Boston MSMFT BU Employment Report

[Artisan]

Hello everyone,

The new employment report from BU has been released recently:

http://management.bu.edu/files/2013/06/Class-of-2013-Employment-Report-website.pdf

To be honest, I find the domestic total comp pretty low, especially if compared to the figures reported by, for example, Columbia's MSFE:

http://ieor.columbia.edu/ms-financial-engineering-career-information

My comparison is based on the assumption that most BU graduates get jobs in Boston whereas those from Columbia continue their careers in NYC-based firms. Therefore, using any of the many cost-of-living calculators available online, we can come up with a fair comparison of the starting salaries between the two universities.

(I checked many of these cost-of-living calculators and most of them render about the same results. I have been using this one lately: http://money.cnn.com/calculator/pf/cost-of-living/)

What this analysis tells me is that -even after accounting for the geographic factor- starting salaries from top programs like Columbia's are -on average- much higher than those from a good (though not top-notch) program like BU's.

Then, my questions to all of you are:

1- Do you agree with me that -on average- there are considerable differences between the real value of these starting salaries?

2- If you do not agree, what do you think I forgot to consider?

3- Now, if you think that my analysis is in fact correct, then do you know what explains these differences?

Thanks!

 

[diegosanaz]

First of all, let's be careful when reading this kind of reports. From BU we would be carefull that it says "total compensations", which means it probably includes Base salary, bonus and maybe also signing bonus.

From Columbia, we are not offered averages, but ranges and some "*" that say "from respondents".

Now, from the calculator, a BU graduate (total compensation of $74) is equal to $119 in NY. Assuming mid points in the ranges are averages, an average Columbia graduate earns $205. Still, I think it's dangerous to make this assumption.

Non the less, is obvious that Columbia graduates do much better. This is of course for Columbia MFE being a top 3 program. This, and the celeb faculty, are the reason people prefer going to Columbia than going to BU.

BU is a good program, the difference comes from not being a top program.

 

[AndrewChang]

of the employers, I only see one investment bank (RBS).

 

[mfegrad]

This is of course for Columbia MFE being a top 3 program. This, and the celeb faculty, are the reason people prefer going to Columbia than going to BU.

Top three according to whom?

And let's be honest: the reason most people prefer going to Columbia is that the school is part of a certain football conference.

 

[Artisan]

Guys, I appreciate your answers. However, the goal of my initial post was to raise the question as if BU is worth the investment. I'm putting it on these terms now to underline the fact that the total cost of attending BU is very similar to that of CMU or Columbia -which, again, seem to offer much appealing starting salaries.

I think if we could get some BU graduates involved in the discussion we would get better insights. Anyone out there?

 

[mfegrad]

Says who?

Andy, we could use a lmgtfy feature here, it seems...
https://www.quantnet.com/search/1523794/?q=ivy league&o=date

edit: says you, apparently:

https://www.quantnet.com/threads/columbia-mafn-who-has-got-decision.12333/page-5#post-114063

https://www.quantnet.com/threads/columbia-mafn-who-has-got-decision.12333/page-5#post-114076


Artisan, to answer your question, where you go is entirely up to you. The financial services industry is not what it was a decade ago, and you want to give yourself the best possible chance at landing a decent gig out of one of these schools. The difference in comp probably comes down to what firms are doing the hiring. As a rule of thumb, BBs will generally pay more than consulting or insurance firms.

 

[Azamat Bagatov]

However, the goal of my initial post was to raise the question as if BU is worth the investment. I'm putting it on these terms now to underline the fact that the total cost of attending BU is very similar to that of CMU or Columbia -which, again, seem to offer much appealing starting salaries.

I think BU is doing a fair job given the fact that its graduates compete with MIT and Harvard graduates in Boston at career fairs. The employment report doesn't throw much light on whether the graduates got Boston based positions or positions outside. You also want to be careful since a lot of universities categorize students under those looking for a job and those not. So the 80% on the report falls under which of them? I'd find that out too. You might also wanna look at last year's stats and compare if it has been progressive.

Given above argument, I think BU is a solid Tier-2 college like someone said. If you are in the US, you'd want to visit them, get more information and then you can decide on whether you want to invest. They also have a good study plan and great career services. They are improving each year steadily and soon enough, I'm sure BU grads wouldn't find it too difficult to get a job in the Tri-State area.

 

[TraderJoe]

It is not fair to compare BU with Columbia.
Columbia should be compare with CMU and Berkeley and Princeton.
Probably BU should be compared with Rutgers and other Tier-2 schools and they are doing a great job in this regard.

 

[Artisan]

I think BU is doing a fair job given the fact that its graduates compete with MIT and Harvard graduates in Boston at career fairs. The employment report doesn't throw much light on whether the graduates got Boston based positions or positions outside. You also want to be careful since a lot of universities categorize students under those looking for a job and those not. So the 80% on the report falls under which of them? I'd find that out too. You might also wanna look at last year's stats and compare if it has been progressive.

Given above argument, I think BU is a solid Tier-2 college like someone said. If you are in the US, you'd want to visit them, get more information and then you can decide on whether you want to invest. They also have a good study plan and great career services. They are improving each year steadily and soon enough, I'm sure BU grads wouldn't find it too difficult to get a job in the Tri-State area.

Thanks, Aditya. As Diego and you say, we have to be very careful about the way we handle the statistics in these employment reports. That's actually the reason why I started this post and created the poll. I do not want to draw any conclusions on my own based on data that I might be misinterpreting.

I agree with you about BU being a very solid program (good study plan, great career services, etc). That's at least what I was able to gather from everything I read so far. In fact, that's why I ended up picking BU and not other tier-2 program for the comparison. It seems to have all the characteristics of a top-tier program except the average starting salary -not a minor detail, though. I want to understand if that's actually the case and, if so, why.

 

[Artisan]

Andy, we could use a lmgtfy feature here, it seems...
https://www.quantnet.com/search/1523794/?q=ivy league&o=date

edit: says you, apparently:

https://www.quantnet.com/threads/columbia-mafn-who-has-got-decision.12333/page-5#post-114063

https://www.quantnet.com/threads/columbia-mafn-who-has-got-decision.12333/page-5#post-114076


Artisan, to answer your question, where you go is entirely up to you. The financial services industry is not what it was a decade ago, and you want to give yourself the best possible chance at landing a decent gig out of one of these schools. The difference in comp probably comes down to what firms are doing the hiring. As a rule of thumb, BBs will generally pay more than consulting or insurance firms.

Thanks. It seems to be a fact that the financial industry has been shrinking in the last years. Under those circumstances, I agree that one will want to land the best program possible. What strikes me is the fact that, if there are these evident differences between programs, why they charge the same. Shouldn't tier-2 programs be cheaper?

 

[mfegrad]

Absolutely, but they cater to a lot of students who don't know any better and don't ask questions and think that they'll wind up as a BSD on a trading desk out of Podunk U's startup FE program. Not going to happen, but the schools get to rake in the cash, so all power to them. Not saying BU's program is of that caliber, but there's a slew of willing and eager applicants for every program.

And, truth be told, 75k in today's economy isn't something to sneeze at. With credentialism what it is and with a lot of kids out of undergrad not able to find any work (what they studied and how they spent their time is a whole different topic, of course), taking on a lot more debt to live above subsistence level sounds almost attractive.

 

[Artisan]

It is not fair to compare BU with Columbia.
Columbia should be compare with CMU and Berkeley and Princeton.
Probably BU should be compared with Rutgers and other Tier-2 schools and they are doing a great job in this regard.

Why not? If the cost of BU or any other tier-2 program is the same as that of the top programs, why can't we compare them from a RoI perspective?

The thing is that I might end up applying to 4-5 different programs in order to increase my chances of getting admitted. I assume chances are higher for second or third-tier schools. Therefore, I would be applying to programs with very different positions in the ranking (let's say 1, 5, 12, 18). Now, from a RoI perspective this does not make any sense at all because the RoI for CMU is completely different than that of IIT. In fact, whereas the RoI from CMU may look quite appealing, that of IIT may be completely unattractive. Consequently, applying to programs 1, 2, 3 and 4 may be a better strategy than applying to 1, 5, 12, and 18. Again, I think it all comes down to the cost of the programs.

 

[Artisan]

Absolutely, but they cater to a lot of students who don't know any better and don't ask questions and think that they'll wind up as a BSD on a trading desk out of Podunk U's startup FE program. Not going to happen, but the schools get to rake in the cash, so all power to them. Not saying BU's program is of that caliber, but there's a slew of willing and eager applicants for every program.

And, truth be told, 75k in today's economy isn't something to sneeze at. With credentialism what it is and with a lot of kids out of undergrad not able to find any work (what they studied and how they spent their time is a whole different topic, of course), taking on a lot more debt to live above subsistence level sounds almost attractive.

Thanks. I'm glad you understand where I'm heading with my analysis. Would you then recommend BU as a good tier 2 program to apply for? Is there any other tier-2 school that you would consider to be better? Thanks!

 

[Azamat Bagatov]

Absolutely, but they cater to a lot of students who don't know any better and don't ask questions and think that they'll wind up as a BSD on a trading desk out of Podunk U's startup FE program. Not going to happen, but the schools get to rake in the cash, so all power to them. Not saying BU's program is of that caliber, but there's a slew of willing and eager applicants for every program. And, truth be told, 75k in today's economy isn't something to sneeze at. With credentialism what it is and with a lot of kids out of undergrad not able to find any work (what they studied and how they spent their time is a whole different topic, of course), taking on a lot more debt to live above subsistence level sounds almost attractive.

I really think the cost of program depends on the department at which it is hosted. MS MF programs hosted at math departments cost a bit lesser than those hosted at B-schools and IEOR departments. And it is a known fact that B-schools charge higher $ amount per credit. I very much agree that schools reap a lot of green paper through MF/FE degrees. There was an article I read which showed the fee charged by each school increased by over 300% in last 2 decades while degree value hasn't increased much if any at all.

I agree with you about BU being a very solid program (good study plan, great career services, etc). That's at least what I was able to gather from everything I read so far. In fact, that's why I ended up picking BU and not other tier-2 program for the comparison. It seems to have all the characteristics of a top-tier program except the average starting salary -not a minor detail, though. I want to understand if that's actually the case and, if so, why.

BU, few years back, wasn't that strong a program. They were hosted at Mathematics department and charged less fee. Once they moved it to B school, they improved it in lot of ways, hired a new exec. director and bettered career services. I'm talking about the status 4-5 years back and how it improved up to now. As to why they increased their fee, the reasons could be many. But one I found common was that BU was always an expensive school for any undergrad or grad program. It seems to have a lot of reputation around the globe (recently, I saw an alumni event which was hosted in Delhi, India). They have 30K (or 40K?) strong alumni base and they know everyone's aware of this fact. So why wouldn't they charge so much? I'm not supporting it, it is too much for anyone to spend that kind of money on a degree but like mfegrad said, when we're willing to, why wouldn't the school charge it?

 

[bigbadwolf]

It seems to be a fact that the financial industry has been shrinking in the last years.

Yes, and this will continue for reasons I don't want to go into on this forum.

Under those circumstances, I agree that one will want to land the best program possible. What strikes me is the fact that, if there are these evident differences between programs, why they charge the same. Shouldn't tier-2 programs be cheaper?

As long as there are takers, they will charge as much as they can get away with. When there aren't enough takers to break even, the programs will probably close rather than reduce the fees.