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21 May 2020, 18:13
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Regenerate
This was the reasoning that I ultimately used to pick Owen.
NickC137, I do agree that Stern has a more upside potential, especially considering OP's desire for MBB in NYC. Personally, I was willing to trade (a debatable amount of) that upside for the freedom to bail out if a high-intensity career didn't end up being as rewarding as I anticipated. And, you're right - if OP is committed to a high-paying field, the probability of Stern resulting in more long-term gain is higher. However, for me, that long-term was too far away and filled with too many unknowns to give up the cash required to secure it. Invest according to your own personal risk tolerance.
Big takeaway for me: OP, wherever you end up, it looks like you've got a good chance at being fairly wealthy in the next 20-40 years.
Thank you all for your comments. This has been one of the most interesting admissions threads I've read.
bigge2win
Joined: 18 Jul 2012
Last visit: 28 Jun 2020
Posts: 98
Given Kudos: 2
Location: United States (CA)
Schools: Ross '18 (A) Tuck '18 (WL) Duke '17 (WL)
GMAT 1: 700 Q49 V36
GPA: 3
WE:Operations (Insurance)
21 May 2020, 18:25
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NickC137
Nice work on the quick swag on the ROI. It's always tough to formulate a model comprehensive enough to cover the different assumptions involved. I actually had quite a similar model when I was in bschool that tested scenarios of the ROI starting at Consulting vs PM vs LDP with assumptions for 2-3 year promotion steps on top of inflation, a scenario for exiting consulting, etc.. I did notice that your model was a bit conservative on the interest rate. 7+% is a bit high. Someone could just get a refinance for 2% from First Republic Bank, and they're around 4% for all lenders now, which could stay that way until this person graduates. Also, internship money and the sign-on bonus for any consulting offer usually goes towards loans. (I understand that the opportunity cost is that the internship income and bonus could be used for other things, like down payment for a home or investments, if the person had no debt from Owens.)
And one other important note, I also do know that if you get an internship with Deloitte and Accenture, the firms will offer you 1 or even 2 year pay down of all tuition (not TOA) for that 1-2 years (grossed up to cover the taxes, where the amounts cover the full year and not need the student to pay taxes). It's quite a program they have to draw in talent. I doubt this exists with MBB, but that really reduces the loan burden. Deloitte and Accenture do not offer those amounts in cash equivalents if you have no loans. Maybe these programs changed in the past 2 years, but they were huge draws for people who interned at those firms to not re-recruit for MBB in year 2.
Some additional food for thought here on the debt decisions.
21 May 2020, 19:02
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bigge2win
Some really good points here! The summer internship money and signing bonuses can definitely be lucrative. I went to a consulting firm that provided a substantial amount in tuition reimbursement and signing bonus as well. Through the summer internship and signing bonuses, I actually ended up making more money last year than I ever had before Stern.
For the interest rate, that is also a great point. I wanted to be as conservative as possible with the loans (maximum borrowing limit and highest interest rate) to see if that scenario would even be worth it. I also liked the reliability of the sources for those loan numbers (US Govt) rather than trying to guess what OP might be able to get through a private lender. But 100% valid about being able to get a lower rate. I will probably be trying to do that myself later this year.
