MIT MFin Oversubscribed, MIT MFin offers admitted students $8K to defer

[Andy Nguyen]

MIT today sent out an email to its incoming class that they planned to have a class of 70 this year but are expecting a class of 80 due to over-subscription.
To avoid this problem, MIT is offering $8K to the first 10 students who want to defer their admission until next year.

The program's size has grown greatly over the year. From the first class of 23 students, it has 58 students in the current class which will graduate this summer. It remains to be seen if MIT can buy out enough students to keep its incoming class to 70.

Next year, they plan to admit 2 cohorts of 50 each for class of 2013.

If you follow Quantnet's coverage of the MIT MFin program, you would not be surprised. The university has indicated that it is studying ways to expand the program.

See an article last year http://www.quantnet.com/robert-merton-rejoins-mit-to-teach-quantitative-finance/

 

[Anthony DeAngelis]

Wow, that is an ambitious goal. With MIT churning out this many MSF'er I wonder how long before other top brand schools decide to start up programs. If you use MBA finance classes to fulfill MSF requirements, it is basically a pure profit play.

 

[Andy Nguyen]

Estimating yield is very difficult for a new program and it looks like MIT admission office got the yield curve wrong this year

 

[Entropic]

With an estimated 'all-in-cost' of over $100k for a year that's a significant investment for any student. Given that MIT can afford to pay students $8k a year to defer the profit margin must be rather healthy on the near $75k tuition fee.

http://mitsloan.mit.edu/academic/mfin/tuition.php

 

[vashok]

10 students at 8K each leads to a loss of 80K~ basically giving out one full scholarship. It would be hard to imagine students deferring their admission without set jobs/ other commitments for a year

 

[Anthony DeAngelis]

Anyone spending 100K for an MSF can probably do other things for that year. An MSF is a great degree, but most people use it to break into a higher trajectory career. I would take the 8K, work a semi relevant job for a year, bank cash and do the MSF with a better financial position.

Personally, I don't understand why NYU isn't offering an MSF degree. They could piggy back off their MBA finance classes (which are really good) and get 50 kids at 50K or more per student. Nice $2.5MM in their pocket without much additional cost.

 

[SYau]

If I was in the position, I wouldn't defer for 8k. Time is money, and you can make more than 8k a year by graduating earlier.

 

[Anthony DeAngelis]

Or you could have your accepted turned into a denied and not have MIT or the money.

This is also assuming you land a high paying job, which according to their placement stats they just released, is not 100% guaranteed. I mean an MSF is not necessary to work in finance. I am sure everyone looking at an MSF from MIT thought they would have a high paying job when they finished undergrad and that didn't pan out as planned.

 

[enthusiast]

Someone who got admitted to MIT and CMU or NYU (for example) could take the 8k and run!

 

[AlexandreH]

Someone who got admitted to MIT and CMU or NYU (for example) could take the 8k and run!

I don't think you will get 8K cash. You will get a discount next year. I assume people at MIT are smart about that!!!

 

[enthusiast]

I don't think you will get 8K cash. You will get a discount next year. I assume people at MIT are smart about that!!!

Damn!

 

[Andy Nguyen]

Of course, it's not upfront $8K cash, they call it "scholarship" which will be deducted in your tuition bill next year. The deadline for acceptance for this year incoming class was March 15 so their announcement yesterday caught many students off-guard and too late.

 

[roastduck]

8k is not gonna help much as compared to the tuition & living expense and that doesn't take into account the 1yr opportunity cost....

 

[Andy Nguyen]

One big unknown variable is how the program is structured next year. MIT plans to have a class size of 100 next year, split into 2 cohorts of 50 each. If you defer this year, you may run into organizational/logistical problems in term of courses selection, scheduling, internship, etc.
MIT has not disclosed much info about its plan to this year incoming class so many people don't have much info to decide. And a common theme is that the 8K offering is too little, too late.

 

[Entropic]

It's amazing that one of the most prestigious academic institutions to offer a Masters in Finance can't seem to handle basic arithmetic. If you only have 70 places, don't offer make an offer to 80 students...

 

[iniesta]

It's amazing that one of the most prestigious academic institutions to offer a Masters in Finance can't seem to handle basic arithmetic. If you only have 70 places, don't offer make an offer to 80 students...

lol you serious?

 

[Andy Nguyen]

It's amazing that one of the most prestigious academic institutions to offer a Masters in Finance can't seem to handle basic arithmetic. If you only have 70 places, don't offer make an offer to 80 students...

You probably missed my #3 post in this thread.
This is all about estimating yield rate, a game that every university admission offices do every year, from MIT, Harvard to Smithville College.
Admission/directors have a class size number in mind for each incoming cohort. Now they have to see how many admits they give out to achieve that size. They use many data but historical yield rate is probably the most important input. The yield rate is the percentage of admitted students who enroll in the program. Yield rate at top Ivy League undergraduate is 60-70%.

The trademark of a top notch master program is a very low acceptance rate (low single digit) and very high yield rate (80+%)

Take a look at this table and you can calculate those numbers yourself.
http://www.quantnet.com/mfe-admission-numbers/

So from this data, MIT MFin has a 75% yield on its first year and 64% on the second year.

This year, MIT gave out 112 admits. They may have used a 65%-70% estimated yield which would ideally result in a 73-78 pool and with a few deferral each year, they would achieve their goal of a class size of 70 students.

However, this year there are around 84 acceptances. That is an exact 75% yield, more than they have estimated.

So the only way to reduce this size is to give out something to entice some people to defer, hence the $8K discount to the price tag.

By the way, everyone has to give a deposit of $3K and they will give back $1,500 if people notify MIT that they are not coming.
"Should you change your mind, we will refund $1,500 of your deposit if you notify us of your decision not to matriculate at MIT by June 1, 2011"

I have no idea what they will do with the $1,500 penalty fee for those who paid and not coming.

 

[iniesta]

You probably missed my #3 post in this thread.
By the way, everyone has to give a deposit of $3K and they will give back $1,500 if people notify MIT that they are not coming.
Should you change your mind, we will refund $1,500 of your deposit if you notify us of your decision not to matriculate at MIT by June 1, 2011

Nobody in their right mind would take up that offer

 

[Andy Nguyen]

Nobody in their right mind would take up that offer

I have seen very strange things when it comes to MFE programs and how people construct their logic.

 

[Entropic]

You probably missed my #3 post in this thread.
This is all about estimating yield rate, a game that every university admission offices do every year, from MIT, Harvard to Smithville College.

Andy, I don't think British sarcasm carries very well over the internet. Apologies, it wasn't supposed to be serious commentary.

However, I do postulate that there would be more MSc student applications recently as the job market has been difficult for undergraduates. Several of my classmates at Cass Business School were graduates who didn't manage to get onto a training program.