecting a school or program. I know folks want to talk about the intangibles but I’m of the persuasion intangibles are very much secondary when tens if not hundreds of thousands of dollars are on the line. I do have to state though that certain things that other people define intangibles such as interacting with the best and brightest at HBS as well as the “prestige factor” are not what I define as intangibles as networking with future business leaders and the brand name of your school especially for an MBA will do a great deal to enhance one’s earning potential and thus ROI. However, everything that doesn’t factor into cutting education costs or enhance one’s ability to earn more money is to me secondary when evaluating schools.

    Like I said keep up the good work. I am currently going through the scenario you’re describing. I’m about to start my first year at a top 20 MBA program. When I was deciding where to go to school how much school would cost and especially in the case of an MBA, how much the median grad from a prospective program would make starting out factored heavily into my decision.

    On a side tangent, do you mind telling the forum what your GPA and GMAT was given that you got into HBS?

  20. Andrew


    To make a long story short I will soon enter as an undergraduate at Harvard University. Part of this endeavor is being funded by scholarships, but yet a portion of the tuition still remains. Any tips on exactly how to finance the cost without taking out, or at least minimizing the need for student loans? The last situation I want to be in is being a twenty-two year old college graduate with an unprecedented amount of student loans to pay off.
    Any tips in terms of investments? I will obviously have a job, but for additional income during my college years.

  21. Great post! I’d extend the law degree to the 2nd and 3rd tiers as well. You’d be surprised just how many people invest in law school without thinking of the ROI based on their school. During the application process, I knew that I should only go to law school if I could get into say something in the top 30. Running law schools is a business and there are way more law schools right now, including non ABA-accredited ones, than necessary to supply the market of attorney jobs. That being said, my loans total approximately $100k and the expected ROI was a $160k job (graduated from UMich). Unfortunately, this darn recession has plummeted my ROI to 1/3.

  22. Harvard Grad

    Add public health to that list – I graduated from Harvard School of Public Health $65K in debt making $37K/year. That was 10 years ago. I’m still working on the loans (obviously) and wish I’d looked before I leaped.

  23. Shay

    I’m 20, and I read your blog 🙂 See, there are much more of us than you thought.

    I actually wanted to make a quick comment about the graduate degree in Computer Engineering. For most industries, you’re right: a M.S. in Computer Science/Engineering would be completely useless. However, for the field that I want to go into, both an M.S. and a PhD are integral. I plan on going into artificial intelligence research, and there’s pretty much no way I’ll be able to do that without several years of school beyond my bachelor’s degree. With AI as my research focus, I’ll hopefully be looking at a salary of $95,000+ after graduation.

    But for most people, you’re right, it would be a total waste of money. I mean, grad classes in computer science focus heavily on theory, and you don’t really need that much theory to create a software program.

  24. Mo

    Hey Joe,

    I really appreciate all that you’ve done with your blog. I recently finished graduate school and I only have about $14,000 left in debt, which I’m planning to kill off in the next 5 months on a mere $59,000/year gross income. Thanks to your efforts, I’ve started my own simple blog about it mainly as a tool to keep myself accountable and motivated. Without seeing you do it, I don’t think I would have gotten the motivation, so thanks so much buddy!

    • EXCELLENT! What’s your blog address?

      • Mo


        It’ll be a chronicle of my journey. Started with me selling my car, and now I walk everywhere (and I’ve lost weight doing it!) I generally post about what I did on a given day toward defeating debt, or what I learned from/about friends in that regard. I even have a cool “Today’s Debt Defeating Accomplishment” at the end of my posts to keep me motivated.

        I’ve only been at this for a short 2 weeks thus far, but it’s been AWESOME! Learning a lot about how cheaply I can live, the important things in life, and as I’m trying to find additional revenue sources, I’m learning a lot about the world I never knew before.

        I’m really excited about this, and I thank you a ton bud!

  25. Pingback: Operation Obliterate Debt « Student Loan RAGE

  26. Drisdy

    after getting the link to your blog from a friend this morning, i spent alot of time reading it through from beginning to (almost) end. this was definitely an interesting journey to read about. not an easy one, as you’ve obviously attested to. but still quite an amazing, memorable and inspiring journey for me to read about.
    although my undergrad/ grad school student loan was not as astronomical as yours, i think it sat at ~$50K when i got out of school in 1998. but at a social worker’s salary working in non-profit (starting at $32K pre-tax!!), it looked and felt like Mount Everest.
    I didn’t take my loans seriously for a couple of years, and paid the minimum on it every month, thinking i had the rest of my life to pay it back. Then I came to the rude realization that I’d be paying the government much much more than they had lent me to go to school.
    fortunately i went to state school in ny for undergrad and didn’t end up with much in student loans because i worked through my summers and had some grants to pay in-state tuition, but going to social work school 2 years full-time at NYU left me with what i felt was an insurmountable debt. but some friends of mine had been taking the “Crown Biblical Financial Study” and challenged me to get rid of my debt instead of taking my time with it.
    so after about 4 years of scrimping and saving, i remember writing my last huge check to them, and felt a huge weight lifted off my shoulders… so definitely a HUGE KUDOS to you!!
    now to figure out how to pay off this mortgage earlier than later!!

  27. sakky

    While I most certainly appreciate the ROI-centric sentiments expressed in this blog, I am afraid that I must disagree with some of the analysis provided in the examples.

    To wit:  Joe discusses the financial folly of middle-class families sending their 17-year old children to study social work at Columbia for $45k a year.   One slight problem with that example is that Columbia doesn’t even offer an undergraduate major in social work, which is presumably what that hypothetical 17-year old would be pursuing.  Columbia does offer a master’s degree in social work, but I suspect that very few 17-year olds would be entering such a program.  

    But the larger problem is that even if Columbia did indeed offer an undergraduate major in social work, I doubt that that would substantially change the incentives faced by either that hypothetical students’ parents and/or the students themselves.   The hypothetical 17-year Columbia social work student is likely not pursing such a major exclusively for the purpose of garnering a career in social work.  Rather, what the student is pursuing is a bachelor’s degree.  And not just any bachelor’s degree, but rather a bachelor’s degree at Columbia:  one of the most prestigious university brands in the world.   *That* is what the parents are really paying for.  

    The preceding statement has two distinct points, each of which merits further explication.

    #1:  The student is pursuing a bachelor’s degree.   Whether we like it or not, the undeniable fact is that nowadays – with only a few minor exceptions such as entrepreneurship and professional sports/entertainment – in order to have a reasonable chance of a middle-class lifestyle, you basically need a bachelor’s degree.    You won’t even garner a callback if you don’t have a degree because your job application will inevitably be filtered out by the search algorithms erected by company HR departments.  Nor do companies particularly care what you majored in, as long as you have a degree.  

    Which leads to a related point.  The truth is, most people will not pursue a career that is directly related to their undergraduate major.   Most poli-sci majors will not become professional political scientists.  Most history majors will not become historians.  Most English majors will not become literary critics.   Yet given that completing a bachelor’s degree requires majoring in something, many students decide to take that opportunity to pursue an intellectual hobby, which for some people might very well be social work. If you have to major in something anyway, why not choose something that you like?

    Granted, certain majors pay better than others – engineering and computer science being prime examples. Hence, one might think that everybody ought to then pursue those majors. The problem is that the higher-paying majors also tend to have the most demanding workload (and harsher grading curves). Engineering majors are particularly notorious for their high stress, particularly during what noted engineering professor David Goldberg calls the lower-division “math-science death march”. Hence, many students rationally decide to forgo a difficult and time-consuming major such as engineering in favour of an easier albeit lower-paying major which allows them to fully enjoy their college years whilst still obtaining that all-important degree. After all, you’re only young once. {Indeed, I can think of numerous former engineering students who bitterly feel that they wasted their precious college nights stuck in the library desperately trying to crank out another engineering problem set while their non-engineering classmates were having the times of their lives.}

    #2) The student is pursuing a degree at Columbia. Let’s face it: there are only a tiny handful of prestigious university brand names in the world. But Columbia is one of them. A Columbia degree – regardless of the major – opens doors that degrees from most other schools do not. This is particularly true for the elite, high-paying finance and consulting firms that almost exclusively recruit at only the high-prestige schools. {Incidentally, this is why students at such schools have weak incentives to major in engineering, for even an Ivy League humanities major can be hired right out of college as a Wall Street investment banker and make far more money than an engineer would.)

    {I believe it also bears mention that Columbia – along with other wealthy prestigious private universities – offer impressive financial aid packages. For example, Columbia’s official policy is that all undergrads whose families make less than $60k a year will have a parental financial contribution of ZERO and not be required to take out ANY loans. {Granted, the student will have to participate in work-study and contribute their summer job earnings.} I am not aware of any state university that has made such a blanket commitment to its entire undergrad student body. The upshot is that many students would find that schools such as Columbia would actually cost them LESS than would attending their state flagship university. }

    Therefore, the hypothetical family sending their 17-year-old to Columbia to study social work may not actually be an example of financially folly at all, but actually just the opposite: such a family might very well be the archetype of financial savvy. That kid is getting that all-important bachelor’s degree at one of the most prestigious schools in the world (and possibly with a large financial aid package to boot), and social welfare is just the vehicle by which to obtain that degree.

    Nevertheless, I most certainly agree with the general point expressed in this blog: one must always be cognizant of the ROI of the degree program that you choose. I am just not sure that social welfare at Columbia is necessarily a valid example of a poor choice.

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