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How Finances During Grad School Affected This PhD’s Career Path

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In this episode, Emily interviews Dr. Scott Kennedy, a bioengineering PhD who now works at a start-up in a data science position. During the course of his PhD, Scott got married and had two children. While he hadn’t considered personal finance of great importance when he started grad school, he certainly did by the end. Scott considered pursuing a tenure-track faculty position, but ultimately took an industry position because the salary and location better supported his young family. This conversation around Scott’s reflection on his financial path during grad school is excellent food for thought for an early-career PhD considering different career and family formation options.

Links mentioned in episode

grad_student_family_career

0:00 Introduction

1:20 Please Introduce Yourself

Dr. Scott Kennedy has an undergraduate degree in Mechanical Engineering. He became interested in neuroscience of motor control and the neural basis of body movement. He went to the University of Pittsburgh and received a PhD in Bioengineering. His adviser was in the neuroscience department.

As Scott neared the end of graduate school, he began to explore options outside of academia that made use of his skillset. He took a job as a machine learning engineer at a startup in St. Louis, Missouri. He is enjoying the transition out of academia and into startup culture. Scott adds that you have to be creative about how your skills apply outside of academia, because graduate school training typically funnels you into academic careers.

6:25 Tell us about your family.

Scott got married in 2013, during his third year of graduate school. He says they knew they didn’t want to wait until after graduate school to start their family. They had two daughters while Scott was a PhD student. He says his adviser was supportive and he had examples of other parents in the lab.

8:40 What does your wife do? What was her job while you were in graduate school?

Scott says he met his wife in Pittsburgh when she was finishing her physical therapy degree. His wife started working as a pediatric physical therapist before they got married. Their combined income was enough for them to live comfortably. After they had children, Scott’s wife wanted to stay home but his graduate stipend was not enough money to support the family. His wife started working part time but they had to be very conscious about their finances.

10:11 When you started graduate school, what was your interest in personal finance?

Scott says he was fairly naive but he had interest. He says at the end of undergrad, he developed a spreadsheet to track his spending. Although he kept a budget, he didn’t have any financial goals. He wasn’t thinking about saving for retirement. He had some savings tucked away but for no reason. He was focused on simple living.

Emily shares that she was in a similar place when she was in graduate school. However, she had this sense of “doing the right thing” with her money and that motivated her to learn. Scott shares a story about his friend who was shocked that he didn’t have a Roth IRA yet. Scott thought investing was for people with money, then he learned that he should start during graduate school.

14:40 What was your transformation process into someone who cares about personal finance?

Scott says his first step was saving for retirement. Then, he wanted to purchase an engagement ring and pay for a wedding. He saw that his savings, his safety net, was being drained. He realized that he had to become more serious about budgeting and manage finances in partnership with his wife. He says personal finance is a balance between living your life, having goals, and having security. He adds that childcare was another big factor. Cost of childcare is about the same cost as rent.

17:27 What frugal strategies did you put in place to adjust to the new expenses?

Scott emphasizes that they leaned on their families a lot. They were fortunate to have families willing to support them and help them travel, but their vacations were to go home to see family. At home, they spent time at friends’ houses and chose very low cost entertainment options. They stopped going out to eat and would go for a run instead of having a gym memberships. Scott says that taking little steps adds up in savings in the long run.

20:34 How did finances during graduate school affect your career path?

Scott says two years before he graduated he thought carefully about what he wanted to do. Before he started graduate school, he thought he wanted to work in engineering and rehabilitation. He fell in love with science and could see himself being an academic and working as a professor. He felt like he wanted to go that route until he saw one of the graduate students from his lab defend, work as a postdoc, and apply to jobs while also having a family. He said there was a research faculty member in the lab as well who had a family and was having a hard time getting a faculty job. Scott says there were also stories of professors who got divorces during the tenure process.

Scott says he didn’t feel like he was able to support a family through a postdoc and a search for a faculty position. He says that even if everything worked out for him, his kids would have been in high school by the time he got tenure. He shares that this was difficult for him to comes to term with. After he realized this, he started to look for jobs outside of academia.

25:49 Are you happy in the startup job you have now?

Scott says he’s happy in his position now because he has freedom, flexibility, and autonomy in his work. He feels he works on interesting problems. He can work with leadership and have a more say in the work than you can as a graduate student. The location in St. Louis is closer to his family.

26:54 If you could go back and give yourself financial advice, what would that be?

Scott says he would tell himself to have goals in mind. He would tell himself to have an emergency fund and build it up. He says he would build savings for housing and consider buying a house to build equity. Scott says thinking ahead for childcare options, if at all possible, would have been a gamechanger for them.

Scott admits that as an early graduate student, it’s hard to know what your goals are. He advises that to the extent you can, think a couple years ahead. He says have saving goals and investment goals.

Emily advises that people at least consider buying a house if you’re in a place with a housing market that makes sense for graduate student budgets. She also says that it’s a reasonable assumption that anyone’s financial responsibilities will increase over time. Graduate school is a fairly long period of time and chances are that you will have more responsibilities.

32:17 Final Comments

Scott shares that he didn’t expect the number of weddings and the cost of going to them. He says that he regrets not being able to go to some weddings. Scott advises to find balance between living your life and having savings so that you can have buffers and cushions so you have money for unexpected expenses.

34:45 Conclusion

How the Promise of Public Service Loan Forgiveness Has Impacted This Prof’s Career and Family Decisions

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In this episode, Emily interviews Dr. Jill Hoffman, an assistant professor at a university in Portland, OR. Decisions around finances, family, and career are bound tightly together for Jill because of her family’s student loan debt. Jill and her husband Mike are aggressively paying down his student loans while counting on Public Service Loan Forgiveness for hers. Required minimum payments also factored into their decision for Mike to become a stay-at-home parent to their toddler after they moved for her tenure track position. Emily and Jill discuss the rationale behind these decisions and how Jill is documenting her life as an assistant professor and mother on her website, Toddler on the Tenure Track.

Links Mentioned in the Episode

PSLF Professor

Will You Please Introduce Yourself and Your Family’s Finances?

Jill is an assistant professor at a university in Portland, Oregon. She has a PhD and master’s in social work and a bachelor’s in psychology. She has a husband, Mike, and a daughter, Ellie, who is almost three years old. Mike is currently a stay-at-home dad, but his background is in counseling psychology (master’s). When they moved to Portland for her job, it made more financial sense for him to stay home with their daughter than to get a job due to the high cost of childcare and cost of living overall.

Jill and Mike both still have one loan each from their undergrad degrees (2.5%-ish interest). Jill’s loan balance is $8300, and M’s loan balance is $6800. The bulk of their student loan debt from their master’s degrees. Jill has $16,000 remaining on one loan and $38,000 on another loan, both at 7.0% interest. Mike has $5,900 remaining on one loan and $6,300 remaining on another loan, both at 6.5% interest. Their student loan balance totals just under $82,000 as of April 2019.

Their recent focus has been on paying Mike’s student loans. In December 2018 they re-evaluated their debt and had a balance of just over $100,000, and they used some savings and cash flow to pay down the debt to its current balance.

Why Are You Attacking Mike’s Debt and Paying the Minimums on Jill’s Debt?

They are paying the minimum payments on the 2.5% undergrad loans. They are low priority due to the low interest rate.

Jill is enrolled in Public Service Loan Forgiveness (PSLF). Theoretically, after 10 years in the program her master’s degree loans will be forgiven, so they are paying the minimum for now. They are crossing their fingers that it will work out. The minimum payment doesn’t cover even the accruing interest fully or pay down principal at all. (This is because Jill is enrolled in an income-driven repayment plan with a repayment period of greater than 25 years.)

They are paying the minimum on one of Mike’s loans and attacking the higher-interest loan with all extra money each month.

Jill’s undergrad loans do not qualify for PSLF because they were taken out before 2007 (if she recalls correctly). At least for her, just her master’s degree loans qualify for PSLF. She was in undergrad between 2002 and 2006.

How Does Public Service Loan Forgiveness Work?

PSLF is for people who are in certain career types: non-profit and/or government employer may qualify. As Jill works for a public university, she is a state employee and her institution qualifies. Her job post-master’s also qualified for PSLF.

The applicant will make 120 payments perfectly while enrolled in one of the income-driven repayment plans (20-25-year repayment period). At the end the remaining balance will be forgiven. The forgiven balance is not taxed for PSLF, though it is for the income-driven repayment plans.

This is sort of a game because you are supposed to stick to making only the minimum payments even if you could pay more. often, and the payments often don’t even cover the full interest so the loan balance may be growing throughout that time. You have to do everything letter-perfect and hope that your loan balance is forgiven

The first crop of people became eligible for forgiveness in 2017, but the reported rate of actual forgiveness is quite low (1%). Many people who thought they were doing everything right for PSLF have been denied forgiveness.

Further reading:

Given the Low Rate of Actual Forgiveness Occurring, How Does Jill Feel About It?

It’s a daily struggle deciding which loan to prioritize because Jill’s loans are at a higher interest rate.

Mike has loans and is staying home right now. He might qualify for PSLF if he got a job, but it would still take 10 more years of repayment before he would qualify for forgiveness. That time frame was not appealing for them.

If Mike’s 6.5% interest loans are paid before Jill’s four remaining years in the PSLF program are up, they might consider repaying more of Jill’s loans. However, she doesn’t project that to happen within that timeframe. Since they will have to pay for more than 4 years, they’ll wait and see what happens with PSLF and hope for the best.

Emily likes that Jill and Mike are not resting on their laurels and going for the lowest possible minimum payment by both enrolling in income-driven repayment programs and only paying the minimums. Instead, they are attacking the debt in a strategic way. They are being proactive instead of just signing up for everything available to minimize payments.

What Else is Going on for You Financially Aside from Student Loan Repayment?

Jill’s employer contributes to her retirement funds. She is in a pension plan calculated based on years of service and highest gross salary upon retirement eligibility. In addition, they contribute 6% of her salary into a targeted retirement account (doesn’t come out of her paycheck). Jill doesn’t add anything to this for retirement for the time being. This does make her nervous.

Jill and Mike both have retirement funds from previous jobs, but they are not adding to them.

They recently started thinking about contributing to a Roth IRA given their lower current tax bracket vs. their likely higher future tax bracket. They are 34 years old and would like to be doing more on retirement, but they aren’t doing much for that right now.

Once they have the debt paid off, they will have much more cash flow to direct toward retirement or another goal.

How Did You Decide for Mike to Be a SAHD and Did Finances Play a Role?

When they moved to Portland for Jill’s job, Mike didn’t have a job lined up. Their plan was to move and find childcare, and then Mike would get a job. Infant care is really hard to come by and it’s very expensive. They were on a lot of waiting lists and had to pass the time until a spot became available. During that time, they were figuring out finances.

When a spot became available, it was $1,500/mo for full-time infant care at a childcare center. They enrolled and Mike started looking for a job. Jill set up her FSA to pay for the childcare. Ellie was enrolled for about a week when they really delved into their finances if Mike got a job. Their loan payments would go up to at least $1,000/mo, they would be paying $1,500/mo for childcare, plus they would have higher transit expenses and higher income taxes. Then they would be all the time spent at the job and commuting! To them, it didn’t make sense time-wise and financially for Mike to work given his employment prospects. In Ohio, he was making about $45,000/year, and the cost of living was much less. In Oregon, his salary wouldn’t be as much as Jill was making, and his salary would go largely toward loans and childcare. They thought, why not stay home? He was excited to stay home as well.

Emily thinks that what you want for your family doesn’t come into play as much as it should. There are financial arguments for one parent to stay home and financial arguments for both parents to work. But what about what the parents want individually and as a family? Personal finance is not just about numbers and money! In Jill and Mike’s case, there wasn’t a huge financial hit for Mike to become a stay-at-home dad.

Before Mike and Jill had Ellie, they joked about Jill working and Mike being a SAHD without thinking that was a real possibility. It’s kind of cool that it worked out.

What Financial Advice Would You Give Your Past Self?

Jill could have done a few things differently. She would have ended up with significant loans anyway, but could have reduced them by a lot. She went out of state for both her undergrad and master’s degrees, which adds a lot to the debt! Staying in state for the tuition reduction would have been a good idea. For her master’s degree, she could have worked in Pennsylvania first to establish residency and even asked her employer to pay for her master’s degree in part or in full. She didn’t need to go straight from undergrad to master’s. This would have reduced financial burden in the long run.

Out of state vs. in state designation doesn’t matter much to funded PhD students though it does to their departments at public universities. However, for a master’s degree being paid out of pocket, this matters a lot! Employers do fund master’s degrees, especially part-time. Doing the PhD was always Jill’s plan so doing the master’s slower would have been fine.

Mike’s master’s degree was helpful for him to get a better job in Ohio. However, he also chose to go to a private university for his master’s instead of an in-state university, so the costs were a lot higher. Now he thinks he should have gone to the state school he got into and reduce his debt. Once Ellie is in school, having the master’s will help him get another job.

Emily also went to private college and it was a huge price tag that her parents paid. Now, she wants to make public in-state university seem very attractive to her children!

What Is Toddler on the Tenure Track?

Jill started Toddler on the Tenure Track in December 2018 and is still figuring out what it’s about. She wanted to create a space to talk about how she’s doing her junior faculty job with young kids, such as how to be a whole person in a job that’s trying to consume 100% of your energy. It’s her way to document the process of being a whole person in academia and not be sucked into working 24/7 and to document her path through the tenure process. She writes about what’s worked for her and not worked in terms of planning and organization of being a faculty member. That’s a huge part of her job that’s not widely discussed. Some of the strategies she writes about might work for others.

Jill has written some logistical pieces, such as on the process of becoming a tenure-track faculty. She moved cross-country for the job! As a grad student, she would have wanted to know what being a faculty looks like on a daily basis. Educational debt is also a huge part of the lives of people who work in academia, she so also shares about her finances and loan repayment journey.

Go check out Toddler on the Tenure Track if you are a faculty member and parent or aspire to be!

How This Grad Student Had a Baby, Landed a TT Job, and Defended Her PhD within Six Months

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In the last half-year of her PhD, Dr. Heather birthed her first child, completed and defended her dissertation, and landed a tenure-track job… all while caring for her infant alongside her visiting professor husband without any outside help. During the episode, we discuss many of the logistics that go into having a child during grad school, from arranging parental leave to conducting experiments around a nursing schedule. Heather shares how she learned to ask for the accommodations she needed and her advice for new academic parents.

Links mentioned in episode

Subscribe on Apple Podcasts, Google Play Music, Stitcher, or Spotify.

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grad student baby

0:00 Introduction

1:26 Please Introduce Yourself

Dr. Heather works at a small undergraduate institution in the Midwest U.S. She and her husband both work as professors. She has a PhD in Chemical Engineering in the southeast U.S. Her husband’s background is in math and computer science.

They had her first child while Heather was finishing her PhD and on the job market. Heather was four years and one semester into her PhD when she had her baby. Her husband was a visiting assistant professor at the institution where she was getting her PhD. Both of them were looking for tenure track positions while Heather was pregnant. They found jobs at the same institution, and have been in their current position for four years. They had a second child and are expecting their third. They value commitment to family, so they don’t let their professional life deter them. Their jobs and finances are in services to their values.

5:10 What was your income when your first child was born?

In total, they earned around $60,000 per year from their primary jobs. Because her husband had a visiting assistant professor position, her husband’s salary was around $40,000 per year. Heather’s income was around $18,000 per year. In addition, they both had earned income from summer internships in private industry. They each made $16,000 to $18,000 for three months of work. Much of this money remained in their accounts at the time their daughter was born at the end of the calendar year. Their household income was lower the next year, because Heather took unpaid leave after having her baby and neither took another summer job for extra income.

8:55 How did you arrange your parental leave?

Heather did not find a formal university policy on parental leave for any type of employee, whether tenured faculty or staff or graduate research assistant. Without a university policy to go by, Heather looked to the Family and Medical Leave Act (FMLA) that guaranteed she would get her job back if she took off six weeks unpaid. She was paid by her research advisor’s grant, so she came to an agreement directly with her research advisor to take six weeks unpaid.

Because she gave birth during winter break, Heather had two weeks break in addition to six weeks unpaid, for a total of eight weeks off. Nevertheless, when her baby was one month old, Heather returned to work in the lab one hour each day. At six weeks, Heather worked four hours in the lab and worked on writing manuscripts. She did not work a typical 40 hour work week. Some weeks she’d work 12 to 30 hours, and others she’d work more than 50 hours on writing her dissertation. She had set her defense date, so she felt that her own progress was at stake if she delayed returning to work.

14:58 Did your partner take parental leave?

Heather’s husband did not take any official parental leave. He was teaching three courses in the fall while Heather was pregnant. During the spring, When they had their newborn child, he was teaching three courses. He had two or three afternoons each week when he was teaching class. However, he had every morning of the week unscheduled and two days a week unscheduled. Heather was able to work in the lab in the mornings while her husband stayed with the baby. Two days a week, Heather had the option of working a full day in the lab.

16:20 How did you use your health insurance?

Heather remembers she had the option to add her baby to her health insurance or to her husband’s health insurance. She had out-of-pocket costs and co-pays. In one case, she chose a medication that was significantly cheaper. Overall, she did not feel overwhelmed by the financial stress, but she found it confusing to plan for medical expenses. She used her savings from her summer internship to cover prenatal care.

21:39 What was your childcare arrangement and how was it different than other approaches?

Her husband’s schedule was fixed with class times, but Heather’s schedule was very flexible. They considered the baby’s needs and developed routines around the baby’s sleeping and feeding schedule. Heather would leave the house at 6am and try to be home by 10am because the baby consistently slept for this four hour time block. She used this plan to get her lab work done. Once the baby could use a bottle, Heather started to extend her time away from the baby and get more work done in the lab.

Heather and her husband were primary caretakers of their baby. Even after the first four to six weeks, they did not put their child in daycare or have other outside help.

25:20 How did the childcare arrangement change when the baby was older?

At the end of the spring semester, Heather’s baby was five to six months old. This was a stressful time for Heather and her husband. They set morning time to be “baby with dad,” and afternoon time was “baby with mom.” However, there were times when Heather’s husband would call to ask her to come home to help calm down the baby. Heather felt that if she kept pushing lab work off until the next day, she would not finish by her defense date.

During the summer, Heather’s baby was six to eight months old. Heather switched her focused to writing her dissertation, and stopped doing lab work. Heather’s husband did not teach during the summer, so he took the leading role to care for the baby. They approached childcare as a team.

28:05 What was your motivation to take on full childcare responsibilities?

Heather and her husband were eager to learn to be parents. They felt that having a baby was an exciting challenge that they could take on together. They were excited to be part of the baby’s life as much as possible. By caring for the baby themselves, they learned how to care for an infant. They valued the learning experience and they were wiling to make sacrifices for it. They now look back on that time fondly.

Heather and her husband had friends that also took on childcare while in graduate school. Seeing another graduate student parent couple made them hope they could do it too. When more people tell their stories of parenting while in graduate school, it helps others understand what it’s like to make this decision. Emily mentioned that in U.S. society, parental leave policies could be a deterrent to having a baby and detrimental to women. Because there is no mandate at the federal level, policies are inconsistent across the country. They often only allow for maternal leave and no paternal leave. Heather explained that she has an egalitarian relationship with her husband. They are a team, so it was their understanding that they’d take care of the baby together. They chose to balance childcare responsibilities in ways that made sense, not following gender norms. Heather and her husband both wanted to spend time with their kids.

35:02 What was your experience being on the job market with a baby?

Heather was applying to jobs while she was pregnant. She applied to jobs with deadlines in November and early December, then planned to take a break after having her baby and apply to more in the spring if needed. Heather was worried about having job interviews when she was pregnant. She sought advice from faculty who had also applied to jobs while they were pregnant. Heather was advised to tell her interviewers about her pregnancy, because the response would be a major indicator of her potential employer’s values. Heather found this advice to be very reassuring and useful.

Heather got a job interview when she was 8 months pregnant. She couldn’t fly to do the interview in person. She told her point of contact that she was expecting a baby, and she received congratulations and willingness to accommodate. They arranged a remote interview with every person she needed to talk to, and she got the job. Heather wanted to visit the institution before she accepted the job, so they gave her extra time to make her decision. Her husband got an interview at the same institution, so they visited together with their baby in the winter. When her husband got his offer letter from the institution, they both accepted their positions.

By choosing to disclose her pregnancy during the job application process, Heather had the power to reframe her pregnancy as a way to determine if the potential employer shares her values. In making her decision, Heather considered how family-friendly was her point of contact and the rest of the institution. Heather was accepted for the position at her top choice. She applied to a few and select positions, and coincidentally her top choice had an earlier timeline. Heather and her husband were also looking at industry jobs.

43:00 What advice do you have for other first time parents in the PhD process? How did you keep startup costs low?

Heather advises to keep it simple. She said they asked for clothes and gift certificates. They did not want big items as hand me downs or gifts. Because they lived far away from family, they avoided inheriting too much stuff. They had no nursery and no changing table. They used cloth diapers instead of disposable diapers. Heather breastfed her baby, so they didn’t buy formula or lots of bottles. Babies need very little when they’re very young, so it’s easy to keep costs low and buy only the basics.

Heather also says to surround yourself with people who have been through this before. She reached out to women who had babies in grad school. Also, she reached out to women in the community to get recommendations for doctors, caretakers, and prenatal classes. This is how she found what was available in the community. You also have to ask for what you need. For example, Heather was riding her bike to the only place on campus where she could pump. But when she asked for a private space in the building that she worked in, a space was arranged for her. She encourages young parents to get the confidence to ask questions and get information. Kind of like talking about finances, talking about parenting can feel taboo, but so many people have similar experiences and knowledge to share.

50:59 Final Comments

Heather was considering if graduate school was the right time to have children. She realized that there’s never a perfect time, but it’s always a good time. Finishing her PhD and having her first child was a big mental and emotional transition time in her life. It was a transition in family life and financial situation. Her life had major uncertainties, like what if they didn’t get those jobs? Being comfortable with uncertainty is hard, but it helps to know that plans you make are just guides. Uncertainty comes with any change in your life, but you can prepare the best you can and embrace it with excitement.

54:00 Conclusion