I’ve started the Stanford Chemistry Microloan Fund.
The concept is simple: contribute a small amount to the fund, then you have the opportunity to borrow interest-free. The idea is to help each other when we need a little cash between paychecks. When Stanford decides to raise fees by an order of magnitude. When we have to pay for conferences and airfare with our own credit cards, and hope we get reimbursed before our next payment is due. When living paycheck-to-paycheck gets a little nerve-racking.
Currently, SCMF is open to all graduate students in the Stanford Department of Chemistry, with exceptions made on a case-by-case basis. By keeping contributions and loans within the immediate community, I hope to maintain trust and transparency. (Of course, if someone outside the community wishes to donate to the fund, I’d be more than happy to take their donation.)
I’ll let you all know how it goes. So far, we have a handful of contributors, and a couple hundred in the “bank.” With several more small contributions, and some large ones from some angel investors (e.g. grad students married to someone with a real job), we should have a fund.
If it works out, I’ll suggest you start something similar at your own school.
I received this email today:
We are writing to inform you that beginning in the fall of 2009, Stanford University will implement a Campus Health Service Fee of $167 per quarter. The fee will cover many services provided by Vaden Health Center, including primary care medical visits, psychological evaluation and short-term therapy at Counseling and Psychological Services (CAPS), and access to health and wellness programs.
The mandatory fee will apply to all undergraduate and graduate students enrolled on the Stanford campus, including visiting researchers and students participating in high school summer programs that result in course credit at Stanford.
Wha? An increase in fees of $167 per quarter?!? Right now, I’m paying $30 in fees. Now it will be almost $200. That’s nearly an order-of-magnitude increase!
There are 17,833 students at Stanford, so that means an increase in well over $10 million in yearly revenue from fees. Holy shit!
So let me get this straight. In these hard economic times, the best idea is to squeeze millions of dollars out of the poorest people on campus? Without warning and in the middle of their schooling?
Bullshit. There should be a boycott.
Despite the fact that we are very expensive to our PIs, we graduate students receive a stipend that just barely pays for our living expenses. In fact, according to Stanford’s own estimate, our expenditures are a couple hundred dollars more than our annual income.
One result of this is that many of my fellow students live paycheck-to-paycheck, and do not have adequate savings to buffer against large expenses. This means that many students end up carrying a balance on their credit card, taking out a loan, or applying for another card to pay for unexpected peaks in spending (e.g. buying a plane ticket home, paying a rental deposit, or while waiting to be reimbursed for a conference). Having a small amount of interest-free borrowable money could help some students keep their heads above the water.
So, basically, I want to start a microcredit account for Stanford Chemistry grad students. This could be as simple as a checking account with a couple thousand dollars that could serve as a source of small, interest-free loans to students in need of some cash before their next paycheck or while they are waiting for reimbursement to clear.*
I envision a system in which individuals who contribute even a small amount to the account could withdraw a couple hundred dollars to pay for emergency expenses, then pay back the money in a month or so.
Here are some problems:
- Will People Contribute to the Fund? If 25 people contribute $25 each, and 50 more contribute a dollar, that’s already approaching a grand. If there a few angel investors—maybe grad students who are married to people with real jobs—contribute a few hundred each, you could reach a few thousand dollars. That doesn’t mean that people will actually be interested in joining the cause, or risking their money. Even if the account were interest-bearing, a few percent of a couple thousand spread among many isn’t a big motivator.
- Will People Borrow from the Fund? This is probably the biggest problem. Borrowing would probably mean contacting the person who holds the debit card, filling out a form, etc. That might be too much work for just for a few hundred bucks. I suspect this getting people to actually borrow would be the real problem with the idea.
- Will Borrowers be Forced to Grovel? If one person is the official owner of the account, then borrowers would have to go to that person to get the debit card. That might feel like groveling. Or it might be embarrassing. And that’s assuming that the account owner is nice and responsible.
- Should the Loans be Public or Secret? Making the loan amounts and borrowers “public”—even if only among the people who have contributed to the fund—might cause borrowers to feel embarrassed. Conversely, if the loans are kept secret, then there’s less encouragement to repay loans quickly and fully. A compromise might be to only announce names and amounts when repayments are late. That would encourage delinquent accounts to be repaid.
- Will People Repay? I think this wouldn’t be a problem. Because the fund is community-sponsored, and because the funders and borrowers all know each other, and because the loans will be small and we do have incomes, I think that almost all the loans would be paid back in full. Peer pressure can be effective at encouraging repayments.
- Other Logistics? This can be complicated. Do you have one responsible person open a checking account, or are there group accounts available? Google Spreadsheets and Forms, or even just Excel, could be useful for much of the logistics (contribution and loan amounts, repayment dates, etc.). What about when the owner graduates? They’d have to pass the account on to another student, which could be messy. How do you distribute interest and losses to the contributors?
UPDATE: Using PayPal might help a lot of the logistics, and even reduce the face-to-face groveling required to get money.
* I don’t know how it works elsewhere, but grad students at Stanford are required to pay their own way to conferences and flights, then get reimbursed. The poor students are basically giving the rich University an interest-free loan while waiting for reimbursement to clear. For some reason, we can’t be preimbursed for our conference expenses. Usually, you are reimbursed before you have to pay your credit card bill, but it still is a stupid system that puts undue burden on the students. The microcredit account could serve as a low-bureaucracy alternative to the stupid reimbursement system when a student is very short on cash or has already maxed out their credit card.
According to a article in the Stanford Daily, over 60% of graduate students at Stanford consider finances “stressful,” and over 40% consider graduate school “a financial risk.” Source. These figures are apparently from the Graduate Student Council’s 2007 survey of graduate student life, which unfortunately I could not find a copy of on the GSC website.
I did some investigating myself. According to the Stanford Registrar’s “Guide to Graduate Student Life,” the estimated living costs (per quarter) of a Stanford graduate student are:
Housing (Rent, Utilities, Furnishings): $2,941
Personal (toiletries, entertainment, and clothing): $856
Transportations (Fares, Parking, Insurance, and Vehicle Expenses): $300
Medical (Insurance, Co-payments, and Meds): $766
Books (For courses and outside research): $591
Total: $7,289/quarter ($29,156/year)
So, according to the Stanford Registrar’s office, the estimated living expenses for a graduate student are $7,289/quarter ($29,156/year). In chemistry since we generally don’t take classes after our first year and our P.I.’s pay for almost all research expenses, we’ll consider a chemistry (or natural sciences) living expense (minus books) to be $6,698/quarter ($26,792/year).
The minimum graduate Research Assistantship at Stanford (which is what the Chemistry Department pays for us as a stipend) is $6,953/quarter (or $27,812/year). This is between a shorfall of $336/quarter (or $1,344/year) from the registrar’s estimated expenses and a surplus of $255/quarter (or $1,020/year) from the chemist’s expenses.
Of course, we’re TAXED on our stipends, and the amount of federal tax we owe on our standard RAship (based on the 2007 tax tables for $27,812 – $5,350 standard deduction) is $2,587/year. That brings our annual salary down to $25,225. This is a shortfall in either scenario.
Speaks for itself
To follow up on Charles’ theme, I decided to post what you can expect to make as a postdoc in the sciences. The information below comes from the excellent Sigma Xi postdoc survey. Read it and weep.
After reading Charles’ excellent summary, I ran around our lab @ Columbia and surveyed the grad students:
Subject A – Biochemistry Graduate Student
Base salary: ~$28,000
After taxes: ~$24,000
- Medical insurance covered by Columbia.
- Monthly Transportation Cost: $100 for MetroCard and occasional taxi
- Columbia subsidized studio: $900/mo
- Basic cell phone plan: $55/mo
- Monthly food expense: $300
Disposable income: $7,740/yr or $645/mo
Subject B – Biology Graduate Student
Base salary: $27,600
After taxes: ~$23,500
- Medical insurance covered by Columbia.
- Monthly Transportation Cost: $90 for MetroCard
- Columbia subsidized apartment share: $770/mo
- Basic cell phone plan: $55/mo
- Monthly food expense: $400
Disposable income: $7,720/yr or $643/mo
There you have it – two very consistent data points. Even though the cost of living in NYC is greater than Palo Alto, generous student housing subsidies and inclusion of medical insurance make their disposable income greater than what you have.
Charles has been posting his calculations about graduate student pay partially because he is moving and partially because our department has recently had a clandestine change in the pay policy for teaching assistants (TAs).
From the plots below, you can see that, over the last few years, while a TA position pays more or the same one year to the next, the pay increase above the base research assistant (RA) stipend has been decreasing. (HTA and ATA are two different types of non-first-year grad student TAs.)
The real reason for this is that, in 2007-2008, graduate student TAs will now be paid less by their PIs during the quarter they are teaching. And, because our Department Chair went to bat for the students to the University, TAs will be paid above the minimum rate.
It actually makes sense that a PI shouldn’t have to pay his teaching students as much, and that the department should pick up the tab. But that’s not the way Stanford Department of Chemistry has done it in the past. I suspect we’re now in line with how most other schools pay TAs.
Motivated by unhappy granting agencies and an auditing University administration, the faculty decided to fix the students-being-paid-more-than-100% issue by, effectively, paying TAs less.
Frustrated grad students have been reacting to rumors of this happening for the last few months, and then it sorta happened while our back was turned.
Personally, I think it makes sense that a PI not pay a student full-time while he or she is TAing (on top of paying the student’s full tuition and overhead on the stipend)—I don’t want my PI spending more time working on grants. And students should TA for the sake of TAing, not for the extra pay itself. But it’s alway too bad when the University, the Department, and the Faculty make decisions that negatively affect student without even warning them of the impending change, or without explaining the reasons for what feels like a pay cut.
Federal/State Income Taxes at ca. 12.5% : $3,325
Rent at Palo Alto Average* of $904/month (US Census Bureau): $10848
National Average Food Expenditure for Single Male with Moderate Budget of $238/month: $2856
Subsidized Stanford Cardinal Health Care at $342/quarter: $1368
Averge Car Insurance for California at $847/6 mo.: $1694
1/2 Annual Automotive Travel (6250 miles) at average 21 mi/gal at Palo Alto gas price of $3.21/gal: $955
Cell Phone Cost (Cheapest Cingular Plan) at $40/mo: $480
*Note: Stanford Graduate Single Occupancy (i.e. 1 person/room) Housing rent ranges from $640 for Crothers to $994 for the EV studios. The Rate for Rains, Lyman, and EV 2Br is $790. There is an additonal a $27/month mandatory fee for telecommunication and laundry.
Total Income: $26,600
Total Expenditures: $21,526
Stanford Graduate Minimum Stipend (what we’re paid in Chemistry): $26,600
Average Work Hours for a U.S. science postdoc (probably similar to / less than graduate student): 49.8 U.S. citizen (Brumfiel, Geoff; “Taking a Stand,” Nature, 2005, 438, 278-279.)
Average pay/hour (50 weeks): $10.68
Average pay/hour (52 weeks): $10.27
Federal Minimum Hourly Wage: 2008 – $6.55, 2009 – $7.25
Living Wages: Encouraged in Cities/Counties by Ordinance (tax/property incentives)
San Jose Living Wage: $11.35
Santa Clara County (our county) Living Wage: $10.00
Berkely Living Wage: $12.55
Oakland Living Wage: $10.50
2004 Estimates of Retailers Bay Area (Annual Estimates for 40 hr work week, 50 weeks a year)
2004 Average Hourly Wage for Walmart Associate in Bay Area: $10.93
Walmart Annual: $21,860 (Stanford Salaray -$4740)
2004 Average Hourly Wage for All Large Retailers in Bay Area: $17.01,
Large Retailers Annual: $34,020 (Stanford Salary +$7420)
2004 Average Hourly Wage for Unionized Grocers in Bay Area: $15.31,
Unionized Grocers Annual: $30,620 (Stanford Salary +$4020)