The first day students returned from winter break, Kathy Wilson, interim dean of the College of Business, announced the suspension of the Master of Science in Financial Engineering program, starting Fall 2012.

Wilson said the request, so far, was for a one-year program suspension to allow the Department of Finance time to analyze market conditions and determine what kind of program would best serve students.

“While we have made no specific decisions about future degree offerings, we believe it is promising to evaluate finance in terms of corporate risk management career opportunities,” Wilson said.

Wilson cited the difficult budget conditions facing public universities, including Kent State, as the main reason for suspending the program, even with the program fee of $3,600 per student each semester.

“The program is a very specialized degree that requires an academic background that not many people have,” Wilson said.

Michelle Parrish, assistant program director, said to be accepted into the program, students need to have taken higher-level math classes including Calc 1, 2 and 3. They also must have knowledge of differential equations, probability and statistics.

Parrish said though the program is not especially popular among Kent State undergraduates because of its extensive requirements, it draws in about 300 applicants from around the world each year. She said the program generally receives more applicants than any other College of Business master’s degree, including the Master of Business Administration.

Graduates of the program learn to combine applied mathematics with finance, allowing them to develop equations that assess different risks within a company.

“It’s just a very niche, specific market,” Parrish said. “There aren’t a lot of people that do it, but there are a lot of corporations that use it.”

The program is the only one of its kind in Ohio, and Parrish said it ranks highly among other schools offering the same degree, such as University of California Berkley, Massachusetts Institute of Technology and Cornell.

“Other schools are starting MSFE programs, but we’re ending ours even though it’s in such great demand,” Parrish said.

Despite its popularity, Wilson said the program had to remain small because the trading floor – which simulates real-world financial engineering environments – can only seat 25 students. She said the cost of expanding and upgrading the floor would have required additional facilities and money that is not readily available.

Parrish described the program as a one-year, lockstep program. All students take the same classes at the same time, beginning in the Fall and ending after Summer Intersession III. Because of this, the suspension will not affect any current students, as they will graduate in mid-August.

The program includes a 10-week domestic or overseas industry internship. Last year, 24 MSFE students received U.S. internships at companies including Goldman Sachs, Imagine Software and Eurex. Another 17 students took overseas internships at Asian companies including Great Wall Futures, Shanghai Futures Exchange and Hangzhou Xingli Investment Co.

John Palmer, a 2009 Kent State graduate, did his internship at Goldman Sachs. He is now a senior business analyst for the International Securities Exchange.

“I think for students that are looking to specialize in financial markets or anything that relates to derivatives, the MSFE program at Kent is a perfect fit,” Palmer said. “The faculty and the industry connection that the Kent State program specifically provides are irreplaceable.”

Parrish said Kent State’s program is highly respected in the financial engineering industry. She said Kent State is the only university invited to attend the Futures Industry Association Expo every year in Chicago. More than 3,000 industry executives from around the world attend the expo each year, providing students with excellent networking opportunities.

“Most of those said companies tend to offer: a) the internships to the students and b) more than likely, a possible full-time job opportunity afterwards,” Palmer said.

After graduation, MSFE students generally find jobs at exchanges, investment banks, hedge funds, trading firms, insurance companies or regulatory agencies. Parrish said Kent State graduates usually start out with salaries of about $75,000 a year, plus bonuses, but there are established alumni making $250,000 or more annually.

“As the intricacies of today’s financial world increase, the need and demand for highly qualified people trained in financial engineering have intensified,” Parrish said. “Kent State’s Master of Science in Financial Engineering grads are in greater demand today than ever before, especially since the market crash in 2008.”

The College of Business offers three other master’s level programs, but Parrish said no other master’s degree comes close to preparing students for financial engineering jobs as well as the MSFE program.

“A master in financial engineering is the application of mathematical methods to the solution of risk management problems,” Parrish said. “These students master the mathematics associated with derivatives and develop finance and economic modeling skills ranging from the basics of trading to the complexities of structured products.”

Palmer said if the Master in Financial Engineering had not been available, he would have gone to a different school. He said he would not have received the same education or practical experience at another school.

“I don’t believe [Goldman Sachs] currently provides many internships outside of the Ivy League universities,” Palmer said. “The education, experience and network that I received from the MSFE program provided me the opportunity to land a job with a major Wall Street firm.”

Contact Lyndsey Sager at [email protected].