After The MBA

California: The Worst Place to Look For a Job

If you are looking for a job, DON’T come to California unless you absolutely must have good weather and the best selection of fresh produce. It has been 6 months since I graduated with my MBA from Cornell University and I find myself still looking for a job. I will admit that things have been more challenging than I had originally anticipated and I think a major factor is because of my unwavering desire to live in San Francisco.

California, with a jobless rate of 12.3%, is tied for the 3rd highest unemployment rate in the country. However, once you factor in total population, California kicks everyone else’s butt in terms of number of unemployed people living in the state. There are more jobless bums (roughly 4.5 million) living in California than there are total people living in the state of South Carolina. Ultimately, this means that the amount of competition that I am facing for new jobs is that much more intense than anywhere else in the country.

All you 2010 MBAs who are still unemployed at graduation:  take heed and choose wisely when you decide where you want to live after B-school. Many companies right now will not consider you if you are out-of-state because they don’t want to pay for relocation. And as you can see, there is a huge variance in unemployment across the country. If I could do it again, I still would have moved to San Francisco because the avocados and tomatoes alone make it all worthwhile.

Federal Student Loans: Not A Very Good Deal

The first week of December signals two important events:

        1.)  The holiday season is just around the corner.

        2.)  Repayment of my student loans from B-school begins.

What bugs me about my Federal Direct student loans is the fact that they are accruing interest at a fixed rate of 6.80%. (My total rate is actually higher because a significant portion of my loans are Federal Direct PLUS loans, which accrue at 7.65%.) The prime rate, which is the lending rate for the most credit worthy customers, is only 3.25%. (And yes I have great credit!) Somehow I get the feeling that I am getting a raw deal on my Federal student loans. Isn’t the government supposed to be helping me finance my education and not trying to massively profit off of it? Even the 30-year fixed mortgage rate (national average) is slightly less than 5.00%! WTH?  Even Tony Soprano would be impressed by such loan sharking.

And to make matters worse, I missed the deadline to apply for a loan deferment (I don’t have a job yet), which was on November 15^th. All you 2010 grads who are still unemployed a year from now, make sure you remember to apply for deferment more than 1-month ahead of your first payment! On the bright side, you can apply for deferment at anytime during your repayment so I will just have to make my first payment before getting my loans deferred. Loan deferment is helpful because it allows you to delay repayment and you do not accrue any interest on the subsidized portion of your Federal loans.

If I was smart, I would have taken out a mortgage in the same amount of my student loans, sold the house immediately for the same price that I bought it  (somewhat risky assumption), and used the proceeds to pay off my Federal student loans. Essentially I would be swapping my 6.80+% student loan rate for the 5.00% mortgage rate. Even after broker and origination fees, I feel confident that I would still have come out on top.