Is an MS from the US worth the costs?

Let us assume the worst possible scenario is that you get admitted to a costly private university situated in a very expensive city and you don’t get any scholarships.

One university that matches these requirements is Stanford University. It is located in one of the most expensive real estate markets in the US. The average cost of renting a 2 bedroom apartment in the bay area is more than $2500. For comparison, in cities like Urbana-Champaign, Illinois for somewhere around $800–900, you can find a 2 bedroom apartment very close to the university.

To understand the cost involved in getting an MS degree in Computer Science from Stanford, we need to briefly look at its program structure. The tuition and course structure at most universities in the US is based around the number of units taken. For example, in order to get a Masters’ degree in Computer Science at Stanford, you need to complete 45 units of coursework, where each graduate course is worth 3–5 units.

Read the article on The American Education System | Gradvisors to know more about the graduate school program structures.

The academic year at Stanford is divided into 4 quarters. Students usually take internships in the summer quarter, so you only study for 3 quarters per year. The tuition fees that you pay is also dependent on how many units worth of courses you are taking each quarter. Here are the tuition costs for the year 2018–2019 at Stanford: Tuition and Fees, 2018-19.

Cost of an MS at Stanford:

• Tuition: For the worst case, let’s stay you take full two years to graduate ie. you only take 8 units each quarter, thereby taking 6 quarters to complete the minimum requirement of 45. The total tuition fees for you, in this case, would be $35,000/year so a total of $70,000.
• Living expenses: In expensive cities like the bay area, there are often more people than the number of bedrooms in an apartment. 3–4 people living in a 2 bedroom apartment is a fairly common scenario. But assuming the very worst, let us say you don’t find a 2 bedroom apartment that costs less than $3000/month and you want to live a lavish life so you only share the apartment with one other person. So your cost per month is $1500. In addition to that let us assume the monthly expenses to be $1000. Again, for most students, $500 is a good enough amount, but hey, we’re assuming the worst so why not! That comes out to a total of $2500 per month. For 2 years this would be $60,000.
• Health insurance: Health insurance is also a non-trivial expense for a student in the US but is often ignored in financial calculations. The insurance given by the university is generally costlier than other options. But some universities don’t allow their students to take any external insurance. The cost of coverage through the default option at Stanford is around $5000/year so for 2 years that would be another $10,000.

So, the total cost for 2 years at Stanford University comes out to be $140000. Assuming another $10000 for miscellaneous expenses, the total cost reaches $150,000

Expected salary after graduating from Stanford:

For context, read this (slightly dated) article about the Computer Science graduates from Stanford: What It’s Like to Graduate From Stanford and Get Fought Over by Tech Companies.

Let us assume that you get placed in one of the tech companies in the San Francisco Bay area, which would be the case for more than, I’d say, 65% of CS graduates in the US. The starting base salaries for CS graduates in the Bay area can range from $100,000 to $130,000. For our worst-case analysis, let us assume you get a starting base pay of $100k. Apart from the base pay, companies also give stocks that vest over a period of 4 years. These stocks can be anywhere from $50k to going up to $150k or even $200k for some companies. Again for worst-case, let us say you get a stock bonus of $50k vesting over a period of 4 years, which amounts to annual stocks worth $12.5k. The final part of the packet is the joining bonus. This can be anywhere from $10k-$25k. So we can assume you get a joining bonus of $10k.

Your annual gross pay would then turn out to be $122.5k. Although your actual tax while you are on an F-1 visa would be somewhere around 30%, let us assume you give a flat 40% of your pay in taxes. This results in a net annual pay of $73.5k. For the simplicity of calculation, let us say you get a net annual pay of $72k i.e. net monthly pay of $6000.

We already calculated a monthly expense of $2500 for living a comfortable life in the Bay area. While in reality because you have a huge debt to pay back, you’d actually try to save some money, but for the worst-case let’s assume that now that you’ve started earning you want to spend more. So you end up spending $3000 monthly. You still have a monthly saving of $3000. This means that even with all this extravagance, you’d be able to cover all the costs for your grad school in 4 years in the worst case.

Conclusion

For this analysis, we assumed that you study in one of the most expensive colleges in the country while living in the most expensive cities in the country. Further, you don’t get any kind of assistantships (TA/RA etc, which is a bit difficult to get but most students end up getting something or the other) and that you don’t save up anything from your internship (most students save enough from their internships to be able to pay the tuition for their last semester). Finally, when you graduate, we assume the salaries in the very low end of the spectrum, while still keeping your expenses really high. Even then, you were able to cover your costs in 4 years. Most students are generally able to cover their costs in 2 years, while still living a non-frugal life.

Also, note that this is based on the salaries of Computer Science graduates. Companies in other sectors may not be as welcoming of foreign students, or may not be as generous with their salaries. Students in those areas may be able to give you a first-hand account of their conditions. I’d suggest you reach out to your seniors on Linkedin etc. if you are from a non-CS related field to get more in-depth analysis of expenses and salaries.

Generally, I’d say it is a good investment, both professionally as well as financially to get a Masters’ degree from a good university in the US. If you’re worried about not being able to finance your grad degree, check out our article on Funding options for your graduate degree | Grad School Advice – MS/PhD | Gradvisors