• C++ Programming for Financial Engineering
    Highly recommended by thousands of MFE students. Covers essential C++ topics with applications to financial engineering. Learn more Join!
    Python for Finance with Intro to Data Science
    Gain practical understanding of Python to read, understand, and write professional Python code for your first day on the job. Learn more Join!
    An Intuition-Based Options Primer for FE
    Ideal for entry level positions interviews and graduate studies, specializing in options trading arbitrage and options valuation models. Learn more Join!

Princeton MFin Princeton Cost of Attendance Analysis

GoIllini

Market Crises= Gray Hair
Joined
10/12/09
Messages
419
Points
53
Per Andy's suggestion, I've done some rough back-of-the-envelope calculations on the cost of attendance:

  • Tution and Fees: $40,500 2012-2013
    • Includes a weak student health insurance. If you have health issues, you may want to do a COBRA instead.
  • Disability insurance: (STRONGLY RECOMMENDED) $500/year for a $40K/year after-tax supplemental policy.
  • Basic Living expenses: $2200/month, $26400
    • Rent: $900/month if you share a roommate in on-campus apartments.
    • Food: $20/day= $610/month? (estimated from Jersey City)
    • Books: $1000/semester
    • Utilities: $50/month (not including cable and internet)
    • Beer and fun: $50/week= $220/month
    • Clothing: $300/semester
    • Travel allowance to visit family: $840/year
    • Add: 10% error margin
  • Optional Expenses:
    • Car: $4500/year (cash), $6500/year (cash plus depreciation and opportunity cost)
      • Insurance: $600/six months (Progressive.com quote on 2007 Mustang with $50K/100K coverage and $1000 comprehensive/collision deductibles.)
      • Maintenance: $600/year
      • Registration and inspections: $90/year
      • Parking: might be included for graduate students living on campus.
      • Gasoline @ 24 mpg, 600 miles per month: $90/month
      • Non-cash depreciation (straightline assuming a 5-year vehicle life on a Ford Mustang): $1600/year
      • Non-cash foregone investment opportunity at 5%/year inflation-adjusted: $400/year
A few notes on potential tax savings:
  • You can withdraw from your IRA penalty-free prior to age 59.5 to pay for tuition under the education exception. The IRS also allows penalty-free IRA withdrawals to cover room and board, up to Princeton's cost of attendance estimate (tuition plus ~$18K last year)
  • In addition, if you plan on returning to work in one year and the degree does not "qualify you for a new degree or business", you can also take a business tax deduction on the majority of the tuition expenses. I would assume that if you already work for a bank, hedge fund, or other finance-related company in a position that relies somewhat on your financial knowledge, you would be allowed to take this deduction if you are doing the one year program. Business tax deductions are subject to a 2% of AGI floor. For instance, if you plan on earning $50K this year and withdrawing $40.5K from your 401k to pay for school, you can only deduct $40.5K-2%*(40.5K+50K)=38,690 for the $40,500 tuition payment. You also have to forgo a standard deduction, but for most purposes, the vast majority of your tuition payment is deductible.
  • For a two-year admit, it is still generally tax advantageous to withdraw from a pre-tax IRA during the year 2013. Assuming $15K of income in 2013 from an internship, you have an additional $27K worth of withdrawals that would occur in the 15% tax bracket, producing a tax savings of $3500 over contributions in the 28% tax bracket prior to the Lifetime Learning Credit. Again, these withdrawals appear to occur penalty-free up to Princeton's cost of attendance estimate.
 
Back
Top