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by SS at 7:45 am on Saturday 26th April

As a data collection (and, often, analysis) nerd, I've collected reasonably accurate data on the cost of the whole process of applying to and attending graduate school. Please don't take any of the below as a recommendation for what to do - it is merely an attempt to rationalise and explain my decision from a PURELY FINANCIAL point of view for others who may be considering a similar career move. Note that my motivation was not solely financial and yours probably shouldn't be - if you don't want to be completely miserable for a year or more! The numbers below are all deliberately imprecise - so make your own calculations if you need to. Note also that these figures are for software engineering jobs!

Let's start off with my salary in London before I started my Master's degree. My last position, at Last.fm, paid £37,000 a year. At Last.fm (a subsidiary of CBS Corporation), there was no salary progression and no bonus because they like employees to be dissatisfied with both leadership and their compensation ;-).

I lived with my parents and commuted into work - this meant my monthly disposable income, after taxes, healthcare, commute, food and student loan repayment costs was approximately £1,000. (Note that if I had been living in London and paying rent, my disposable income would have been considerably closer to 0. Also note that if I didn't have so much stuff wrong with me, I would have saved a fair chunk on healthcare.) For two years this money went straight into savings which I have since depleted to pay for tuition.

The overall year cost of the degree was approximately $70,000. Less if you live frugally, more if you don't. I managed to save money on the estimated graduate student budget provided by the university which is excessive if you know how to cook a little and don't eat out all the time. (Prepare your own caffeine too - coffee shops are expensive and you WILL develop a coffee habit as a graduate student here!)

My burn rate here is approximately $2,000 a month - including rent at $800 a month, food, travel and a modest amount of social. I expect that as I start to have free time when starting to work, I'll be spending more a month - closer to $2,500 a month.

Typical salaries for new software engineers with a Master's degree in the Bay Area range between $100K and $125K, depending on your level of experience and the location. Factor in the cost of owning a car if you live in the South Bay, as well as higher rents. If you work in San Francisco, you can quite easily commute in from Berkeley and pay the same rent. If you wish to move to San Francisco though, expect to pay at least $2K a month in rent. Rents in the South Bay (i.e. Silicon Valley) are about $1500. Rent inflation is high though, so I'd advise checking the market rate closer to when you make your decision.

(A side note: Amazon's offer was comparable for the first year - they offer a $90K base salary with a $20K bonus. This is amusing because the immediate cash bonus is a huge incentive for hapless graduates to sign. While rent and tax is lower in Seattle than California, I feel that pegging your base salary at $20K lower than employers in this area is likely to have repercussions in the future if you do choose to move.)

(Another side note: I'm beginning to wonder if international students/hires are offered lower starting salaries than applicants with permanent residency (i.e. a green card) or citizenship. I have very little data to confirm this but it's a growing hunch.)

Assuming the worst case, which is a $100K starting salary and living in San Francisco and approximating tax to 40%, this works out to a rough monthly income of $5,000. Assuming $1,500 worth of living expenses plus $2,000 in rent, this leaves a disposable income of $1,500 a month. This is considerably better than the situation in London where disposable income was close to 0 when renting your own accommodation. However, there's the obvious $70K that has been spent. Assuming no interest rate, a constant income, constant expenses and a diligent saving regime, this will take 46.6 months, or about 4 years to pay off.

Taking the best case, which is a $125K starting salary and commuting in, that gives us a rough monthly income of $6,250. Expenses, as previously mentioned, of about $2,500 - which leaves a disposable income of $3,750. Again, under the same assumptions, we should be able to pay off the $70K in 18.6 months, or about a year and a half.

This figures are based on the assumption that you'll be attending a year long program and do not get any sort of financial aid. I appreciate that many Master's courses are longer - but the actual increase in cost isn't directly proportional to the length of the program since students often get well paid summer internships which offset the extra semester or quarter well. In addition, there's opportunity in courses greater than a year long to get research or teaching assistantships which offset the tuition cost significantly.

Finally, the obvious question is - why not apply for a job in the US directly and save yourself the $70K cost? The answer is: access to employers. The obvious geographic advantage of being able to interview with employers aside, the immigration situation is notoriously tight and, as a non-US citizen, getting work authorization is difficult. As a Master's student, you have the ability to work legally here for a year post-graduation under 'Optional Practical Training'. If you study a STEM subject, there is an optional 17 month extension which helps too. During this period, students can apply for a H1B visa under a separate category reserved for applicants with a Master's or higher level degree from a US university. (They may also apply under the normal category, I hear that it is variable whether this category is over or undersubscribed relative to the normal category.)

I firmly believe that moving to this area has been one of the best things I can do for my career, earning potential aside. Just about every large technology company in the world has an office or their headquarters within 60 miles of where I live. This element of choice means that I can acquire work experience in highly attractive technologies and don't need to compromise on employer. (This compromise happens all too often in London for computer science graduates who have to make the trade off between a high salary in financial services or interesting work in a pure technology company. Here, I think it's possible to have both.)

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