This book is for informational purposes only. Except when an external source is cited, everything in the book is the author’s opinion. The author makes no guarantee about the correctness or accuracy of any content in this book. Furthermore, you may disagree with and/or find certain content offensive.
Read at your own risk. Do not continue reading if you do not accept full responsibility for all actions you take as a result of reading this book. The author is not liable for any damages including, but not limited to, academic failures, career path mistakes, financial loss, feeling upset, and physical/mental injury.
College is an expensive endeavour. Tuition costs tens of thousands of dollars. Food and housing cost thousands of dollars. Textbooks cost hundreds of dollars. Everyone has a different financial situation and for some people, money is a fourth dimension lurking in the background behind academics, mental health, and physical health.
The finance dimension is particularly tricky to navigate because most college students have never earned anything close to the sticker price of college. $1,000, $10,000 and $100,000 all seem like a lot and it’s easy to make suboptimal, short-sighted decisions over small amounts of money that are insignificant in the long run. In this section, we’ll discuss how to navigate finances in college without losing sight of the big picture.
For most people, especially those studying computer science for the career prospects, college is an investment: you pay a lot of money to attend college with the expectation that you’ll earn a lot more money using the knowledge you picked up during college. When you study computer science, you are looking at a six figure salary after graduating college. Your earnings after college will pay back college expenses quickly, provided you do well in the major and get a solid job. Thus, don’t penny-pinch your way through college. Here’s my general recommendation: spend enough money to comfortably focus on learning and finishing your degree.
If you don’t have the cash on hand to pay for college, then you have a few options available: scholarships, loans, work-study grants, attending a cheaper institution, negotiating, and graduating faster. We’ll discuss all of these options next without losing track of the big picture.
Grants and scholarships are essentially free money: you receive money for college and don’t have to pay it back. Many universities provide need-based grants based on your financial need, so make sure you fill out the FAFSA form to be considered. Many institutions also offer merit-based scholarships so research how to be considered. For most merit-based scholarships, you often have to write an essay. Essay writing is out of scope for this book, but remember Harold’s essay example from chapter 7; don’t lose track of the transaction at play between you and the scholarship committee. You have a lot of free time when school isn’t in session so put in the effort to write your scholarship essays during school vacations. There’s nothing to lose and a ton of money to gain. Grants and scholarships are the ideal source for funding your college experience because there are no strings attached to the money.
Financial aid can also be awarded in the form of “work-study” grants. To get money from work-study, you have to apply for a work-study qualifying job at your university. The federal government pays part of your work-study salary and your university pays the rest. You earn close to minimum wage, deduct federal and state taxes, and the remaining amount goes towards your college expenses.
Avoid work-study because you are wasting time on a low-wage job to pay for college. As mentioned earlier, don’t penny-pinch your way through college because software engineering salaries are high. Suppose you earn $15/hour through your work-study job and work 9 hours a week, 30 weeks a year, for four years of college. That’s a pre-tax total of $16,200 from 1,080 hours of work study. If you take a full-time software engineering job salaried at $100,000 a year, or $50/hour, then you’ll earn four years of work-study in around two months. Even with higher tax rates considered, you’ll earn back four years of work study in just months of full-time work. Your work-study hours are better dedicated to your academics and improving your chances of a higher starting salary after graduation.
If you do participate in work-study, find jobs where you can study while you work. This could be supervising a computer lab, or working at a library helpdesk. People rarely bother you and you can do homework and receive work-study pay at the same time. Avoid manual labor, research, and private tutoring because you’ll be working the entire time. Given your earning potential after college with a software job, low-wage work-study jobs are not a great way to spend your valuable college time when you still have to balance your academics, mental health, and physical health.
If grants and scholarships aren’t enough, you can and should take out loans to fund your college experience. The US government offers federal loans at reasonable rates. You pay a 1% fee up front and then a low interest rate around the rate of a home mortgage. Furthermore, your interest does not accrue until after you leave school. It makes sense to take out federal loans to study computer science because you’ll be earning a lot more than the loan amount in a software job and can pay everything back in a few years. Your computer science education is an appreciating asset and taking out a loan to acquire the education is sensible.
There is a maximum on federal loans though and you will need to look for private loans to cover any remaining balance. Private loans are worse than federal loans because the interest rates are higher. There are two types of private loans: subsidized and unsubsidized. For subsidized loans, the federal government pays your interest while you are in school. For unsubsidized loans, you are responsible for interest payments while in school. I discourage any form of private loans in addition to federal loans because at this extreme, you will owe a lot of money. If the federal loan limit isn’t enough to cover your college tuition, then you likely have better alternatives attending a cheaper institution.
You may end up considering whether or not to attend an elite private institution that does not fulfill all your financial needs. Perhaps your parents earn enough to disqualify you from financial aid, but they refuse to pay for your tuition. Or perhaps the institution only offers you aid in the form of loans.
As an alternative, many in-state universities offer a decent computer science curriculum at an affordable price. In-state tuition is a small fraction of private university tuition. Furthermore, if you still demonstrate financial need, an in-state university should meet it because you are a state resident and your parents paid taxes that funded the institution. Always consider attending an in-state university due to the affordability.
You don’t lose much career upside by attending an in-state university. College pedigree has little to no impact on your career upside. Getting a well-paying job solely comes down to getting technical interviews and passing them. The best in-state university in your state will have a decent computer science program that provides you all the knowledge and instruction needed to pass even the toughest technical interviews for college graduates. Your success is determined by you: whether or not you take full advantage of what your university offers you.
The primary drawback attending an in-state university versus an elite private institution is the student caliber. While in-state universities usually have to admit in-state applicants above a certain GPA or test score threshold, private institutions can admit holistically and only choose the strongest of the strong. Thus, your peers at a top private university are much stronger than peers at a top in-state university.
A private institution brings you a power-concentrated network that makes it easier to get certain opportunities, so you’ll have to decide whether the extra money is worth the network boost. If you study computer science at a cheaper in-state institution, graduating with an average software job that pays $80,000–$100,000 a year is an extremely reasonable outcome. Graduating with a top-tier software job that pays $180,000 a year is less likely, but not impossible. You’ll have the knowledge and skills to pass the technical interview, but need to build your network and meet people who can refer you for the technical interview. In an elite private institution, you pay more and your exceptional peers left and right will be in these top firms; in less-selective universities, you pay less but need to work harder to meet the right people for your network.
When weighing an expensive institution versus a cheaper institution, consider how much upside paying for the expensive option gets you. Some institutions publish career reports detailing where their graduates go and average starting salary. You can also search around on LinkedIn and see where people end up to gauge the quality of people at an institution. Then determine if you are willing to pay extra or take out extra loans for the networking benefits.
If you apply to cheaper institutions and get admitted, a less-known tactic is to negotiate your cost of tuition at more-expensive universities. Even if your request for more need-based financial aid is denied, a college will not rescind your admittance for trying to negotiate, so you have nothing to lose. When you have financial aid awards from multiple universities, use one to leverage another. In particular, if you can attend your flagship in-state university for cheap, but really want to attend a private institution that didn’t give you much aid, explain your dilemma to them. Show how badly you want to attend the more-expensive university, and why the financial strain is too much. Emphasize your merits, highlight your potential, and ask them if they can match the cheaper institution’s cost of attendance. Believe it or not, negotiating can work: everything is negotiable, it never hurts to ask, and your tuition is just a drop in the bucket for a college.
While the earlier methods focused on acquiring more money, you can also reduce your costs by graduating sooner. You graduate sooner by cramming more classes into each semester or by transferring credits. I don’t recommend cramming more classes because you’ll get overloaded with coursework, fail to retain important concepts, damage your GPA, and hurt your job prospects and life in general. Instead, consider transferring credits for all your useless, non-CS courses.
Transferring credits for non-CS courses is much easier than taking the equivalent course in college. High school AP exams are a great way to get out of silly degree requirements. Most computer science programs require students to take the following classes, which you can meet by scoring well on an AP Exam:
Plan ahead and take the appropriate AP classes in high school. Or buy a few prep books and spend a few months self-studying for the AP exams. Paying $95 per AP exam is a steal versus paying thousands of dollars of tuition for courses that you never use in your computer science career.
You can also pay a few hundred dollars and spend school vacations taking courses at a community college, where courses are cheap and academic rigor is lower. Just be sure to confirm with your college that each community college course you take can be transferred. A word of caution: never transfer credits to get out of computer science coursework. The AP CS exam and local community college courses are too shallow and do not prepare you adequately for your future computer science career. AP and community college credits help you sidestep useless degree requirements that build up tuition costs; transferring credits in non-CS courses can save you up to a year of college tuition, all without impacting your software career prospects.
Beyond your massive tuition costs, you also have daily spending to worry about: housing, food and general entertainment. Should you live on or off campus? Should you maintain a car? Should you order takeout? Should you buy tickets to see a local show with friends?
Once again, don’t penny-pinch your way through college. Spending or borrowing even a few thousand dollars more to make your college life more comfortable is negligible if you earn a six figure salary as a software engineer after graduating. Don’t strain your academics, mental health, or physical health for four years just to save enough money you’ll earn back in a few months after graduating. The following are some common pitfalls:
Some people cook their own food to save money in college. This involves lugging groceries back from the grocery store, cooking meals yourself, and cleaning up after eating. Unless you enjoy cooking, hate eating your school’s food, or are allergic to everything in the school dining hall, it’s more effective to purchase a meal plan.
Think of cooking as earning money from a job: you trade your time to save the money for an unlimited meal plan. Do the math for your specific situation. In typical scenario, an unlimited meal plan averages around $10 per meal or $210 a week if you eat at the dining hall three times every day. If you cook every meal, then every week, you’ll probably spend $50 on groceries, three hours on grocery trips and average thirty minutes cooking and cleaning up per meal. Working 13-14 hours to save $160 yields $12/hour, or around $14/hour pre-tax. Not only will you eat better in the dining hall, but you’re better off devoting the time you save to academics and or even a part-time job that pays better.
Some people live away from campus to save money because the closer you get to the college, the more expensive housing gets. For example, if you save $200/month living away, but increase your commute by 30 minutes for 30 days a month, then you’re trading 15 hours of your time to save $200, which equates to $13/hour. Furthermore, you’ll miss out on social and networking events by being so far away. Compared to your earning power after graduation and given the strain it puts on your social opportunities, living far away is usually not worth the savings.
Some people skip social opportunities to save money. For example, they decide not to join their friends at a $25 comedy show because it is too expensive. Again, compared to your earning power after graduation, $25 is negligible. Don’t be afraid to spend money to have some fun.
In college, it is reasonable to splurge to make your life easier when juggling your academics, mental health, and physical health. You are only maintaining that lifestyle for four years to help you focus on your education and improve your job prospects after college. Paying for a meal plan or paying higher rent to live closer to campus are all reasonable expenses because you gain more time to focus on academics. Spending a few dollars now and then to have some fun with friends is also reasonable because socializing is important for your mental health.
On the other hand, do not splurge on excessive things that don’t greatly benefit your academics, mental health, and physical health. For example, do not spend $80,000 on a luxury car or $1,000 on illegal drugs because they make you feel good. None of these are requirements for your academics, mental health, or physical health.
Unfortunately, difficult family finances may impact your college financing. While some people can easily forgo saving $13/hour to purchase a meal plan, $13 can go a long way for other people. If money is extremely tight, definitely apply for financial aid. Most institutions should provide you grants that do not need to be repaid and cover both tuition and room and board. If you do not get the aid that you need, you can appeal your financial aid award and describe your extenuating circumstances.
If your family depends on your income as well, consider attending college part-time, or seeing if there’s any way they can get by until after you graduate. At the end of the day, talk things through with everyone involved: highlight the upsides of getting a well-paying software job if you can just get through four years of college. See if there’s any way to temporarily work around the financial situation.
College is an expensive investment. You may be investing tens or hundreds of thousands of dollars to learn the skills for a higher paying job. By studying computer science, you unlock a career path to millions of dollars of lifetime income. Thus, when it comes to financing your education, try not to penny-pinch because a few thousand dollars you save in college end up negligible compared to the hundreds of thousands of dollars you earn from your software job after graduation. You’re already investing a lot of time and money in college, so don’t make a halfhearted effort and trade academic performance, mental health, or physical health to save a few dollars. Dedicate all the resources you can to college and to attain the best software job possible after graduation.