Are MFE programs only for rich kids?

[kombuchalover]

This discussion is still relevant today as it was a decade ago.
We have a surge of interest in quant finance industry from students whose household income is lower and $100K for tuition is a fortune. This causes a big dilemma of how to afford an MFE degree to then get a $150K/year jobs.
The youtubers, social media influencers, finance bros play a big part in hyping this quant space causing many young people to have a very unrealistic view.

What is your take on this?

MFE price is overinflated. But international students are willing to pay so the costs will stay high. MFE is in general not a worthwhile investment unless it’s under 60k. Most people get screwed with the high debt costs that they accumulate because they don’t end up with a job that pays as well as the finance bros said they would. Classic case of survivorship bias . That’s life ig though lol.

 

[Andy Nguyen]

This is the tuition cost curves of the top 15 MFE programs. We track tuition data over the 10+ years. Some programs raise tuition cost 5% every year. It's fair to say many students won't get a good ROI.
A lot of people coming into the degrees because they saw on Tiktok, Youtube, IG where some undergrad kids got a 500K+ trading job. If you see those outlier numbers often enough, you will think it's the norm.
The next group of internationals will be from India and I am curious to see if there is any push back on the price. Or if there is enough students from China willing to pay, it will not make a difference.
It would be interesting to see how things play out in the short and long term.

 

[fatcatking]

This is the tuition cost curves of the top 15 MFE programs. We track tuition data over the 10+ years. Some programs raise tuition cost 5% every year. It's fair to say many students won't get a good ROI.
A lot of people coming into the degrees because they saw on Tiktok, Youtube, IG where some undergrad kids got a 500K+ trading job. If you see those outlier numbers often enough, you will think it's the norm.
The next group of internationals will be from India and I am curious to see if there is any push back on the price. Or if there is enough students from China willing to pay, it will not make a difference.
It would be interesting to see how things play out in the short and long term.

Wow, this is a gem.

They’ve become quite pricey

 

[jarryds]

Cost is something I have been trying to get people on this sub to wrap their brains around. The reality is, not everyone is in the same position. Some people come from rich families, some people get very generous private loans from their country of origin, and of course some people land those 400+ TC jobs right out of grad school.

But for the rest of us, paying 100k for 1.5 years of school is crazy. I've said this before, but quantitative finance became almost commercialized over the last 5 years and MFE programs have profited the most. These programs were able to justify 100k in tuition even for people who landed 150k jobs right out of grad school. The key here is - "right out of grad school." Now that the job market has taken quite a downturn, it will be interesting to see what that 100k degree buys.

100k MFE for a strong chance of breaking into quant, sure maybe. 100k for a percentage of the class to get into quant, eh.
OR
20-50k STEM MS, which buys you a chance at breaking into quant or better degree conversion into a different industry...

 

[fatcatking]

But for the rest of us, paying 100k for 1.5 years of school is crazy. I've said this before, but quantitative finance became almost commercialized over the last 5 years and MFE programs have profited the most. These programs were able to justify 100k in tuition even for people who landed 150k jobs right out of grad school. The key here is - "right out of grad school." Now that the job market has taken quite a downturn, it will be interesting to see what that 100k degree buys.

100k MFE for a strong chance of breaking into quant, sure maybe. 100k for a percentage of the class to get into quant, eh.
OR
20-50k STEM MS, which buys you a chance at breaking into quant or better degree conversion into a different industry...

“Now that the market has taken quite a downturn”- Could you please elaborate on this? When do you think the market will recover? How often do these cycles usually last?

 

[kombuchalover]

“Now that the market has taken quite a downturn”- Could you please elaborate on this? When do you think the market will recover? How often do these cycles usually last?

im not @jarryds, but I work in industry in USA… what I believe they mean is that there are less jobs in USA than in 2021-2022, and finance services is very cyclical. New grads are having a hard time finding jobs rn and every entry-level job is extra competitive. My firm had an entry level role open up last week and it had over 10,000 applications. In terms of length, no one really knows but the federal reserve seems to think the soft landing is on its way, so take that for what you will.

 

[fatcatking]

im not @jarryds, but I work in industry in USA… what I believe they mean is that there are less jobs in USA than in 2021-2022, and finance services is very cyclical. New grads are having a hard time finding jobs rn and every entry-level job is extra competitive. My firm had an entry level role open up last week and it had over 10,000 applications. In terms of length, no one really knows but the federal reserve seems to think the soft landing is on its way, so take that for what you will.

Oh wow D: I guess I am truly risking it all then.

Was the role in your firm QT/QR or in the other finance genres? 10,000 applications for one role is crazy. What do you reckon the numbers game looks like? (i.e. the number of jobs vs number of employable college graduates)

 

[jarryds]

“Now that the market has taken quite a downturn”- Could you please elaborate on this? When do you think the market will recover? How often do these cycles usually last?

Jobs have really dried up in post covid. There are really two main reasons:

1) Companies over hired and overpaid during 2020 - 2022 (ish).
2) Interest rates forced financial institutions tighten their belts.

If I had to guess, the QF job market will never completely recover. Sure there will be more or less available opportunities over time, but the cat is out of the bag. You have candidates from almost every career path looking to break in. Maybe in a bad market the top 25% candidates land a job, maybe in a great market the top 40% land a job.

 

[fatcatking]

Jobs have really dried up in post covid. There are really two main reasons:

1) Companies over hired and overpaid during 2020 - 2022 (ish).
2) Interest rates forced financial institutions tighten their belts.

If I had to guess, the QF job market will never completely recover. Sure there will be more or less available opportunities over time, but the cat is out of the bag. You have candidates from almost every career path looking to break in. Maybe in a bad market the top 25% candidates land a job, maybe in a great market the top 40% land a job.

Here’s to hoping.I really want to break into the US markets, and the only way for me to do that at an entry level is with a STEM degree from a US institution.

Popular opinions about the “booming” Indian market little consider intricacies, say market manipulation.