Energy Career Advice: Graduate School Loans are the Worst

on July 01, 2014 at 11:00 AM

Vocational School Prepares Students For Job Market

Graduate school loans are the worst.

THE. WORST.

I am over halfway through paying down my $120,000 balance ($85,000 for an MBA, and $35,000 for a Master’s in Petroleum Engineering), and every two weeks the $500 bill I deliver to my creditors feels like a swift, targeted kick to my nether regions.

That being said, painful as it is now, I have already seen some returns on this investment, and I am sure I will see even more returns in the future. This is not by chance: I made some very deliberate choices that lessen the present impact of those loans and greatly increase my ability to maximize the future returns.

Choose the Right Degree(s), from the Right School(s)

There’s no way to be diplomatic about this: some degrees will make it far easier for you to land a high-paying job than others. If you want to ensure that you can make the student loan payments as well as secure regular pay increases, you must be smart in what you choose to study.

As readers of an energy website, it shouldn’t surprise you that at the undergraduate level, I suggest you study the “traditional” engineering disciplines, such as mechanical, electrical, and chemical. I would be wary of studying petroleum engineering as an undergraduate: it pays greatly in “good” times for the industry such as now, but it does limit your options if things move towards a downturn.

My advice: get a less focused engineering degree as an undergraduate, position yourself for internships with oil & gas companies so that you can secure a job with one after you graduate, and go back for a graduate degree in petroleum engineering if you feel that you want to formally deepen your knowledge in that discipline.

An MBA can also be hugely beneficial to a career in energy, especially for those who did in fact pursue engineering at the university level. Personally, I found the time I spent pursuing my MBA as highly formative, as it really helped round-out my skillset.

Beyond just choosing a degree, depending on what course of study you pursue, the school you attend can be just as important. With regard specifically to the MBA, the higher ranked the school, the better. Furthermore, to the extent that the network you acquire is arguably more important than the degree itself, make sure that the school you pick is a good “feeder” of professionals into the industry you wish to join.

I have found that for an engineering degree, the school you earn it from is not as important: an engineering degree is tough wherever you earn it from. Two caveats though: make sure the degree is properly accredited and recognized, and if oil & gas is your ultimate goal, check that the school has a good history of sending students into the industry, as well as a healthy number of companies recruiting on-campus.

Consider Keeping Your Job While You Study

I have earned two Master’s degrees from top schools, both while working full time, and I firmly believe this: unless you’re doing something that requires a lot of laboratory time (like medicine), at the graduate level there are very few cases where you should NOT choose to work while you pursue your degree.

Sure, it’s a rough ride having to juggle so many things at once, but the upsides are considerable:

 

  • Consider that you won’t be removing yourself from the professional environment, so you can continue to build your professional network as well as gain more valuable on-the-job experience. In fact, going to school while working creates a “positive feedback loop”, whereby you can immediately apply what you learn in the classroom at work, and vice versa.
  • You of course get to keep your salary, which is an enormous advantage over those who pursue education full time and must take out loans not only for tuition, but also for living expenses. Back to my example, I may have spent $120,000 on graduate education, but I was able to pay off the Master’s of Engineering while I was doing the courses (so no additional debt!) and I kept accumulating pay raises while I was doing my MBA and right after. I hope to have paid off my remaining debt (again, my total expenditure on tuition was $120,000…) by the end of 2014, not even 4 years after I graduated with my first Master’s degree. Not bad considering after that it is all “gravy” for me!
  • Some companies (those in the energy industry are particularly generous about this) will actually pay some (or all!) of your tuition if you continue working full time for them while you study. Many of them require that you stay on with them for a few years after graduation, but this is still an absolutely fantastic deal. If you’re considering studying while working, make sure you inquire with your company well before hand about whether or not your desired subject is covered by their tuition policy, and what you must do to qualify for that aid. I participated in such a program with my company when I was earning my Master’s in Petroleum Engineering, and I am still grateful they were so supportive financially.

Be Proactive in Using and Publicizing Your Achievement

Sorry to burst your bubble, but if you do choose to study while working, it’s not guaranteed that the day after you graduate, your current employer will say: “Congratulations! And by the way here is a 30% pay raise for all your troubles…”

Unfortunately, the way many employers see it, if you made $x before you graduated and you continue to show up, then you are still OK with making $x (the incentive to give you a raise is even less if they have helped you with tuition!).

It is up to you to utilize what you’re learning WHILE YOU ARE STILL IN SCHOOL. This will show everyone you work with that your capabilities have increased (just remember, don’t brag, show). Thankfully, my company was highly supportive, I proved that my capabilities (and thus my market value) did in fact increase as a result of further studies, and they made it very much worth my while.

However, not all companies are this generous, so I would also highly recommend looking at other employment opportunities, where you could start right after you graduate. Maybe you love where you work, but you have to be realistic about this: if you want a significant return on your investment and you have studied an “in-demand” subject, you are likely to get the biggest salary jump if you look elsewhere.

Remember, many of these degrees require immediate action for you to capitalize on them: it is very different to ask for a job as an MBA graduate right after you receive the diploma than it is 20 years from now, when the diploma won’t matter nearly as much as what you’ve done since then (though remember, if you work backwards that “since then” could come from a door opened by that degree, so make sure you capitalize on it early!).

Some Final Thoughts

Education loans should be treated as an investment, and just like any other investment (houses, stocks, etc), the outcomes can be favorable – or not – depending on how much thought you put into where and how you place your money.

Make the right choices, work hard, and sooner than you think, those outgoing loan payments will turn into large paychecks in the bank!

David Vaucher is a director with IHS, overseeing the Upstream Operating Costs Forum. He is also the editor-in-chief of “The Way Ahead” magazine, the Society of Petroleum Engineers’ official publication for young professionals in the oil and gas industry.