Tuesday, April 30, 2013

Holy avocado student debt

I'm writing this on a Tuesday evening, having just realised that I took my last class in my graduate program today. But now is not the time to reminisce - that's in a few weeks.

Instead, I'm going to talk about the heart attack I had earlier this week.

Since I'm close to graduation, the school sent me a reminder that I had to undergo Federal Student Loan Exit counselling. Oh, whatever, thinks I. I started doing it on Sunday.

Even though I had paid for one semester out of pocket and received two scholarships (of small amounts, but better than a kick in the rear), I'm looking at a debt burden of about $117K!

I personally hate debt. Some debt is good - mortgage debt, for example, because I get tax deductions on the interest payments. Technically student debt also gets some interest deducted, but I believe it's limited to $1500 a year. I had read a blog a while ago about a Harvard MBA who had paid off his $100K debt in 9 months - but he cashed out his savings, and didn't have anyone to rely on him. Unfortunately, when I graduate, I'm going to have to help maintain two households (my partner is enrolled at CMU also, but I'm probably going to be in California).

Immediately, I broke open a spreadsheet and started plugging in numbers about how much interest I'll end up paying in total if I just pay minimum, if I paid off early, etc. I also calculated what my monthly income would potentially be if I was on a $115K salary in California (holy 38% tax rate!) and what I could afford to dedicate to paying off loans, taking into account the ridiculous cost of living in the Bay Area.

Needless to say, it almost behooves me to draw up another blog to discuss my progress on paying that down, because it doesn't look promising.

There is a lot of chatter around in the media about the student loan bubble. Tepper increases their student fees by 3% or so each year, which is rather ridiculous. Someone told me that a lot of our fees go to pay for the PhD program, since it's one of the largest in the nation. I've already complained a lot about how I think Tepper is too expensive, so I won't jump back on that horse. Students aren't able to benefit from the record low interest rates - 6.8% flat is the government rate, and I believe 5% is the lowest private loan that anyone I've talked to has been able to get, and that was a variable rate loan pegged to the LIBOR. One of the scenarios I looked at for myself, I think was to pay back in 25 years, I ended up paying 150% of the loan in interest!

I did a calculation a while ago and came to the conclusion that the ROI timeframe for going to B-school was about 4 years. I neglected to take into account this crippling debt burden. If I was going to live in a reasonable city - let's say Pittsburgh - on that income, I would be able to pay it off rather quickly. Bay Area... not so much. But it's very difficult to find a job in the video game industry that isn't in California. The Tech Startup Boom is making things difficult for those who aren't making millions in stock options :).

The last comment that I'm going to make is going to resemble something thankful. I lived quite frugally over these last couple of years. I didn't go on any international trips, I kept my socializing and travel to a minimum, I lived in a cheaper part of town. A good number of my classmates went on every trip, went out every weekend, and engaged in other activities that would've cost a pretty penny. I can only imagine what their debt burden is. If they took out what Tepper had recommended each year, that's at least $140K. That recommendation didn't take into account all the trips and such, so there is a possibility that some students are looking at $150K or more.

Do I have regrets? A couple. But I think about it - that $3K trip to Peru for a week and a half ends up being a $7.5K trip if interest is factored in (at least). And all for what? Some memories and a couple of photos? Don't get me wrong, I'm all for travelling and experiences and such... but is it really worth having to keep paying off my student debt when I'm 53? It is too much - I'd rather do my travelling spending cash rather than credit.

Perhaps I'm just too boring, or didn't get to fully experience b-school. B-school is just 2 years of your life - that debt is going to linger for much much longer, and I'd rather not be in a situation where it could bite me in the butt.

Besides, I spent 3.5 weeks in Australia with my family and my partner and snorkelled the Great Barrier Reef. For everyone else, THAT would be the holiday of a lifetime.

Wednesday, April 17, 2013

Final Tepper Experiences

As I was writing the last post, I discovered a topic I probably should talk about.

So I'm well into my job recruitment phase, much much later than the rest of my class. Last set of statistics said that about 80% had job offers. I'm in that lowly 20% :).

I had my first interview in a while last week, and so I dredged up my old interviewing notes and revised over my STAR stories. I needed to desperately update them to include the stuff I did in my internship. Interestingly, I also found myself talking about the two big projects I'm working on right now - my Capstone and my Mobile App. In fact, my Mobile App project has become a staple mention in nearly every cover letter I write.

Even though we've been told it's OK, I didn't really like talking about my assignments at school. The Mini mester is not set up to be an immersive experience, so all assignments I do tend to be quite shallow. The Teamwork STAR stories I could generate wouldn't be very insightful, as we all tended to divide and conquer. While there have been some good assignments for personal insight, that's all they were - assignments. Things we had to do because we were assigned them, with a narrow band of requirements.

My pro-bono consulting experience at the end of Year 1 gave me some good stories, although I'm not too sure I would go through that again. Then, at the end of last year, I was part of a group who had to develop a Brand Strategy for an existing company. It was a local burger joint called Stack'd. At the end of it, we presented out findings in a presentation and report that the owners actually used. Look, ma, verifiable proof that I can do stuff!
Now, I'm wrapping up my Capstone project, and amazed at some of the things I've been able to do during this time. But more importantly, I feel that my Mobile project is a truly shining example of my education. If we get this published in June, I can now actually point to it and say - "I ran the team that developed that. I identified the features, the target market, and user testing." It is a physical (ahem) showcase of my work, that is very relevant to my career goals.

So many of my classmates haven't had this experience, or have been able to relay this experience in interviews. There is a lack of opportunity to do real projects that people can point to as evidence of their skills.

It makes me wish that there were more project opportunities (outside of tech and/or entrepreneurship).

Inter-campus teams

I just finished an assignment where I was working with a teammember from another school at CMU (ETC). We had to design a game together, playtest it, then write up the analysis of the game. It was due yesterday, and we got it in all well.

I recounted the experience to my boyfriend Chris - I wrote up the game rules and ensured the prototype was ready for submission a week ago, I wrote up the playtests and analyzed them, I rewrote the rules and the cards that went with the game, and created the Marketing document that we were also to submit. My teammate - he organized the playtests and put a rather half-hearted effort in with one of the card set designs. Chris said that I should've expected this. I gave him a quizzical look. He explained that Softs (a term meaning a mid-term presentation of sorts) are due next week, with Hards (the final presentation, I guess) due two weeks later, and everyone is on crunch time to get it done. The reason my teammate had teamed up with me is that he was hoping I would do all the work.

Looking back on it, yes, it did seem like I did all the work. I wasn't complaining about that when I was relaying the story to Chris. I was making a statement about how easily my teammate let me do all that. Normally, in my business teams, we'd all be chomping at the bit to get things done. There's a level of work output expectation that we all seem to have. It was rather different - I won't go so far as to say novel - experience to work with someone who wasn't so driven by such a high work ethic. While I've had my issues with teams in the past in this program, in general they've been very good to work with. I'm usually the organizer, getting people together like herding sheep. I didn't really enjoy it - so I was very glad when my teammate took that duty upon himself to be the coordinator of the playtests. Therefore, I felt it appropriate to continue to do the other aspects of the project - i.e. the deliverables.

Now, looking back on it, I can kinda see how I was taken advantage of, but we had the option of doing this project by ourselves and by the fact I avoided having to organize playtests was worth the team setup.

The next assignment is going to be interesting. I'm with a group of students from ETC, and we are required to make a pitch of a game to a publisher. We're to have an organization, roles and titles, and a budget. I'm a little afraid that my teammembers are just going to "let" me do all the business-work while they work on the creative side of things. I'd much rather it the other way around, since I already know how to draw up a budget; they may not. Learning experiences all around is necessary. We shall see.