WEBVTT - A College Cost-Cutting Road Map with Ron Lieber #337 0:00:00.120 --> 0:00:02.400 Welcome to How the Money. I'm Joel and I and 0:00:02.520 --> 0:00:06.199 Matt and today we're talking a college cost cutting roadmap 0:00:06.360 --> 0:00:27.880 with Ron Lieber. Yeah. Ron Lieber has been the Your 0:00:27.960 --> 0:00:30.440 Money columnist for The New York Times since two thousand 0:00:30.480 --> 0:00:32.360 and eight and is a three time winner of the 0:00:32.440 --> 0:00:36.520 Gerald Lobe Award, which is financial and business journalism's highest honor. 0:00:36.880 --> 0:00:39.440 He is the author of multiple books, including the recently 0:00:39.479 --> 0:00:42.440 released The Price You Pay for College, which is already 0:00:42.520 --> 0:00:45.800 a definitive guide to help parents and students think through 0:00:45.880 --> 0:00:49.159 important decisions when it comes to higher education. Uh. He 0:00:49.200 --> 0:00:51.240 lives in Brooklyn with his wife, who is also a 0:00:51.280 --> 0:00:53.920 New York Times journalist, and his two daughters. And Ron, 0:00:54.360 --> 0:00:57.440 thank you so much for joining us today on the podcast. Oh, 0:00:57.520 --> 0:01:01.280 it's so exciting to finally make my debut here. We 0:01:01.440 --> 0:01:03.480 we've been waiting for this, Ron, and you know, the 0:01:03.480 --> 0:01:05.399 publication this book was the perfect time to bring you 0:01:05.440 --> 0:01:07.680 on for sure. And uh yeah, the first question that 0:01:07.720 --> 0:01:09.959 we ask anybody who comes on the show though, Um, 0:01:10.240 --> 0:01:11.840 you know, Matt and I we like craft beer. That's 0:01:11.840 --> 0:01:13.640 one of the things we splurge on in here now 0:01:13.680 --> 0:01:16.240 while we're saving and investing for the future. But we 0:01:16.280 --> 0:01:19.920 want to know, like, what's your splurge, what's your craftier equivalent? Yeah, 0:01:19.920 --> 0:01:23.319 so beer hurts my belly turns out. Yeah, in my 0:01:23.360 --> 0:01:26.520 advancing age, it's it's not really agreeing with me, which 0:01:26.560 --> 0:01:32.000 is sort of unfortunate because right, yeah, I used to 0:01:32.040 --> 0:01:34.680 agree with it. So, you know, in general, and this 0:01:34.760 --> 0:01:38.400 is a non pandemic splurge. In general, I tend to 0:01:38.600 --> 0:01:43.960 splurge on live music experiences to the extent that it's possible. 0:01:44.080 --> 0:01:46.920 I do not really spare much expense or think much 0:01:47.040 --> 0:01:52.320 about what it costs. And well, I don't generally enjoy 0:01:52.440 --> 0:01:56.800 the process of embracing the you know, sort of ticket 0:01:56.920 --> 0:02:02.840 scalping economy. Gosh, ticketmasters. The word, um well ticketmaster, you know, 0:02:02.920 --> 0:02:07.560 on its own is a deeply problematic, problematic institution. Um, 0:02:07.600 --> 0:02:09.880 but you know, the markups on StubHub or whatever. You know, 0:02:09.919 --> 0:02:13.280 I would so much rather the artists get those, um 0:02:13.440 --> 0:02:16.560 extra dollars. But in any of it, right, Um, do 0:02:16.600 --> 0:02:18.440 you remember the last show you went to see before 0:02:18.760 --> 0:02:22.760 everything shut down? The last show I went to see 0:02:23.000 --> 0:02:28.200 Versus and then Versus the last splurge um that was required. 0:02:28.720 --> 0:02:30.360 You know, I think there was a whole steady show 0:02:30.400 --> 0:02:33.440 somewhere in there, close to the end. Um. I'm a 0:02:33.520 --> 0:02:35.680 huge fan of the whole study. Those tend not to 0:02:35.760 --> 0:02:39.920 be splurged tickets, you know. I I will splurge on Broadway, 0:02:40.680 --> 0:02:46.839 I will splurge on Springsteen. Those are generally the big splurges. Nice. Yeah, 0:02:46.880 --> 0:02:48.760 I get runs there at like the three Nights on 0:02:48.800 --> 0:02:54.440 a Row kind a show. He's like third Row every night. Well, yeah, 0:02:54.480 --> 0:02:57.320 I mean back in the day when when touring was possible, 0:02:57.760 --> 0:02:59.840 you know, I would go to you know, three dead shows. 0:03:00.040 --> 0:03:02.720 I've dead shows, two fish shows, right, you know, I'm 0:03:02.760 --> 0:03:07.359 I'm definitely a repeat customer for any rock and roll 0:03:08.200 --> 0:03:11.239 or related organization that does not repeat the set list 0:03:11.240 --> 0:03:14.480 from night. I love that. That's so good. Well, let's 0:03:14.520 --> 0:03:16.440 let's dive into your book. You know, we wanted to 0:03:16.520 --> 0:03:18.839 ask you, like what led you to write this book 0:03:18.840 --> 0:03:21.200 in the first place. You know, like you've written about money, 0:03:21.720 --> 0:03:23.560 but then specifically you know the price of college and 0:03:23.720 --> 0:03:26.400 student loans for years now. But you know, we were 0:03:26.440 --> 0:03:28.840 wondering as part of the you know, the impetus was 0:03:28.919 --> 0:03:31.760 having daughters and trying to figure this stuff out for yourself. 0:03:31.840 --> 0:03:34.400 Is that the case? Yeah, I'd say some of that's true. 0:03:34.520 --> 0:03:36.600 I mean, the art begins with the personal, but it 0:03:36.640 --> 0:03:39.240 sort of ends with the professional. Right. So I have 0:03:39.360 --> 0:03:41.320 my first kid in two thousand five. I've got two 0:03:41.400 --> 0:03:44.560 daughters now. One of them is fifteen high school freshman. Uh. 0:03:44.640 --> 0:03:47.000 The other one is five and and just started kindergarten, 0:03:47.320 --> 0:03:49.080 So you know, the ninth grader is kind of creeping 0:03:49.160 --> 0:03:50.920 up on this stuff. So when she was born in 0:03:50.920 --> 0:03:52.920 two thousand five, I was at the Wall Street Journal 0:03:53.160 --> 0:03:55.720 and began, naturally, as one does, to write a little 0:03:55.720 --> 0:03:59.880 bit more about how to save for college five nine plan. 0:04:00.280 --> 0:04:02.200 And they weren't so good at the time. There was 0:04:02.240 --> 0:04:04.640 a lot of mediocrity there, and so I spilled a 0:04:04.640 --> 0:04:07.000 little innk on that um two thousand and eight, two 0:04:07.000 --> 0:04:09.000 thousand nine, I've moved over to the New York Times. 0:04:09.560 --> 0:04:12.720 During that recession, a lot of people washed out of 0:04:12.800 --> 0:04:17.960 some pretty expensive undergraduate institutions with six figures of undergraduate 0:04:18.000 --> 0:04:21.800 student loan debt that they had not needed a cosigner 0:04:21.960 --> 0:04:25.839 for um. Things have changed a lot on the mechanics 0:04:25.880 --> 0:04:28.320 of how that happens or doesn't happen at this point, right, 0:04:28.320 --> 0:04:29.800 But there are a whole bunch of us who all 0:04:29.839 --> 0:04:33.120 of a sudden got radicalized around the you know, sort 0:04:33.120 --> 0:04:37.400 of ever growing um nationwide student loan balance. And for 0:04:37.440 --> 0:04:39.839 at least ten years now, I've written about student loans 0:04:39.920 --> 0:04:42.240 off and on, you know, to this day. But what 0:04:42.360 --> 0:04:44.960 happened to two thousand fifteen that really had nothing to 0:04:45.000 --> 0:04:47.200 do with me and everything to do with readers, is 0:04:47.240 --> 0:04:51.080 that my email inbox and my voicemail started to fill 0:04:51.200 --> 0:04:54.320 up an ever higher volume each spring with parents who 0:04:54.320 --> 0:04:57.440 are having three related problems. There were the parents who 0:04:57.640 --> 0:04:59.160 had just assumed they were going to get a bunch 0:04:59.200 --> 0:05:01.640 of financial aid or their kid and did not realize 0:05:01.720 --> 0:05:03.359 until the very end that they were not going to 0:05:03.400 --> 0:05:05.960 be eligible. And they had made a bunch of promises 0:05:06.000 --> 0:05:08.800 to their kids, um that they weren't sure they were 0:05:08.800 --> 0:05:11.239 gonna be able to keep anymore. So that was a problem. 0:05:11.400 --> 0:05:14.360 Second kind of parent, UM, they had been offered with 0:05:14.400 --> 0:05:17.480 their first or their only kid, this thing known as 0:05:17.600 --> 0:05:20.680 merit aid in the financial aid award letter, and they 0:05:20.680 --> 0:05:23.320 hadn't even realized they'd applied for this, didn't know what 0:05:23.360 --> 0:05:26.040 it was, college counselor hadn't explained it to them. And 0:05:26.080 --> 0:05:27.560 so they come to me and they're like, Ron, what 0:05:27.640 --> 0:05:29.800 what's this Merit aid stuff and can I get some 0:05:29.839 --> 0:05:31.839 more of it? Right? And you know, it's April twelve. 0:05:31.880 --> 0:05:33.640 I can't really do much for them at that point. 0:05:34.000 --> 0:05:36.040 So that troubled me. But what really put me over 0:05:36.080 --> 0:05:38.839 the edge was that I started to get calls from 0:05:38.880 --> 0:05:42.560 slightly more sophisticated parents, right, parents who had figured out 0:05:42.600 --> 0:05:44.480 the system. They had, they had, you know, sort of 0:05:44.839 --> 0:05:47.919 understood it and and known to do the research, but 0:05:48.000 --> 0:05:51.080 they were having a different set of challenges. Um. You know, 0:05:51.160 --> 0:05:54.839 imagine a New York State resident. Uh, the kid gets 0:05:54.880 --> 0:05:58.200 into Binghamton, which is you know, arguably the best or 0:05:58.200 --> 0:06:02.039 the flagship state university. Uh, the kid gets into Kenyan 0:06:02.120 --> 0:06:05.640 College in Ohio or Occidental College in Los Angeles, and 0:06:06.080 --> 0:06:08.080 they're they're not being asked to pay the full price. 0:06:08.120 --> 0:06:10.520 They get a Meritate package and so the school is 0:06:10.560 --> 0:06:13.159 going to cost them two hundred thousand dollars over four years. 0:06:13.400 --> 0:06:15.880 And then the kid manages to get into Cornell. You know, 0:06:15.920 --> 0:06:19.120 it's got an Ivy League invitation, but no discount there. 0:06:19.160 --> 0:06:21.920 That family earns let's call it, two hundred and fifty 0:06:21.920 --> 0:06:24.200 seven thousand dollars a year. Cry them a river, right, 0:06:24.279 --> 0:06:27.600 but they don't qualify for any need based state. So 0:06:27.640 --> 0:06:29.800 they said to me, Ron, your newspaper hasn't shut up 0:06:30.080 --> 0:06:31.680 about the fact that we live in the era of 0:06:31.720 --> 0:06:34.080 big data. Right, So where is the big data set 0:06:34.120 --> 0:06:37.440 that tells me how and why Cornell is a hundred 0:06:37.440 --> 0:06:40.800 thousand dollars better than Kenyan and two hundred thousand dollars 0:06:40.839 --> 0:06:44.120 better than Binghamton. And I had no idea, because the 0:06:44.120 --> 0:06:46.920 big data set doesn't exist. There isn't even a small 0:06:47.200 --> 0:06:49.960 data set on this stuff. And what I realized was 0:06:49.960 --> 0:06:54.440 that these readers were asking questions about value and values ultimately, 0:06:54.440 --> 0:06:56.680 because values are you know, part and parcel of how 0:06:56.680 --> 0:06:59.240 we make the value decision. And so for all the 0:06:59.279 --> 0:07:02.600 ink that I had build over how to save and 0:07:02.600 --> 0:07:05.320 how to pay, I had not gotten gotten it through 0:07:05.360 --> 0:07:08.640 my thick skull in the space of ten years. Right, 0:07:08.960 --> 0:07:11.880 that the most important question of all was what to 0:07:11.960 --> 0:07:14.400 pay for college. That's what these people were trying to 0:07:14.440 --> 0:07:17.120 figure out. And I had failed them to that point. 0:07:17.160 --> 0:07:18.760 And I realized that there was gonna be no way 0:07:19.040 --> 0:07:22.480 to answer that question in a newspaper column or in 0:07:22.600 --> 0:07:25.200 five or in ten and it was going to require 0:07:25.400 --> 0:07:31.120 a book, yeah, something more like pages. Right. Uh, Hey, Ron, 0:07:31.160 --> 0:07:33.440 we've We've all seen the chart that shows how the 0:07:33.440 --> 0:07:36.080 cost of college has been soaring over the past forty years, 0:07:36.080 --> 0:07:39.280 you know, talking about value, and everyone has been bending 0:07:39.320 --> 0:07:41.840 over backwards to try to explain why. But in your 0:07:41.840 --> 0:07:45.160 book you actually discuss how that stat is a little misleading. 0:07:45.160 --> 0:07:48.240 The college costs haven't been rising at maybe the clip 0:07:48.320 --> 0:07:50.480 that we we thought they've been rising at. Can you 0:07:50.520 --> 0:07:53.600 kind of explain that? Sure? So, you know, it gets 0:07:53.640 --> 0:07:58.080 complicated for many of my customers, right, I mean the readers, 0:07:58.080 --> 0:08:00.000 but I also think of them as customers because they've 0:08:00.000 --> 0:08:02.440 pay to subscribe to The New York Times and they 0:08:02.480 --> 0:08:07.920 pay dollars at the list price for a hardcover nonfiction book. Um, 0:08:07.960 --> 0:08:10.760 the demographics of those folks, you know, tend to be 0:08:11.000 --> 0:08:13.160 upper middle class. And the farther you get into the 0:08:13.240 --> 0:08:16.040 upper middle class, um, the less likely it is that 0:08:16.080 --> 0:08:19.200 you're going to be offered any need based financial aid. 0:08:19.600 --> 0:08:22.600 So many of those folks are anchored to the list 0:08:22.760 --> 0:08:25.720 price of schools because they think that's what's they're what 0:08:25.760 --> 0:08:29.360 they're going to pay. Now that's quite often not the case, 0:08:29.520 --> 0:08:31.440 but right that that's sort of what people anchor to, 0:08:31.520 --> 0:08:34.439 at least in my customer base. So they're thinking, okay, 0:08:34.480 --> 0:08:37.840 you know fifty most selective schools in America. I want 0:08:37.880 --> 0:08:40.440 the best for my kid. That's gonna be three grand 0:08:40.880 --> 0:08:43.800 right at the private um level. And you know, my 0:08:43.800 --> 0:08:46.960 flagship state university probably gonna cost a hundred thousand dollars 0:08:46.960 --> 0:08:48.800 by the time it's all over. What they do not 0:08:49.040 --> 0:08:53.680 realize is that the average discount at private colleges is 0:08:53.840 --> 0:08:58.719 over fifty and moreover or so of families are not 0:08:58.840 --> 0:09:02.280 paying the full price. And that includes a whole bunch 0:09:02.360 --> 0:09:05.880 of rich kids who are getting discounts anyway. Right, So 0:09:05.880 --> 0:09:08.360 when you say that to people, they're like, huh, how 0:09:08.360 --> 0:09:10.280 did that happen? And then you've got to spend like 0:09:10.320 --> 0:09:15.120 a minimum of ten minutes slowly and deliberately peeling back 0:09:15.160 --> 0:09:17.679 the layers of the ending. I mean, essentially, it's kind 0:09:17.720 --> 0:09:19.960 of like the difference between the sticker price and the 0:09:20.000 --> 0:09:23.000 actual costs that they pay, you know, so like, what's 0:09:23.000 --> 0:09:25.560 going on with this? Essentially it's like a charade. You know, 0:09:26.200 --> 0:09:29.360 why don't college is just like lower the actual tuition costs? Uh, 0:09:29.400 --> 0:09:30.920 you know, in the in the price, you know, the 0:09:30.920 --> 0:09:33.920 cost of education. In a more straightforward manner, like like 0:09:34.000 --> 0:09:35.960 why is it that we have these you know this 0:09:35.960 --> 0:09:38.319 this inflation kind of builds into the price of the 0:09:38.320 --> 0:09:41.400 sticker price in the massive discount. Yeah, yeah, exactly. Yeah, 0:09:41.559 --> 0:09:43.320 Well you sort of have to think about it like 0:09:43.360 --> 0:09:46.880 a business person, which we're not used to, you know, 0:09:47.240 --> 0:09:49.360 thinking of when we think of colleges, because we don't 0:09:49.400 --> 0:09:53.120 think of them as the viciously competitive institutions that they 0:09:53.200 --> 0:09:56.760 actually are. Right, there's a real competition to get the 0:09:56.800 --> 0:09:58.520 heads in the beds and to make sure you've got 0:09:58.559 --> 0:10:01.480 you know, the right net tuition revenue per per student 0:10:01.520 --> 0:10:03.640 to to to to make your numbers and and to 0:10:03.720 --> 0:10:06.760 make your budget. Um. So here's what's going on there. 0:10:06.760 --> 0:10:11.400 First of all, there is a perceived value question UM. 0:10:11.440 --> 0:10:14.160 That's kind of at the root of some of this. Um. 0:10:14.200 --> 0:10:17.560 It's referred to in the industry as the Chivists regal effect, 0:10:18.120 --> 0:10:20.920 and it goes like this, and this is a legend. Right. 0:10:21.120 --> 0:10:23.400 I was not able to confirm it with Chivists because 0:10:23.440 --> 0:10:25.520 they want to talk to me about it. But the 0:10:25.600 --> 0:10:28.160 way estrangely right, like any legend that has to do 0:10:28.200 --> 0:10:30.880 with a liquor, I'm I'm down for ye. Yeah, I 0:10:30.920 --> 0:10:33.000 guess they did not want to pierce the bubble of 0:10:33.960 --> 0:10:36.280 you know, whatever it was that they thought was over 0:10:36.320 --> 0:10:40.120 and around their brand. But as the legend goes, one day, 0:10:40.440 --> 0:10:43.680 many years ago, in a galaxy far far away, um, 0:10:43.720 --> 0:10:46.959 someone at chivist Regal decided to you know, double the 0:10:47.840 --> 0:10:52.480 price overnight to try and increase the brand sort of 0:10:52.520 --> 0:10:57.480 perceived value on on the liquor store shelf. And sure enough, um, 0:10:57.640 --> 0:11:03.000 the company's revenues you know, increased by like way more 0:11:03.040 --> 0:11:05.360 than they expected it to, because all of a sudden, 0:11:05.360 --> 0:11:08.679 people thought that Schivis Regal was better than it used 0:11:08.720 --> 0:11:13.640 to be, even though nothing changed inside the bottle. Right. 0:11:13.760 --> 0:11:18.440 And so the lesson that higher education professionals took from 0:11:18.440 --> 0:11:21.520 this is that if you have a high list price, 0:11:22.200 --> 0:11:26.600 people will think that you are worth something worth more. Right. 0:11:27.000 --> 0:11:29.880 And then when you give them a discount, particularly when 0:11:29.960 --> 0:11:33.280 they don't need the discount, right, particularly they can afford 0:11:33.360 --> 0:11:36.079 to pay the full price, that family will feel like 0:11:36.120 --> 0:11:38.440 they've gotten a bonus, maybe a gold star pat on 0:11:38.480 --> 0:11:43.280 the head for having raised a Yeah. Right, you know, 0:11:43.480 --> 0:11:46.880 this is marketing. This is marketing, and the other thing 0:11:47.000 --> 0:11:51.800 is um. At any given institution, particularly the more selective 0:11:51.800 --> 0:11:55.360 ones that still discount this way, they are always holding 0:11:55.440 --> 0:12:00.360 out hope that some percentage of people will will turn 0:12:00.480 --> 0:12:04.320 up each year who are in fact both willing and 0:12:04.600 --> 0:12:07.360 able to pay the full price and not just able. Right, 0:12:07.679 --> 0:12:10.760 And so what kind of family is that? Well, if 0:12:10.800 --> 0:12:13.960 you are a super affluent family and you have no 0:12:14.080 --> 0:12:17.240 idea that these discounts exist, and you don't really care 0:12:17.320 --> 0:12:19.840 all that much about money, and you're not careful, you'll 0:12:19.880 --> 0:12:22.040 just write the check, right, and you'll you'll never be 0:12:22.120 --> 0:12:24.360 the wiser. Right. So schools like to take advantage of 0:12:24.400 --> 0:12:27.920 families like that. Um, then there are the families who 0:12:28.000 --> 0:12:31.559 are like writing this check against the bank of thank god. Right, 0:12:31.640 --> 0:12:34.920 So you know, imagine yourself, Um, you know, just hoping 0:12:34.960 --> 0:12:37.880 against hope that your your your kid will go to 0:12:39.480 --> 0:12:42.520 two Lane University the same way that you did, right, 0:12:42.720 --> 0:12:45.640 And you know that the place is much more selective 0:12:45.640 --> 0:12:47.800 than it used to be. And maybe your kid has 0:12:47.840 --> 0:12:50.079 had a rough go of you know, freshman sophomore year 0:12:50.080 --> 0:12:52.520 in high school, but they've like totally turned it around. 0:12:52.600 --> 0:12:54.920 Junior year. They managed to get you know, a seat 0:12:54.960 --> 0:12:56.680 at an s a T test center and once you 0:12:56.720 --> 0:12:59.920 know it, they scored a fifteen twenty and to Lane says, 0:13:00.000 --> 0:13:02.120 you know what, we're going to take a shot on 0:13:02.120 --> 0:13:03.960 on your kid, and we're gonna give you the benefit 0:13:04.000 --> 0:13:06.640 of the the doubt. We believe in your family and you 0:13:06.679 --> 0:13:08.560 know in its tradition of coming to school here, but 0:13:08.960 --> 0:13:12.120 no discount for you. And you're like, wow, I can't 0:13:12.160 --> 0:13:14.640 believe we pulled this off. Um, the kid's gonna go 0:13:14.640 --> 0:13:16.600 to Tulane. We don't care what it costs, right, bank 0:13:16.679 --> 0:13:19.360 of thank God. And then they're all of these families 0:13:19.360 --> 0:13:21.720 from outside the United States, and you know, many of 0:13:21.760 --> 0:13:25.120 them are kazillionaires, and they don't care much about the 0:13:25.160 --> 0:13:28.040 price either. They just want a degree from a relatively 0:13:28.080 --> 0:13:31.320 brain brand name institution or you know, just one that 0:13:31.320 --> 0:13:33.959 says America on it. And if you can attract enough 0:13:34.000 --> 0:13:37.800 of those folks, particularly now that there is someone in 0:13:37.880 --> 0:13:41.160 the White House who is not as hostile um to 0:13:41.480 --> 0:13:43.880 people showing up here from outside of the United States 0:13:43.920 --> 0:13:47.440 in general, um, you have reason to hope. Right. So 0:13:47.480 --> 0:13:50.320 those are all the reasons you keep the list price high. Ron, 0:13:50.400 --> 0:13:54.360 Let's talk about college enrollment in COVID. Obviously we've seen 0:13:54.679 --> 0:13:57.640 college enrollment fall because of the pandemic, and you actually 0:13:57.960 --> 0:14:00.599 mentioned to study in your book that six professors and 0:14:00.600 --> 0:14:04.200 administrators have said that their courses are worse in virtual era. 0:14:04.760 --> 0:14:07.559 So how how do you think that college, Um, the 0:14:07.880 --> 0:14:12.800 college value proposition has changed because of COVID. Well, so, 0:14:13.400 --> 0:14:16.800 you know, we should stop and think about how we 0:14:16.960 --> 0:14:21.720 define decline, right, because in different tiers of undergraduate education, 0:14:21.760 --> 0:14:24.800 there's been different levels of decline. And at the you know, 0:14:24.880 --> 0:14:28.680 let's call it two D most selective colleges and institutions 0:14:28.680 --> 0:14:30.960 in America, the you know, the ones that have stayed 0:14:31.040 --> 0:14:34.600 open more or less, um, you know, have not seen 0:14:35.160 --> 0:14:39.200 huge declines, you know, sort of devastating revenue declines. And 0:14:39.240 --> 0:14:41.600 the thing that's interesting about it is that you know, 0:14:41.680 --> 0:14:43.480 people are showing up to pay the same price as 0:14:43.520 --> 0:14:45.120 they paid last year for the most part. You know, 0:14:45.120 --> 0:14:47.560 there's been a few discounts here and there, but but 0:14:47.640 --> 0:14:51.520 not many. Right, And so I guess here's what I 0:14:51.520 --> 0:14:55.480 have to say about that. Right, Um, what happened in 0:14:55.680 --> 0:15:00.960 the spring of is that everybody got sent home and 0:15:01.000 --> 0:15:02.960 all of a sudden, you know, the three main reasons 0:15:03.000 --> 0:15:06.640 for going to college, right, the education, the kinship you know, 0:15:06.680 --> 0:15:08.960 the friends you make in, the mentors you require, and 0:15:09.000 --> 0:15:11.640 the credential. Two of those things were stripped away. As 0:15:11.680 --> 0:15:14.720 you mentioned in the question, right, education got a lot worse. 0:15:14.880 --> 0:15:18.800 Everybody acknowledges that kinship is like blown to smithereens because 0:15:18.800 --> 0:15:21.720 you're not near your friends or your mentors anymore. Only 0:15:21.760 --> 0:15:26.040 the credential is left. And you know it's some question, uh, 0:15:26.160 --> 0:15:28.920 you know how much the credential matters? Right if you 0:15:28.960 --> 0:15:32.400 are a food and beverage major at Cornell University, right 0:15:32.440 --> 0:15:35.680 you're majoring in hotel management, you know, at Arizona State 0:15:35.760 --> 0:15:37.880 or something like, how much is that credential going to 0:15:37.960 --> 0:15:40.680 be worth right now? When those industries have been cut 0:15:40.680 --> 0:15:45.120 to ribbons? So you know, the the value is not 0:15:45.520 --> 0:15:50.800 what it once was, which makes it somewhat surprising, right 0:15:50.880 --> 0:15:53.560 that all of these people came running back to campus 0:15:54.000 --> 0:15:58.880 um in in August and September against all you know, 0:15:58.880 --> 0:16:01.440 sort of public health reason, and you know thousands and 0:16:01.480 --> 0:16:04.680 thousands and thousands of them got sick, right, So why 0:16:04.680 --> 0:16:06.960 did they do this? Well, you know, because the education 0:16:07.000 --> 0:16:10.720 had gotten worse, because the kinship was gone, and you know, 0:16:10.760 --> 0:16:14.480 people were desperate to continue to persist with this experience. Now, 0:16:14.840 --> 0:16:18.160 if I'm writing to check up to eighty thousand dollars 0:16:18.160 --> 0:16:21.600 a year, I ain't doing it. It doesn't doesn't make 0:16:21.640 --> 0:16:23.680 any sense to me right that this is this is 0:16:23.720 --> 0:16:26.280 not a normal college experience. This is not what I 0:16:26.320 --> 0:16:29.040 signed up for for my kids. And as somebody who 0:16:29.040 --> 0:16:33.120 wrote a book about gap years back in, I already 0:16:33.120 --> 0:16:35.560 think the college is wasted on most eighteen year old 0:16:35.680 --> 0:16:37.760 So you know, my kid is my kid is sitting 0:16:37.800 --> 0:16:40.240 this one out and and going to do something different 0:16:40.280 --> 0:16:42.360 for a while. Ron. This has been a great start 0:16:42.400 --> 0:16:43.920 to our conversation. We've got so much more when we 0:16:44.080 --> 0:16:45.880 talk about with you. I mean, we want to talk 0:16:45.920 --> 0:16:47.960 next about financial aid, you know, like how it is 0:16:48.360 --> 0:16:51.200 that parents and students can get that fifty discount like you, 0:16:51.320 --> 0:16:52.960 like you mentioned there earlier, And we're gonna get to 0:16:53.000 --> 0:17:04.360 all of that right after the break. All right, we're back. 0:17:04.400 --> 0:17:07.919 We're talking with Ron Lieber about how to get a 0:17:07.960 --> 0:17:11.280 better deal when you're going to college. And uh, you know, Ron, 0:17:11.480 --> 0:17:14.640 one of the things actually that that recently changed, um 0:17:15.400 --> 0:17:19.840 it was surrounded financial aid was the expected family contribution 0:17:20.000 --> 0:17:23.280 when you fill out the facts. Sadly that happened after 0:17:23.320 --> 0:17:25.879 the publication of your book, but you wrote about it 0:17:25.880 --> 0:17:27.840 in the New York Times. Um, since then, So what 0:17:27.920 --> 0:17:30.560 effect is that change in the fast they're gonna have 0:17:30.600 --> 0:17:34.760 on families? Sure. So let's start by, you know, framing 0:17:34.800 --> 0:17:36.840 what we're talking about here. We are talking about the 0:17:36.960 --> 0:17:40.600 need based financial aid system the facts that does not 0:17:40.840 --> 0:17:44.480 have much of anything to do with merit aid. Um, 0:17:44.720 --> 0:17:49.159 whole different way that meritate and those discounts are awarded. Right, 0:17:49.200 --> 0:17:51.120 So what we're talking about here is need based aid 0:17:51.440 --> 0:17:54.919 in order to get aid from the federal government. So 0:17:54.960 --> 0:17:57.280 in order to you know, access the PEL grant or 0:17:57.280 --> 0:18:01.160 the Federal student loan program or Federal Works Study funds 0:18:01.160 --> 0:18:04.000 for jobs on campus, or a parent plus loan, you've 0:18:04.000 --> 0:18:05.800 got to fill out one of these fafts of things. 0:18:05.920 --> 0:18:11.160 And people hate the facts. The FAFTSA is arguably more 0:18:11.240 --> 0:18:16.800 complicated than the ten forty income tax form, and you know, 0:18:16.880 --> 0:18:20.359 the kid gets involved and the parents are involved. Some 0:18:20.560 --> 0:18:23.280 parents refused to do it, and if you're a kid 0:18:23.280 --> 0:18:26.480 who's strange from your parents or a parent, it gets 0:18:26.560 --> 0:18:29.960 very complicated, you know, super super messy stuff. So, you 0:18:30.000 --> 0:18:32.160 know the most important thing that's happened is that the 0:18:32.160 --> 0:18:35.320 FAFTS is going to be simplified, which is a good thing. Right, 0:18:35.359 --> 0:18:37.439 It's gonna be easier to fill this thing out. A 0:18:37.480 --> 0:18:39.720 couple other things they are happening. Um, it's gonna be 0:18:39.800 --> 0:18:42.840 easier for more people to get pell grants, and the 0:18:42.880 --> 0:18:45.439 pell grants are going to get a little bit larger, right, 0:18:45.480 --> 0:18:49.000 so people with lower incomes gonna have an easier time. Now, 0:18:49.000 --> 0:18:52.080 there's some other things that are changing that have caused 0:18:52.359 --> 0:18:55.000 you know, people in the you know, middle class and 0:18:55.080 --> 0:18:57.879 upper middle class to wring their hands. One of the 0:18:57.920 --> 0:19:00.359 provisions has to do with the fact that at if 0:19:00.400 --> 0:19:03.119 you've got two kids in college at once, you're no 0:19:03.200 --> 0:19:05.760 longer going to get the same break that you used to. 0:19:06.080 --> 0:19:09.480 Now that's according to you know, the legislation, and the 0:19:09.520 --> 0:19:14.479 federal law doesn't mean that private colleges are necessarily going 0:19:14.520 --> 0:19:18.000 to do the same thing with their financial aid formulas. 0:19:18.200 --> 0:19:20.080 So if you're thinking about applying to a school that 0:19:20.200 --> 0:19:23.000 only relives on the fasts, you know, then you may 0:19:23.000 --> 0:19:24.680 need to be thinking about that if you've got two 0:19:24.760 --> 0:19:28.359 kids in their close in age. So much remains to 0:19:28.400 --> 0:19:30.160 be seen and you know sort of exactly how that's 0:19:30.200 --> 0:19:31.800 going to be interpreted, And there are a lot of 0:19:31.800 --> 0:19:35.000 people already trying to petition, you know, the federal government 0:19:35.119 --> 0:19:39.520 to uh to change that somehow, right, whether through legislation 0:19:39.960 --> 0:19:43.600 or some other form. So um, you know, remains to 0:19:43.640 --> 0:19:46.240 be seen. I think exactly how that one's going to 0:19:46.320 --> 0:19:48.760 play out, but it's definitely one to watch. Doesn't go 0:19:48.800 --> 0:19:50.959 into effect for another year and a half. Yeah, it's 0:19:50.960 --> 0:19:53.560 certainly a work in progress. It's kind of a moving target. 0:19:53.600 --> 0:19:57.040 I guess as you have kids, you know, approaching college age. Uh, 0:19:57.080 --> 0:19:58.960 and so yeah, you're you're talking about need based aid 0:19:59.000 --> 0:20:00.879 here and then earlier, you know, you detailed how the 0:20:00.920 --> 0:20:03.320 financial aid system has changed in recent years, and you know, 0:20:03.359 --> 0:20:05.679 let's talk about merit aid. Uh. So you know that 0:20:05.840 --> 0:20:07.560 is kind of the it seems that that's the predominant 0:20:07.560 --> 0:20:11.199 form of financial assistance these days. And so what is 0:20:11.240 --> 0:20:13.760 it that led to that change? And how com parents 0:20:13.800 --> 0:20:21.480 and students uh navigate getting more merit aid money? Sure? So, um, 0:20:21.520 --> 0:20:24.919 you know, I like that you phrase that question by 0:20:25.080 --> 0:20:28.440 pointing out the history because it gives an opportunity to 0:20:28.520 --> 0:20:31.680 sort of tell the story of um, not how it 0:20:31.800 --> 0:20:35.679 started exactly, but but how it spread and became so complicated. 0:20:35.840 --> 0:20:40.399 So imagine yourself in the state of Ohio in the 0:20:40.440 --> 0:20:43.160 early nineties, and there's a whole bunch of really good, 0:20:43.240 --> 0:20:46.200 you know, small liberal arts colleges, so many in fact, 0:20:46.240 --> 0:20:48.960 that they're really you know, beating the smithereens out of 0:20:49.000 --> 0:20:52.640 one another. Uh, you know too in the competition for students, 0:20:52.840 --> 0:20:55.760 and also a great public university system there. Right, So 0:20:55.800 --> 0:20:58.000 imagine being you know, kind of near the bottom of 0:20:58.000 --> 0:21:00.239 that food chain. You know, imagine being oh i oh 0:21:00.240 --> 0:21:04.560 Wesleyan University. You've developed a well earned reputation for um, 0:21:04.600 --> 0:21:06.720 you know, being a serious party school that is not 0:21:06.800 --> 0:21:10.280 particularly serious about other things. Uh. You want to increase 0:21:10.320 --> 0:21:13.600