Tuesday, March 10, 2009

Recession in ‘02/03 and ‘09 –What does it mean to a Graduate Student?

After I wrote “Graduate Students in US: How to survive Recession?” and “Life of International Students and H1B Visa Holders during US Economic Recession” I used to get a lot of emails and questions in the comment section of my blog about lot of stuff related to graduate schools. Most questions relate to, if this is the right time to come to US for graduate studies and things of that sort. Here is one such comment from one of my posts. 

i hv applied for fall 2009 and as of now i hv 4 admits...SDSU,CSU,NJIT,UIC...lookin at all these issues like H1b's, recession, no jobs...its really very scary to take a decision...

i desperately want to do MS....i never thought of neother options at all...very determined towards it...but i feelin sick now...i am very afraid to take a decision...pls can neone tell me is it worth and safe goin now...i.e. fall 2009...
thankyou..
” 

This post is an attempt to answer the above questions and more. When I came here for my Masters in 2001, the economy was already slowing down and it went to a recession soon after 9/11. People were loosing jobs and new jobs were hard to find but things were never as bad as it is today. Another good thing about the recession in 2001 was that universities were not affected that much. Yes there were budget cuts but never of this magnitude. 

Now let us try to answer the question – Is it right time to come to US for higher studies? First let me explain three possible scenarios where a student can come to US for higher studies from India. Here I am making up numbers to make a point. In the first scenario –assume ten students are coming to US when the market is very good – the most ideal case to come to US. Seven out of those ten will end up with some kind of assistantship that helps them to complete MS either paying partial fees or no fees at all and get a monthly stipend. The remaining three may get hourly jobs that can take care of their day to day life in US. These three students will have to find money to pay the fees. So even in the ideal case also there will be few unlucky guys who won’t be getting any scholarship. 

Now the second case – a mild recession like that happened in 2002. If 10 students were to come during that time, five may get assistantship, four of them may get hourly jobs and one may not get a job at all for at least the first year. Now those unlucky five have to find money to pay the fees. 

Now the third case – a severe recession as it is happening now. If 10 students are coming one may get assistantship, four may get hourly jobs and remaining 5 may not even get an hourly job. Life will be tough for those nine guys. 

So to answer the question is it the right time to come to US for higher studies – it totally depends on your luck and timing. You can come here and if you are lucky you can be the one person who is getting the assistantship even during the peak of recession. I believe once you join a university in US, more than your talent getting an assistantship depends on luck. You should be “lucky” enough to find a professor at the right “time” that has some funds to support you and more important you should be really “lucky” for the professor to offer you the job as he has lot of students to choose from now. 

There are certain things that have changed in recent times that make the life tough for graduate students. You should consider this before you decide to join the US universities. Each student who joins for Masters should know this. Lot of my friends who came to my school along with me never took money from home, starting from the second semester to pay tuition fees even though they never had assistantship. Majority of them used credit cards. If you do your homework properly and shop around there were lot of credit card companies that offered 0% APR or 1.99% for balance transfers. For me even before I got my Social Security Number (SSN) I got an American Express student credit card with a credit line of $3200. In Spring semester, less than six months after I landed in US I got a Citibank credit card with a credit of $6300 with 0% APR for 1 year. I used that to pay the tuition and never had a pay a cent as interest for that money. In that one year you could get another card with a similar offer. Even if you don’t get any offer you could use your credit card to pay your tuition and you could pay it off in less than two years once you get a job. 

This scenario has completely changed. Today, with the credit crisis in US no credit card company will be issuing a credit card to a student who has no credit history at all. Now if you are coming as a student to do higher studies you can forget the option of paying with credit cards. Even if you get one the credit line won’t be high enough to pay your semester fees. So what does that mean? If you don’t have assistantship you have to get the entire money from India to pay the fees. Earlier you could manage with credit card and stuff like that. This has become a thing of the past. 

Another major difference between 2002 and now – If you had graduated during 2002 and could not find a job you have one full year in OPT to find a job. Once you get a job you could apply for H1B visa any time of the year. Now that is not the case. The last two years the H1B visa quota is getting over in less than a week. You need to have a job that sponsors H1B visa ready by April 1st if you want to continue working in US. What does that mean?  Now you have a very small window to find a job. Let me explain. 

Assume you graduated in Fall 2002, you are in OPT for an year and say you get a job in June 2003. Now you could immediately join for work and apply for your H1B visa that enabled you to work beyond December. If the same scenario happened in 2008, you may run out of luck with your H1B visa. The H1B visas got over by April and since you got a job only in June you cannot apply for H1B visa. If you were jobless for more than three months in OPT as per the new rule you are out of status and have to leave the country. So you don’t have much choice in front of you other than leaving the country or applying for another Masters. The point I am coming to is that H1B visa process has become a complicated one over the last few years with lot variables over which a student has little control. This makes things extremely difficult especially during a recession. 

Now again the question – Should you come to US for higher studies? I believe it should be an individual’s decision. If you think you have the will power to overcome the difficulties, can manage the financial resources for higher studies, then you can think about it. One thing I can tell you from my experience and I am sure almost everyone who has done higher studies here will agree with me – coming to US all by yourself and undergoing the hardships and pain will make you a better individual, preparing you to face the challenges in the tough world we live in. I believe this is one of the most important and beautiful lessons of doing higher studies in US all by yourself.

CORRECTION:(March 22nd, 2009)

I had written earlier that you can be without job during the entire period of your first OPT (post completion OPT). Later I realized that it is not correct. If you accumulate 90 days of unemployment in post completion OPT you are out of status. I am very sorry for the confusion

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28 Comments:

Blogger Ajith said...

Excellent writeup.ur t ur best when u deal this topic -Ajith

March 10, 2009 12:11 PM  
Blogger Anju said...

Thanks for the information!It clears a lot of things!:)

March 10, 2009 1:01 PM  
Blogger silverine said...

Thanks for this. I have sent this to all the people I know who are in the process of going to the US for higher studies.

March 10, 2009 4:31 PM  
OpenID ashish said...

excellent ! enlightened me ! thanks a lot !

March 10, 2009 5:25 PM  
Blogger Jobz said...

Hi Brijesh, just a point. Now with the new rules of OPT extension(12+17 month), a student can reside here for only 3 months from the start of the OPT within which he/she has to obtain an employment.

March 10, 2009 9:00 PM  
Blogger Brijesh Nair said...

Ajith,
May be because I am writing from my own experience.

Silverine,
Thanks for sending it to your friends

Jobz
If you are with out job for more than 90 days in the first OPT you are not eligible for filing 17 months extension. You can be without work and stay back here for 12 months during the first OPT.

March 11, 2009 4:52 AM  
Blogger Akash said...

It's funny how you've ignored the "higher studies" part! I mean, I appreciate all the motive behind the post, but in today's world are higher studies synonymous with just placements/job/settling in the US? Why can't someone go back to India or care about the "education" he/she gets out of the schools here. If you want to really get good education and/or wish to do some great research, then come to the US. Else, sit in India and get a job there! What's wrong in that? Why this hurry about leaving India, finding a job in the US? And yes, it applies to anyone, even if he/she wasn't born with a silver spoon in his/her mouth.

Think for once, your post is so objective, and just looks at everything keeping one point in mind - "money". Quite funny and very disappointing!

March 13, 2009 12:07 AM  
Blogger Brijesh Nair said...

Akash,
Money plays an important role in higher studies for students coming from India. Yes it is very easy to say "Why can't someone go back to India or care about the "education" he/she gets out of the schools here."

I saw from your profile that you are going to do PhD. Assume you don't have assistantship for your PhD and when you graduate you have say around 30 K loan that you paid as fees. Will you go back to India with the PhD you got and pay back the loan from India? For most of the students who come to US for higher studies the money they have to spend for it is one of the most important factor.

March 13, 2009 12:51 AM  
Blogger sanz said...

Hi. Thanx for taking your time out and explainin the scenario in depth to those who're here. One question about your reply to Jobz, you sed "You can be without work and stay back here for 12 months during the first OPT." but the limit is 3 months right? if without work for 90dayz/3 months then no extension, isn't it?

March 13, 2009 7:40 AM  
Blogger Jennifer said...

This is a great post. Thank you for going into so many details from different angles. It is indeed an interesting and time sensitive topic.

I do have one agreement with Akash. As an American who did study in India, I think the Indian educational system is a good one. Every system, as long as it is a system has benefits and disadvantages, but why is it that people think coming to America makes life or job prospect better? On some hands practically I see it, but then I read articles like a Malayalee settled in Dubai now comes home because of recession saying "My wife's parents agreed to the marriage because in Dubai I was somebody, now that I am back in Kerala, I am a nobody." When I read this I am sad because India is a great place, yes like any country has it's plusses and things to be improved, but then again what's so bad about being at your home, in India? India is your home, and economically advantages may be outside India, but inside India is another wealth can't always be found or realized outside- the wealth of family and friends. It's always a balance, I suppose.

The other thought came to me in reading this is my impression about the worth and value Indians do put on education. Of course I understand that one reason Indians go abroad is there are not enough seats in Indian colleges, even as IITs try to expand (and not doing so well with that), seats are at a premium and when Americans are not going to college for higher studies for economic and other reasons, foreign students can come in and take up those seats. On some levels it may bring about a better more motivated student population. Though I have seen situations where Indian and other foreign students are coming here, accepted by the college, just to fill seats- meaning they are not qualified or they can't even cope up with the academic demands because such programs generally require work experience and without it the culture and academic shock is too overwhelming- basically they aren't prepared.

But I continue to be impressed with Indians determination and investment in the education. Rupee and dollar conversions are astronomical and more and more Indian students come here with full loans from banks in India or have their relatives in US sign loans for them. It's a big risk for everyone and a big gamble job placement wise after the graduation happens. Really give you a big kudos for that. It shows something I know many Americans take for granted because no matter where you live I think there are people to take for granted what is in your own backyard.

Thank you for sharing this wonderful article.

March 13, 2009 1:21 PM  
Anonymous Anonymous said...

Really like your blog!

March 18, 2009 3:22 PM  
Anonymous Garrulous said...

Very well summarized. As share market funda goes, investing at the abyss and selling at the pinnacle. Do you think its a right time to invest into education? Though I don't consider education as a short term investment. Any kind of education like governmental/public policies has to be seen over an eon. There might be short term losses but on long term, if efficiently executed always results into profits. And why can't anyone think of coming back to India for work. Yes loans are huge. But most of the grad students have 30-35 years of careers ahead them. Its sufficient time to pay back loans.

Also, facing the heat at this time are those who entered into graduate studies in year 06/07/part of 08 when markets across the globe were in boom time. I don't know any of my colleague who went for graduate studies (US and India) during that period ever thought of possible change in times in coming years. So reciprocal might be applicable too. Unfortunately, there are too many ifs and buts in this theory.

In your opinion, if anyone has somehow arranges finances and he/she is getting opportunity in a top program at the top university (but no financial assistance), then is it right time to jump into the graduate studies.

March 19, 2009 6:35 PM  
Blogger kalyan said...

hi, excellent work brijesh.
can you please explain about the new rules of opt?
"If you are with out job for more than 90 days in the first OPT you are not eligible for filing 17 months extension. You can be without work and stay back here for 12 months during the first OPT"

March 19, 2009 10:00 PM  
Blogger Brijesh Nair said...

Garrulous

‘But most of the grad students have 30-35 years of careers ahead them. Its sufficient time to pay back loans.”

It is not practical to take loan in India and study in US and then go back to India immediately. You may have to work good part of your life just to pay that off.

Yes it is always good to invest in education and if you are getting a admission in a good school and planning to be here for some time then this is the perfect time. Things wont be this bad for a long time.

Kalyan,

To apply for OPT extension you cannot be without a job for more than 90 days. For example you did not get a job for first six months of your first OPT. Then you cannot apply for the OPT extension. But till the end of the first OPT (1 year) you can stay here in US. This is what I meant. Hope it is clear.

March 20, 2009 3:32 AM  
Blogger Brijesh Nair said...

sanz,
You are correct.

Jennifer,
Thanks for the nice words.

March 20, 2009 3:36 AM  
Blogger RacingHart,,,,!!! said...

This comment has been removed by the author.

April 01, 2009 1:19 AM  
Blogger RacingHart,,,,!!! said...

i appreciate ur efforts,,i find ur article very helpful,i am plannin to for ms in cs,,fall2009,,always wantd to do ms,,after few yars of work experience,i worked hard in my Btech,,got placed in campus interviews,but joing delayed bcoz of recession,,i am a 2008 passout,wasted 1yr,,now plannin to enter US at my own risk.,,

April 01, 2009 1:22 AM  
Blogger priyanka said...

what if the situation doesnt improve by the time fall 2009 ppl like me graduate..i m thinking of doing MS entirely on loan bt if the situatn doesnt improve it will be a big risk...

April 07, 2009 8:57 AM  
Blogger Brijesh Nair said...

Priyanka,
If recession goes on that long then almost every one of us will be without job. Hopefully that wont happen.

April 07, 2009 9:01 AM  
Blogger priyanka said...

okk..If you were at my place...what would you have done?

April 07, 2009 7:39 PM  
Blogger Brijesh Nair said...

Priyanka,
I should have come with the hope that the US will be out of recession by the time I graduate.

April 07, 2009 8:02 PM  
Blogger GreEnBlood said...

hi brijesh....
really good work...i have been searching for some discussion for so long and im lucky to have gone through ur blog..
The recession and the HI visa scene is really very bad...I have an admit in suny buffalo for MS EE this fall 09 and i am not sure what to do..
i have a tcs offer at hand and at times my mind says me to take it and forget about the MS...on the other hand my retired parents are trying to tell me that they will pay SOMEHOW for the studies and are aking me to go to the US and get the degree...

But brijesh...how far is it worth it? u told earlier that the experience one gets in the US makes u a better individual...can this be one huge reason for students to go to the US?...wont working in tcs in india(in my case) make me a stronger individual?

My parents are supporting me for MS because it was on my mind for 4 long years and they feel that i may regret if i dont go..But will i really regret it?in such a horrible situation?wont i feel more secured and happy with a job at hand right in my homeland?

So brijesh please tell me what to do...what would u do in my place?
Please note that i dont have very deep dreams to pursue Masters(studies..research etc etc)...I wanted MS for the exposure..job..money and US life...keeping these priorities of mine in mind what would you suggest me to do?
please help...
im in the greatest confusion in my life
all i do all day is curse the damn recession!
peace guys!

May 21, 2009 9:22 PM  
Blogger Brijesh Nair said...

GreEnBlood

In the long run if you are having a US degree it will benefit you for sure.

Again as I wrote in previous comment no one can predict what is going to happen. If you are joining this fall by the time you graduate the market should be good and you should be able to find a job. Having said that if you are not so keen on an US degree you can join TCS, come here in H1B visa or L1 visa, make money and enjoy US life.

If you join this Fall, first few months will be extremely tough and even getting a hourly job on campus may be tough. Keep this also in mind.

May 22, 2009 9:08 AM  
Blogger vinod said...

ur blog have given me a nice information at which am looking for and i have a doubt that if at all ive got a job immediately after completing my ms then can i continue the job or is there any visa problem arises i.e again should i change my visa type...........

July 12, 2009 5:32 PM  
Blogger priyanka said...

hey i m plannin 2 go dis fall r conditions sstill critical i m plannin 2 aply in 1 of texas universities do u hav idea about conditions der

September 30, 2009 6:22 AM  
Blogger Brijesh Nair said...

PRIYANKA,
it is getting slightly better but will take time to go back to the times when you have a job even before you graduate. Most probably by the time you graduate things should become much better.

September 30, 2009 6:24 AM  
Anonymous priyanka shah said...

u said it will b difficult to get even hourly jobs so shud i consider going 2 uni that are in hub areas but they r bit costly i will b going totally in loan or shud i stick to areas that are cheap to live?

September 30, 2009 6:39 AM  
Blogger Brijesh Nair said...

u said it will b difficult to get even hourly jobs so shud i consider going 2 uni that are in hub areas but they r bit costly i will b going totally in loan or shud i stick to areas that are cheap to live?

Priyanka,
Select good university so that even if u dont get any funding your chances of getting jobs are high. Again if you are lucky u may end up with scholarship from any universities. Few students still manage to get funding even during this tough times.

September 30, 2009 6:42 AM  

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