Is it worth self-funding a PhD to attend a top 10 university?

Question

What should I opt for?

Option A) very well paid PhD, around €3000 per month at a respectable university or;

Option B) a non-paid PhD, where I have to pay €2000 per year at one of the top 10 universities of the world?

EDIT: Actually they are both UK universities, Option B is ranked between the top 10 in the world in engineering and tech, and I do get a scholarship that pays 18000 pounds which covers the difference between international student tuition and EU tuition. In Option A, I will be doing research in a good university and will be working alongside giants in the industry.

Answer 1

Congratulations on receiving these two offers from good universities, both of which offer at least some funding. I make it that the difference between your two options is about €114000 over the three-year period that UK PhDs are usually funded for. This is probably a very large difference and it might be worth trying to ask somebody within your field who knows both institutions and departments whether that would be worth it.

Certainly, self-funded students can survive PhDs in the UK, and your prospects of successfully completing are probably better than average if you are in engineering and tech. In addition, it may be a realistic prospect in the UK to receive payment for carrying out some teaching and demonstrating. I would advise asking about this possibility before you commit to option B. Look at the research council guidelines beforehand to try to gauge the best practices for salary and training.

However, there may be more important criteria than money. In one department I worked in I saw hoards of both funded and self-funding students abandoned by a particular supervisor before they quit. Don't let this be you. The (prestigious) department did nothing; it was absolutely buyer beware. So the usual advice applies: Talk to your supervisor's previous students, did they complete on time? What are they doing now? Did they see others around them succeed and being supported? Did they feel the supervisor, department and university helped them to succeed? Unfortunately, a top department is absolutely no guarantee of a non-toxic research culture in the group.

If option A is research council funded (or is funded by a high-profile UK body or another funder demanding results for their money), this would weigh heavily in my decision to take it, even if it is at a less prestigious university. There will be consequences for the group and department if a council-funded student fails to finish by the four-year deadline, and this means that both the supervisor and institution are absolutely committed to the student succeeding and solutions will have to be found if things start to go wrong.

Answer 2

Unless you're independently wealthy I think it is always unwise to do an unfunded Ph.D. program. With the current academic market the way that it is, there's just no guarantee that you will get a good job with the Ph.D. that will allow you to quickly pay off your debt. There's also no guarantee that you'll get a Ph.D. at all. We're talking about over a hundred thousand euros! There are some advantages to a top ranked department (as ff524 says, university ranking is irrelevant), but it's not 100K euros worth of advantage (especially since often a lot of the advantage of a top dept. is that they're better funded and so students can concentrate more on research).

Answer 3

While what you should opt for is clearly a personal decision, my stance is the following:

You Should Never Take An Unfunded PhD Position

There is already a decently high opportunity cost for getting a PhD - adding substantial amounts of debt (or erosion of savings to it) just makes this opportunity cost worse. It will put tremendous pressure on you coming out the other end into the job market, and generally speaking I've never encountered an institution that didn't use unfunded positions as a sort of "soft rejection" signaling mechanism.

The hope may be, of course, that you come, prove to be an outstanding researcher, and can find funding with a member of the faculty, but that's a hope, and one that's far from guaranteed.

Especially considering that your second, funded option sounds like a very decent choice of school, I wouldn't do it unless you're genuinely independently wealthy to the point that all of this is a purely theoretical discussion, but my guess is that's not the case.

Answer 4

Usually no, it is not worth self-funding a PhD program; in your case, however, I think it is worth it for two reasons:

1. Awesome top-10 school in your country
2. Relatively cheap (ration between cost of education to future income).

I will share my experience with you. Right now I am in-directly paying for my PhD. I was accepted in a Computer Engineering PhD program at a state school which is a fairly well known public research school, among the top 50 in the United States. I am using my company's education benefit to fund my education. For me it has been worth it but if I had to pay tuition entirely myself, I wouldn't do it since I already have masters degree and there won't be any major pay increase at my current employer.

Answer 5

Make sure your supervising professor is a world famous researcher in your field of choice and that they are a large research department. Check out their past students. Did they achieve research careers or leaving the country?

I did a PhD that straddled two fields; my supervisor was expert in field A, while I was interested in working in field B. The department was also based on field A. After I had successfully published a paper, a rival university tried to derail me from working in field B, because I was stepping on their toes. I ended up having my PhD deliberately dragged out for four years.

Answer 6

Some calculations using the input parameters you gave.

Option A: Assuming a 3-year PhD, you are earning €36,000 a year, or €108,000 over the duration of the PhD.

Option B: Assuming a 3-year PhD, you are losing €24,000 a year, or €72,000 over the duration of the PhD.

Let's assume that if you take option A, you go on to a job that pays a discretionary income of €3,000 a month (i.e. 3000 after all taxes and basic spending are deducted). If you take option B, you instead get €3,000 + X a month, where X is a positive number. (This is an assumption, and there's no guarantee that it will indeed happen.) Further, let's assume you save the entire sum, that you graduate at age 30 and work until 65, and your monthly salary never increases faster than the rate of inflation.

Next we assume that you already have enough money saved such that if you take option B, you start your working life with €0 (no student debt). That means that if you take option A, you start with €180,000. The average return of the S&P 500 per year over the past 90 years is 9.8%. This is the rate of return at which you're increasing your savings.

Now we can use a compound interest calculator to figure out how much money you have at retirement. Given €180,000 starting principal, €36,000 annual addition, 9.8% interest rate, and 35 years to compound, Option A gives €14,978,512.10. With option B, you have €0 starting principal, unknown annual addition, 9.8% interest rate, and 35 years to compound. Fiddling with the annual addition yields the result: to get the same ~€15 million retirement fund, you need an annual addition of €52,700.

You'll need to vary the parameters to fit your situation of course, but the result of this analysis is typical. Your monthly discretionary income needs to be at least ~€4392, or X must be at least €1392, for Option B to be competitive with Option A.

Do graduates with a degree from a top 10 university earn €1392 more per month than graduates from a lower-ranked university? You can ask around, but I'm pretty confident the answer is "no" unless you are in a field where average monthly earnings are five figures or greater.

tl; dr: take the funded position.