Personal Investment Bachelors Degree vs Masters Degree Team

Personal Investment Bachelor’s Degree vs. Master’s Degree Team 4 Aaron Komagome-Towne: Researcher Jannet Loera-Gutierrez: Data organizer Kaylen Malley : Leader EGR 403 H –Asset Allocation in Technical Decision Making

Scenarios A 23 -year old civil engineering student is about to graduate. He is debating to specialize in the transportation engineering field. In addition, to working full time, he has three options to choose from: 1. 2. 3. Obtain only a Bachelor’s degree from Cal Poly Pomona, or Continue for a Master’s degree in transportation also from Cal Poly Pomona, or Continue for a Master’s degree in transportation from USC

Considerations Cost of education expenses Loans Salary Raises Inflation ROR

Assumptions Bachelor’s degree was paid off (financial aid and parents) One loan is needed for USC and none for Cal Poly since education expenses will be paid with the working salary Unsubsidized Federal Stafford Loan ▪ 6. 8% interest rate Time to pay the loan will be 10 years Living costs are consistent between scenarios Only adjusted for inflation (3%)

Comparison: Education costs Master’s Degree CPP Degree USC Years 2 years Total $16, 962. 00 $79, 100. 00 Includes: Tuition, books and supplies, transportation, and parking costs

Comparison: Salary Bachelor’s Master’s Degree CPP Degree USC Starting Salary $51, 256 $56, 023 Time horizon: 42 years after obtaining Bachelor’s Degree

Basic Plan Bachelor’s 3% raise, Master’s raise 4% $ 8, 000 $ 7, 000 $ 6, 000 FV $ 5, 000 FV Bachelor's $ 4, 000 FV Public Master's FV Private Master's $ 3, 000 $ 2, 000 $ 1, 000 $1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Years Bachelor’s vs. Public Master’s: 12 years Bachelor’s vs. Private master’s: 32 years Public vs. Private: never

Sensitivity Analysis: Salary Private Master’s: $10, 000 more than Public Master’s $ 10, 000. 00 $ 9, 000. 00 $ 8, 000. 00 $ 7, 000. 00 FV Bachelor's FV $ 6, 000. 00 $ 5, 000. 00 FV Public Master's FV Private Master's $ 4, 000. 00 $ 3, 000. 00 $ 2, 000. 00 $ 1, 000. 00 $1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Years BS vs. Public MS: 12 years BS vs. Private MS: 11 years Public MS vs. Private MS: 11 years

Sensitivity Analysis: Salary FV Private Master’s: $5, 000 more than Public Master’s $ 9, 000. 00 $ 8, 000. 00 $ 7, 000. 00 $ 6, 000. 00 $ 5, 000. 00 $ 4, 000. 00 $ 3, 000. 00 $ 2, 000. 00 $ 1, 000. 00 $- FV Bachelor's FV Public Master's FV Private Master's 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Years BS vs. Public MS: 12 years BS vs. Private MS: 17 years Public MS vs. Private MS: 21 years

Sensitivity Analysis: Percent Raise FV Bachelor's = 3. 5% Raise, Public Master's = 4%, Private Master's = 4. 5% $ 10, 000. 00 $ 9, 000. 00 $ 8, 000. 00 $ 7, 000. 00 $ 6, 000. 00 $ 5, 000. 00 $ 4, 000. 00 $ 3, 000. 00 $ 2, 000. 00 $ 1, 000. 00 $- FV Bachelor's FV Public Master's FV Private Master's 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Years BS vs. Public MS: 12 years BS vs. Private MS: 19 years Public MS vs. Private MS: 22 years

Results Based on the Future Value, it is more logical to obtain a Master’s Degree in Transportation Engineering from a public school like Cal Poly Pomona.

Resources Bureau of Labor Statistics (http: //www. bls. gov) Civil Engineer Salary Info (http: //www. payscale. com/research/US/Job=Civil_Engineer/Salary/by_Degree) Cal Poly Pomona Tuition Costs (http: //dsa. csupomona. edu/financial_aid/costs_even. asp) USC Tuition Costs (http: //www. usc. edu/admission/fa/applying_receiving/graduates/costs. html) MSCE Program -Transportation Engineering Emphasis (http: //www. csupomona. edu/~ce/MSCE/transportation. html) Cost of Living Information (http: //www. leavingthefolks. com/cost. php)