# DISCUSSION on second rated MFE programs

#### DominiConnor

I agree with the wolf, that a 7 year hole is hard to climb out of.
But...
We do see a trend of people trying to move into finance, without leaving the West Coast.

#### Tigga

On another thought, I think MFE programs will start mushrooming to feed endless stream of people jumping into this field.
One undeniable attraction of this career is the very high entry level salary. Just compare it with a fresh PhD who spends 5-7 years and then struggle to find a teaching job in academic with starting salary of 40-50K and no BONUS.
Even an MFE graduate from John Smith State College if he can get a job at John Smith Sate Insurance firm will get 60-70K starting salary.
This is why the guy who got a PhD and teaching somewhere also want to jump in. 70K+ bonus is way better than 50K and no tenure track.

We probably see more of John Smith type of programs. How they train and place the students is everyone's guess. A number of these graduates will be ill-prepared and end up unemployed but the allure of getting a very high entry level salary is impossible to resist.

So wolf,
Regarding your gloomy forecast of the fate of the programs and its students, I don't see the number will dwindle down anytime soon. Probably the number of suckers will grow but it's survival of the fittest

On another thought, I think MFE programs will start mushrooming to feed endless stream of people jumping into this field.
One undeniable attraction of this career is the very high entry level salary. Just compare it with a fresh PhD who spends 5-7 years and then struggle to find a teaching job in academic with starting salary of 40-50K and no BONUS.
Even an MFE graduate from John Smith State College if he can get a job at John Smith Sate Insurance firm will get 60-70K starting salary.
This is why the guy who got a PhD and teaching somewhere also want to jump in. 70K+ bonus is way better than 50K and no tenure track.

We probably see more of John Smith type of programs. How they train and place the students is everyone's guess. A number of these graduates will be ill-prepared and end up unemployed but the allure of getting a very high entry level salary is impossible to resist.

So wolf,
Regarding your gloomy forecast of the fate of the programs and its students, I don't see the number will dwindle down anytime soon. Probably the number of suckers will grow but it's survival of the fittest.

I agree with you (and with DC) that there are a number of people trying to get into finance, partly because of the allure of pay and partly because, well, just about every other sector is either supersaturated or offers crummy pay. So people will be drawn because of "expectation." In the medium- and long-term, though, many of these programs will fold (too many of them, already enough people in the field, and the profession itself probably needing fewer people in the future), and prospective students will become a more cynical lot, more resistant to the siren song of garbage MFE programs offering the moon.

One thing I haven't yet seen is the percolation of MFE material down to the bachelor's level. There's no good reason why it can't be done. Stochastic, C++, simulation, PDEs, time series, and so on can be taught to math undergrads in England, or math upper-division students in the USA. I suspect we'll see more of this in the future (there may already be instances).

Maybe Baruch can take the lead here....

#### Tigga

One thing I haven't yet seen is the percolation of MFE material down to the bachelor's level. I suspect we'll see more of this in the future (there may already be instances).
Here is one (set to open Sept 2008) Honours Math Finance
Another is from some university. maybe JHU. Can't remember at this moment
EDIT 1:
People take a shot at this at different angle. Here is an undergrad degree at U Michigan http://www.math.lsa.umich.edu/undergrad/actuarial.shtml
The program in Mathematics of Finance and Risk Management (or Financial Mathematics for short) is designed to provide a broad education in the quantitative aspects of risk management and finance. Financial instruments which are engineered today require sophisticated mathematical techniques for their valuation. These techniques come from the fields of probability, statistics and differential equations.

EDIT 2: Found yet another one
Major in Financial Mathematics
Offered jointly with the Department of Economics, this major is intended to serve students who are interested in applying the principles of mathematical and economic analysis in the financial services industry.

#### Tigga

In the medium- and long-term, though, many of these programs will fold
How exactly are these programs going to fold ? Quietly fold tents and leave town. Or die a slow and painful death ?
It has much to do with their business model. If a program is a known cash cow which most of them are nowadays, they probably will get less profit.
Consider the ridiculous amount of money they charge for admission, it's a stretch to say they will make do if business is slow.
For example the 2008-2009 estimated cost for a full-time student at CMU will be a cool $110K where$72K is tuition. One must wonder how much is the real cost for CMU to teach these students. Given the fact that many of the newly admitted full-time student there each received a $18K,$24K for a so-called "merit scholarship", it's hard not to question if these students overpay in the first place.

So in this context, you can see MFE is a very profitable business, specially those run by business schools like CMU, UCB, UCLA, Fordham. You have to charge high fee to give the illusion of prestige. The higher you charge, the more people want to jump in.

#### Andy Nguyen

Latest press release from UCB (March 31, 2008)
Haas School: NewsWire - March 31, 2008

The Haas School's Master's in Financial Engineering Program welcomed 65 new students this month and bade farewell to the 64 graduates of the class of 2008.

The graduates have received job offers from companies such as Goldman Sachs, Merrill Lynch, JP Morgan, Lehman Brothers, Barclays Global Investors, Shinsei Bank, and Standard & Poor's. Despite a tough market on Wall Street, 80% of the class had received job offers by their March 14 graduation, says Linda Kreitzman, executive director of the MFE Program. While final data won't be available until June 30, Kreitzman notes that percentage is on par with last year. Average compensation is currently at \$161,365.

All 64 members of the class of 2008 had winter internships, and some students will re-join the firms where they interned. Andrew Cowan, MFE 08, will return to the Special Situations Group at Goldman Sachs after working there over the program's 12-week winter break. "Only a handful of quants support a group of several hundred professionals," says Cowan, "so we get to try out many different things."

As the class of 2008 enters the workforce, 65 new students began their studies March 24 as the eighth MFE class. They bring a wealth of experience, including work as financial analysts for Bank of America, as operations research analysts for Verizon, and as engineers for Northrup Grumman Space Technology.

The MFE students hail from twenty countries and boast an average score in the 93rd percentile on the quantitative portion of the GRE and GMAT. One quarter of the new students hold Ph.D.s, and 34% hold master's degrees.

#### DominiConnor

Being extra critical, I'd call working at S&P a fate somewhere between an assistant circus clown and IT at JP Morgan.

The internship record is good.

#### Andy Nguyen

Being extra critical, I would say the internship was before the subprime mess and UCB can't afford to have anything less than 100% on both internship and job placement.

With all due respect to their great, great program, I'm not impressed that they have been able to do that. Just look at their selection of students. They pick those with great academic record and many years of relevant work experience. In short, those admitted are more market-ready.
In this sense, they don't have to work extra hard to put these high caliber profiles to work.

A student profile at UCB may read like this
Graduated from Ecole Paris with major in applied mathematics with a specialization in financial mathematics.
Received PhD in Applied Math from NYU
Worked 5 years on Goldman Sachs derivatives desk
It would be a shock if they have any problem placing students like this. Heck, even Hickvill State College can place a student with this profile as well.

I'm more impressed with some public college who may take in someone like me whose profile may read
Graduated with Math BS, MS from Swamwater College
No relevant experience in finance.
Never actually worked before.
Willing to work hard for money
It obviously has to work much, much harder to make me more job-ready.

So in this context, it's more impressive for a program like Baruch to be able to place its graduates year in, year out. All standard disclaimers applied here.

A high profile program like UCB, NYU, Columbia would naturally attract high quality applicants. The rest of the programs (Hickville included) would have to fight hard to retain top students.