A College Cost-Cutting Road Map with Ron Lieber #337

He is the author of multiple books, including the recently released The Price You Pay for College, which is already a definitive guide to help parents and students think through important decisions when it comes to higher education. Uh. He lives in Brooklyn with his wife, who is also a New York Times journalist, and his two daughters. And Ron, thank you so much for joining us today on the podcast. Oh,

it's so exciting to finally make my debut here. We we've been waiting for this, Ron, and you know, the publication this book was the perfect time to bring you on for sure. And uh yeah, the first question that we ask anybody who comes on the show though, Um, you know, Matt and I we like craft beer. That's one of the things we splurge on in here now while we're saving and investing for the future. But we want to know, like, what's your splurge, what's your craftier equivalent? Yeah,

so beer hurts my belly turns out. Yeah, in my advancing age, it's it's not really agreeing with me, which is sort of unfortunate because right, yeah, I used to agree with it. So, you know, in general, and this is a non pandemic splurge. In general, I tend to splurge on live music experiences to the extent that it's possible. I do not really spare much expense or think much about what it costs. And well, I don't generally enjoy the process of embracing the you know, sort of ticket

scalping economy. Gosh, ticketmasters. The word, um well ticketmaster, you know, on its own is a deeply problematic, problematic institution. Um, but you know, the markups on StubHub or whatever. You know, I would so much rather the artists get those, um extra dollars. But in any of it, right, Um, do you remember the last show you went to see before everything shut down? The last show I went to see Versus and then Versus the last splurge um that was required.

You know, I think there was a whole steady show somewhere in there, close to the end. Um. I'm a huge fan of the whole study. Those tend not to be splurged tickets, you know. I I will splurge on Broadway, I will splurge on Springsteen. Those are generally the big splurges. Nice. Yeah, I get runs there at like the three Nights on a Row kind a show. He's like third Row every night. Well, yeah, I mean back in the day when when touring was possible, you know, I would go to you know, three dead shows.

I've dead shows, two fish shows, right, you know, I'm I'm definitely a repeat customer for any rock and roll or related organization that does not repeat the set list from night. I love that. That's so good. Well, let's let's dive into your book. You know, we wanted to ask you, like what led you to write this book in the first place. You know, like you've written about money, but then specifically you know the price of college and

student loans for years now. But you know, we were wondering as part of the you know, the impetus was having daughters and trying to figure this stuff out for yourself. Is that the case? Yeah, I'd say some of that's true. I mean, the art begins with the personal, but it sort of ends with the professional. Right. So I have my first kid in two thousand five. I've got two

daughters now. One of them is fifteen high school freshman. Uh. The other one is five and and just started kindergarten, So you know, the ninth grader is kind of creeping up on this stuff. So when she was born in two thousand five, I was at the Wall Street Journal and began, naturally, as one does, to write a little bit more about how to save for college five nine plan.

And they weren't so good at the time. There was a lot of mediocrity there, and so I spilled a little innk on that um two thousand and eight, two thousand nine, I've moved over to the New York Times. During that recession, a lot of people washed out of some pretty expensive undergraduate institutions with six figures of undergraduate student loan debt that they had not needed a cosigner

for um. Things have changed a lot on the mechanics of how that happens or doesn't happen at this point, right, But there are a whole bunch of us who all of a sudden got radicalized around the you know, sort of ever growing um nationwide student loan balance. And for at least ten years now, I've written about student loans

off and on, you know, to this day. But what happened to two thousand fifteen that really had nothing to do with me and everything to do with readers, is that my email inbox and my voicemail started to fill up an ever higher volume each spring with parents who are having three related problems. There were the parents who had just assumed they were going to get a bunch of financial aid or their kid and did not realize until the very end that they were not going to

be eligible. And they had made a bunch of promises to their kids, um that they weren't sure they were gonna be able to keep anymore. So that was a problem. Second kind of parent, UM, they had been offered with their first or their only kid, this thing known as merit aid in the financial aid award letter, and they hadn't even realized they'd applied for this, didn't know what

it was, college counselor hadn't explained it to them. And so they come to me and they're like, Ron, what what's this Merit aid stuff and can I get some more of it? Right? And you know, it's April twelve. I can't really do much for them at that point. So that troubled me. But what really put me over the edge was that I started to get calls from slightly more sophisticated parents, right, parents who had figured out

the system. They had, they had, you know, sort of understood it and and known to do the research, but they were having a different set of challenges. Um. You know, imagine a New York State resident. Uh, the kid gets into Binghamton, which is you know, arguably the best or the flagship state university. Uh, the kid gets into Kenyan College in Ohio or Occidental College in Los Angeles, and they're they're not being asked to pay the full price.

They get a Meritate package and so the school is going to cost them two hundred thousand dollars over four years. And then the kid manages to get into Cornell. You know, it's got an Ivy League invitation, but no discount there. That family earns let's call it, two hundred and fifty seven thousand dollars a year. Cry them a river, right, but they don't qualify for any need based state. So they said to me, Ron, your newspaper hasn't shut up about the fact that we live in the era of

big data. Right, So where is the big data set that tells me how and why Cornell is a hundred thousand dollars better than Kenyan and two hundred thousand dollars better than Binghamton. And I had no idea, because the big data set doesn't exist. There isn't even a small data set on this stuff. And what I realized was that these readers were asking questions about value and values ultimately, because values are you know, part and parcel of how

we make the value decision. And so for all the ink that I had build over how to save and how to pay, I had not gotten gotten it through my thick skull in the space of ten years. Right, that the most important question of all was what to pay for college. That's what these people were trying to figure out. And I had failed them to that point. And I realized that there was gonna be no way to answer that question in a newspaper column or in five or in ten and it was going to require

a book, yeah, something more like pages. Right. Uh, Hey, Ron, we've We've all seen the chart that shows how the cost of college has been soaring over the past forty years, you know, talking about value, and everyone has been bending over backwards to try to explain why. But in your book you actually discuss how that stat is a little misleading. The college costs haven't been rising at maybe the clip that we we thought they've been rising at. Can you

kind of explain that? Sure? So, you know, it gets complicated for many of my customers, right, I mean the readers, but I also think of them as customers because they've pay to subscribe to The New York Times and they pay dollars at the list price for a hardcover nonfiction book. Um, the demographics of those folks, you know, tend to be upper middle class. And the farther you get into the upper middle class, um, the less likely it is that you're going to be offered any need based financial aid.

So many of those folks are anchored to the list price of schools because they think that's what's they're what they're going to pay. Now that's quite often not the case, but right that that's sort of what people anchor to, at least in my customer base. So they're thinking, okay, you know fifty most selective schools in America. I want the best for my kid. That's gonna be three grand

right at the private um level. And you know, my flagship state university probably gonna cost a hundred thousand dollars by the time it's all over. What they do not realize is that the average discount at private colleges is over fifty and moreover or so of families are not paying the full price. And that includes a whole bunch of rich kids who are getting discounts anyway. Right, So when you say that to people, they're like, huh, how

did that happen? And then you've got to spend like a minimum of ten minutes slowly and deliberately peeling back the layers of the ending. I mean, essentially, it's kind of like the difference between the sticker price and the actual costs that they pay, you know, so like, what's going on with this? Essentially it's like a charade. You know, why don't college is just like lower the actual tuition costs? Uh, you know, in the in the price, you know, the

cost of education. In a more straightforward manner, like like why is it that we have these you know this this inflation kind of builds into the price of the sticker price in the massive discount. Yeah, yeah, exactly. Yeah, Well you sort of have to think about it like a business person, which we're not used to, you know, thinking of when we think of colleges, because we don't think of them as the viciously competitive institutions that they

actually are. Right, there's a real competition to get the heads in the beds and to make sure you've got you know, the right net tuition revenue per per student to to to to make your numbers and and to make your budget. Um. So here's what's going on there. First of all, there is a perceived value question UM. That's kind of at the root of some of this. Um. It's referred to in the industry as the Chivists regal effect, and it goes like this, and this is a legend. Right.

I was not able to confirm it with Chivists because they want to talk to me about it. But the way estrangely right, like any legend that has to do with a liquor, I'm I'm down for ye. Yeah, I guess they did not want to pierce the bubble of you know, whatever it was that they thought was over

and around their brand. But as the legend goes, one day, many years ago, in a galaxy far far away, um, someone at chivist Regal decided to you know, double the price overnight to try and increase the brand sort of perceived value on on the liquor store shelf. And sure enough, um, the company's revenues you know, increased by like way more than they expected it to, because all of a sudden, people thought that Schivis Regal was better than it used

to be, even though nothing changed inside the bottle. Right. And so the lesson that higher education professionals took from this is that if you have a high list price, people will think that you are worth something worth more. Right. And then when you give them a discount, particularly when they don't need the discount, right, particularly they can afford to pay the full price, that family will feel like they've gotten a bonus, maybe a gold star pat on

the head for having raised a Yeah. Right, you know, this is marketing. This is marketing, and the other thing is um. At any given institution, particularly the more selective ones that still discount this way, they are always holding out hope that some percentage of people will will turn up each year who are in fact both willing and able to pay the full price and not just able. Right,

And so what kind of family is that? Well, if you are a super affluent family and you have no idea that these discounts exist, and you don't really care all that much about money, and you're not careful, you'll just write the check, right, and you'll you'll never be the wiser. Right. So schools like to take advantage of families like that. Um, then there are the families who

are like writing this check against the bank of thank god. Right, So you know, imagine yourself, Um, you know, just hoping against hope that your your your kid will go to two Lane University the same way that you did, right, And you know that the place is much more selective than it used to be. And maybe your kid has had a rough go of you know, freshman sophomore year in high school, but they've like totally turned it around.

Junior year. They managed to get you know, a seat at an s a T test center and once you know it, they scored a fifteen twenty and to Lane says, you know what, we're going to take a shot on on your kid, and we're gonna give you the benefit of the the doubt. We believe in your family and you know in its tradition of coming to school here, but no discount for you. And you're like, wow, I can't believe we pulled this off. Um, the kid's gonna go to Tulane. We don't care what it costs, right, bank

of thank God. And then they're all of these families from outside the United States, and you know, many of them are kazillionaires, and they don't care much about the price either. They just want a degree from a relatively brain brand name institution or you know, just one that says America on it. And if you can attract enough of those folks, particularly now that there is someone in the White House who is not as hostile um to people showing up here from outside of the United States

in general, um, you have reason to hope. Right. So those are all the reasons you keep the list price high. Ron, Let's talk about college enrollment in COVID. Obviously we've seen college enrollment fall because of the pandemic, and you actually mentioned to study in your book that six professors and administrators have said that their courses are worse in virtual era. So how how do you think that college, Um, the

college value proposition has changed because of COVID. Well, so, you know, we should stop and think about how we define decline, right, because in different tiers of undergraduate education, there's been different levels of decline. And at the you know, let's call it two D most selective colleges and institutions in America, the you know, the ones that have stayed open more or less, um, you know, have not seen

huge declines, you know, sort of devastating revenue declines. And the thing that's interesting about it is that you know, people are showing up to pay the same price as they paid last year for the most part. You know, there's been a few discounts here and there, but but not many. Right, And so I guess here's what I

have to say about that. Right, Um, what happened in the spring of is that everybody got sent home and all of a sudden, you know, the three main reasons for going to college, right, the education, the kinship you know, the friends you make in, the mentors you require, and the credential. Two of those things were stripped away. As you mentioned in the question, right, education got a lot worse. Everybody acknowledges that kinship is like blown to smithereens because

you're not near your friends or your mentors anymore. Only the credential is left. And you know it's some question, uh, you know how much the credential matters? Right if you are a food and beverage major at Cornell University, right you're majoring in hotel management, you know, at Arizona State or something like, how much is that credential going to be worth right now? When those industries have been cut

to ribbons? So you know, the the value is not what it once was, which makes it somewhat surprising, right that all of these people came running back to campus um in in August and September against all you know, sort of public health reason, and you know thousands and thousands and thousands of them got sick, right, So why did they do this? Well, you know, because the education had gotten worse, because the kinship was gone, and you know,

people were desperate to continue to persist with this experience. Now, if I'm writing to check up to eighty thousand dollars a year, I ain't doing it. It doesn't doesn't make any sense to me right that this is this is not a normal college experience. This is not what I

signed up for for my kids. And as somebody who wrote a book about gap years back in, I already think the college is wasted on most eighteen year old So you know, my kid is my kid is sitting this one out and and going to do something different for a while. Ron. This has been a great start to our conversation. We've got so much more when we

talk about with you. I mean, we want to talk next about financial aid, you know, like how it is that parents and students can get that fifty discount like you, like you mentioned there earlier, And we're gonna get to all of that right after the break. All right, we're back. We're talking with Ron Lieber about how to get a

better deal when you're going to college. And uh, you know, Ron, one of the things actually that that recently changed, um it was surrounded financial aid was the expected family contribution when you fill out the facts. Sadly that happened after the publication of your book, but you wrote about it in the New York Times. Um, since then, So what effect is that change in the fast they're gonna have on families? Sure. So let's start by, you know, framing

what we're talking about here. We are talking about the need based financial aid system the facts that does not have much of anything to do with merit aid. Um, whole different way that meritate and those discounts are awarded. Right, So what we're talking about here is need based aid

in order to get aid from the federal government. So in order to you know, access the PEL grant or the Federal student loan program or Federal Works Study funds for jobs on campus, or a parent plus loan, you've got to fill out one of these fafts of things. And people hate the facts. The FAFTSA is arguably more complicated than the ten forty income tax form, and you know,

the kid gets involved and the parents are involved. Some parents refused to do it, and if you're a kid who's strange from your parents or a parent, it gets very complicated, you know, super super messy stuff. So, you know the most important thing that's happened is that the FAFTS is going to be simplified, which is a good thing. Right, It's gonna be easier to fill this thing out. A

couple other things they are happening. Um, it's gonna be easier for more people to get pell grants, and the pell grants are going to get a little bit larger, right, so people with lower incomes gonna have an easier time. Now, there's some other things that are changing that have caused you know, people in the you know, middle class and

upper middle class to wring their hands. One of the provisions has to do with the fact that at if you've got two kids in college at once, you're no longer going to get the same break that you used to. Now that's according to you know, the legislation, and the federal law doesn't mean that private colleges are necessarily going to do the same thing with their financial aid formulas.

So if you're thinking about applying to a school that only relives on the fasts, you know, then you may need to be thinking about that if you've got two kids in their close in age. So much remains to be seen and you know sort of exactly how that's going to be interpreted, And there are a lot of people already trying to petition, you know, the federal government to uh to change that somehow, right, whether through legislation or some other form. So um, you know, remains to

be seen. I think exactly how that one's going to play out, but it's definitely one to watch. Doesn't go into effect for another year and a half. Yeah, it's certainly a work in progress. It's kind of a moving target. I guess as you have kids, you know, approaching college age. Uh, and so yeah, you're you're talking about need based aid here and then earlier, you know, you detailed how the financial aid system has changed in recent years, and you know,

let's talk about merit aid. Uh. So you know that is kind of the it seems that that's the predominant form of financial assistance these days. And so what is it that led to that change? And how com parents and students uh navigate getting more merit aid money? Sure? So, um, you know, I like that you phrase that question by pointing out the history because it gives an opportunity to sort of tell the story of um, not how it started exactly, but but how it spread and became so complicated.

So imagine yourself in the state of Ohio in the early nineties, and there's a whole bunch of really good, you know, small liberal arts colleges, so many in fact, that they're really you know, beating the smithereens out of one another. Uh, you know too in the competition for students, and also a great public university system there. Right, So imagine being you know, kind of near the bottom of that food chain. You know, imagine being oh i oh

Wesleyan University. You've developed a well earned reputation for um, you know, being a serious party school that is not particularly serious about other things. Uh. You want to increase your prestige because a lot of families just won't go near you, um because you know they think their kids will end up being alcoholics. Right, So you've got to

do something about this situation. Um, So what you do is, you know, after this year's crop of kids take the p s a t s. You start going out and you buy the names of the kids who have better p s a t scores and the kids you normally attract into your applicant of pool, and you send them a note saying, hey, we've got we've got our eye on you. We know you're special. If you apply here, and we'll let you apply here for free with no

application fee. If you apply over here, we'll give you ten thousand dollars if you come off off the off the list price. Right, no matter how much money your family has, no matter how much money your family needs. Right, So somebody starts going and throwing around, um, five figures of money when nobody else is doing that, that's going

to have an impact. Right. It worked. It works so well that competitors had to respond in kind because Dennison did not like Ohio Wesley and stealing more than its fair share of students, and Kenyan didn't like Dennison stealing kids, and um, you know, Kenyan didn't like College of Worcester doing the same thing either, And then Oberlin got really annoyed that Kenyan started to do it, and pretty soon everybody in the state of Ohio is doing this, and

it spreads not quickly but over time. So, right, you flash forward twenty years or so, and all but the fifty or sixty most selective colleges and universities, both public

and private. That works a little differently, public and private, All but the fifty or sixty most selectives in the country are offering at least some meritid Right, So you take that enormous list of schools that are doing this, and those two divide up into segments right, there are the schools that only offer merit aid to a couple of dozen people a year. Then their schools that only offer it to a couple hundred of you know, new

entrants a year. Then it's you know, schools that offer it to maybe half of the new people who come in each year. And then there are schools now where everybody gets a pony, right, where everybody gets a pat on the head. And the challenge for families is to figure out ahead of time which kind of school you're dealing with, what sort of reasonable expectation they ought to have, you know, for a discount offer, and how to sort

that out. And it is not easy. It's another five or ten minutes of you know, verbiage to kind of even begin to explain to people how to sort it out, all right, So it does kind of beg the question, how how can people find out what sort of merit aid they're likely to receive from a college are interested in.

I don't, I don't want to, you know, make you drawn on for ten minutes necessarily, but that is the question that people are going to ask, Like, if I'm interested in particular college, how do I know what sort of you know, aid to expect. Yeah, so there are

a couple of things that people should know. UM. First of all, the Net Price Calculator, which all schools are required to have on their websites somewhere, is a way to predict what kind, if any, of need based financial aid you will be offered, so totally worth filling those out. In some instances, the schools will allow you to input your g p A and your test scores and will attempt to predict what kind of merit aid offer you

might get as well. So it's worth checking the Net Price Calculator to see if it is in fact a merit aid prediction engine. In most instances it is not, but sometimes it is, so you know, worth a shot. So that's number one. Number two, by all means, check the college's website UM to see if they say, you know, what percentage of people got merit aid last year, what

sort of characteristics did they have? At some of the more hard up schools, um Wabash College in Indiana, Lake Forest in Illinois, the University of Alabama does this as well. They just tell you straight up in like a grid chard, you know, if you got a thirty four on your A C. T. And a three point nine g p A. Um, you know, this is how much of a discount you'll

be offered. And so that causes a lot of people who really want to, you know, go to the University of Alabama to take their S A T S six times to you know, sort of try to get their score high enough to get the better deal is you know, so it has some unintended effects. Uh. Next step, and this is not the last step, because why should this be simple work at all? Um? The next step involves looking for something called the Common Data Set, which most

but not all schools make available. The Common Data Set contains all of the information that these schools pass on to ranking organizations like US News and World Report. Um, it's worth reading the entire Common Data Set if you are even at all interested in any institution, no matter how much you are able or willing to pay, because

there's all sorts of terrific data in there. But in section H two A, H yes, yes, yeah right, it's like, um, you just like go right to H two A, and that will give you some information about how much meritide is being offered to families who have no financial need whatsoever. So that's a pretty good indicator of what's going on, you know, is the school offering meridiate to everybody who has no need or just like you know, ten percent

of the people who have no need? And what are the characteristics of the people in the class in every entering class who are are in the top um, you know, what's their g p A, what's their test scores? That is information you can get from the common data set. And so from there you can begin to sort of guess, right, what is going to happen. This is not the end. There's at least two more steps, shall we yea, let's

do alright? Two more steps? All right? Um, because this is so confusing because I have had to prattle on for so long, not one, not to not three, but four that I know of for profit entities have started up just in the last couple of years to try to provide some predictability um or match making around this. Uh tuition fit dot com. That was the one that seemed the most like the coolest idea from from what

I read in your book, like tuition fit seems awesome. Yeah, so the big idea is like you send in your you know, award letter to tuition fit it anonymizes everything, puts it into a database, and then all of a sudden, Um, you've got some context. Right, So you know, Dennison College Dennison University in Ohio offers you, uh, you know, twenty one dollars off and you've got a you know, thirty

two on your on your a C T. Uh. You can go in there and see, oh, look there's a there's a student with statistics like mine and and she got twenty five thousand dollars off. And uh, I'm a boy, right, so should I be more valuable because Dennison's like female or like what's going on here? Right? You know the fact that I play an oboe and and maybe she doesn't like Z can a matter? It couldn't matter, right, you know, you know it gives you a little bit

of anecdotal context. You know, it's not like scientifically, but get yeah, you get to hear from people. It's sort of like glass door, but for colleges. That's a really good comparison. It's about like that. And then um, there's a company called edmund E d M I T. There's a new one called merit More. And Debbie Schwartz, who runs the Pain for college one oh one Facebook group, which is indispensable to my mind for anybody who wants

to geek out on this um. She's got her own um hustle there where she u has some merit aid prediction figures that she generates using common data sets and other tools. Right, so there's like four startups in the area. And then finally right, I want all of my readers to act and behave as if we exist in the world that we wanted to be, and not the world as it is. So I'm encouraging everybody. I'm trying to

raise an army. Essentially. I think everybody should innocently, but not so innocently, call these schools each September and say, hey, I don't have any real way to predict what kind of merit aid my kid might be offered here, And you seem to think that I should be willing to apply without having any idea what the price is. And that doesn't really make a lot of sense to me. Doesn't make sense to you, No, I didn't think it

made any sense. Can you give me just a you know, non binding merit aid preread given my kids you know, activities and s A T S and g p A and if they won't do it, if they refused to, then you might say, oh, that's so interesting because College of Worcester has been doing that for years and Whitman College just started doing it a year ago, and you don't want to do that? Huh? Why? I love I love that tip, Ron, because it's really it's taken things into your own hands and saying and kind of asking

for the information when it's not readily available. I think I think that's like wonderful advice. I mean, exactly, tell them I sent you and if they won't um, and if they won't cough up the information, come and tell me at Ron Liebert dot com and I'll call them up. I'll call them. I love that. The fifth point here is is the Ron lieberway, which is this is uh calling for more transparency when it comes to meritate and marketologies.

I love it. Uh. Well, you know, let's let's talk about real quickly here, like getting what you pay for. You know, you spend a lot of time in your book writing about value. We're all about getting you know, the most bang for your buck when it comes to higher education. So like, what should students and parents be looking for? In a college. And I know you cover a lot of this in your book, so if you want to pages dedicated to it, but if you wanted to pict like a few of your favorites here, I'm

curious to to hear your thoughts here. Well, it starts with the framing question. Right, Um, you can't have that conversation before you have defined what college means to you. And this is not some like existential philosophy one on

one exercise. It's actually a real non rhetorical question because what I found repeatedly as I ran laps of the country was that there were a whole bunch of people out there or you know, flinging hundreds of thousands of dollars around, that hadn't really stopped to ask themselves like what is the definition of success here? And how much is enough? Right? What is college for? Anyway? And it turns out the colleges for three things we name checked

him before. Right, college is about the intellectual roller coaster ride, It's about the learning. It's about having your brain broken apart and then reassembled by an expert practitioner into like a bigger, better version of what it used to be. Right, So, college is about the education. Number one. Number two, College is about the kinship. It's about finding the people you never could have imagined existing in the world and making them your best friends who will pick you up on

their shoulders and carry you through life. And it's about finding the mentors um who will do the same thing. But maybe they're like dragging you by the neck, you know, into a bigger and better version of yourself. Right, So that's number two. Number three is the credential. Maybe it's a baseline credential that allows you to you know, grasp hold of the middle class in a way that your

family has not been able to before. Or maybe you're reaching way up high for like the super name brand institution where the degree will mean something in an industry that your family or your community has absolutely no hope

of ever accessing without that degree. Right, So you've got to know what you're coming for and and once you do, you can shop for that right Because if you could care less about learning anything, then it doesn't matter whether there are graduate students teaching all of the introductory level courses,

because that's not what you're there for. Right, Like, imagine yourself as the you know, third generation child of a casket owning manufacturer in Southern Indiana, right, and you're gonna go to the right So you're gonna go Yeah, so you're gonna go to the Did you know the Southern Indianas like the world capital of casket manager. No, no, no, no way, no way. Back when I was at Fast Company Magazine in the nineties, I went to visit one

of the casket companies. It was awesome. Um, you can put that story in the show notes of you will so right. So, so, you're going to the Kelly School of Business, flagship State School, Indiana University undergraduate and you really care about the learning because you're gonna learn what you need to know on the job right from your parents, from your grandparents. Right, They're gonna teach you everything that

you need to know. What you really want out of the Kelly School Business is not the credential, because the credential doesn't mean much. You just want to build the best possible network, right. You want a whole bunch of people who are gonna know you, remember you, and when they die or their parents die, they're gonna get your casket. They're gonna call you up. You're going to offer them the friends and family discount code, and your Family Casket Company is going to be known because you were in

the most social sorority. You were in the most business oriented fraternity. You are at the Kelly School of Business for the kinship and the kinship alone. Right, So that's a way to shop and I totally approve of that. Do whatever you want, right, but don't go into the process without having asked the fundamental question and answered it

about what college is for. I love that. All right, Hey, Ron, we got a few more super practical questions about uh, cutting college costs, and we'll get to those right after

this break. All Right, we are back. We're talking with Ron Lieber and his most recent book, The Price You Pay for College, And you know, Ron, before the break, we're talking about financial aid, and now we're going to kind of dive into some more practical advice to maybe potentially get the price down on college and real quick. You know, you mentioned in the first section there the gap year. You said you mentioned you wrote a book back in about the gap year. Do you feel that

that's a good idea? Is is a gap here a good idea for folks to potentially save some money, to not burn, not waste that first year in college and then specifically to UH and you're like, now with COVID, does it make even more sense you know, due to the pandemic. Yes, yes, one thousand times yes. And if we're gonna limit it just to you know, kind of pushing that the answer through a financial prism, like, let

me try and do it that way. So you know, first the obvious, right, if you can stay in your house if it's safe to do so, you know, psychologically and physically, and it's not for every every kid and every family. Um, if your parents or parents are willing to let you live there, hopefully rent free, maybe even continue to provide the food. Right, you can go work for twelve months and make twenty grand and you know, put it away and that that's that's one five of

of the cost of college. You know, most flagship state universities. That's a big deal, right, go do that if you need the money. Um, you can work for nine months and you know, save half the money and take the other half and go have an adventure someplace. Um, these are things that you can do, and so you know, it's it's worthwhile for all all sorts of develop developmental

reasons which will leave aside for now. Um, but if you believe in extracting the most value that you possibly can from the classroom in particular, people who take gap years get better grades than those who don't. This has not been proven with like real PhDs connecting science on the matter. Right, So, um, you know, if you want to extract more value from the education, take a gap year,

go to college when you're nineteen, not when you're eighteen. Uh, there still seems to be the possibility that, you know, the private colleges and universities in particular will give you a better deal on financial aid if they don't follow the you know, the new federal formula if you have um overlap. Right, So, if you've got a sibling and you are three years older than your sibling, if you take a gap year, you're essentially adding one more year to the potential years of overlap where the two of

your in college. If your sibling does not take a gap here, Um, so you want to think about that too, you could literally, you know, create another five figure is worth of need based aid eligibility for some families if the privates continue to run their aid formulas the same way. So, that's a lot of ifs, right, So they're assuming that we're thinking about it, your younger brother or sister might also go to the same school, and that's why they're

gonna offer you more money. So just in general, the way the formula works now, um, and this is what the facts that proposes to change. But the you know, private universities may not follow it is that you know, logic would dictate if you've got two kids in college at once, you can afford to pay less than if

you only have one kid in college at once. Right, So if you increase the number of years of overlap, that increases the number of years that you have those extra discounts, assuming both colleges are kind of operating with similar formulas. Gotcha. Yeah, so Ron community college at least for a couple of years of your college education has always been a popular suggestion as a way for people to save money. But you actually say that going that route could cost you more than it saves. Why is that.

I am not trying to discourage people from going to community college. I am only trying to make sure that people are realistic about what actually happens. Right. So the fact of the matter is that it's a pretty small percentage of people who started community college with the intent of getting to for year school, um, you know, and and graduated a reasonable period of time. It's a small pretendage to people who actually pull it off. So if you're doing this as a hack right, as a way

to save money, I'm all for it. But you need to go in with eyes wide open. And here's what that means, right. You've got to show up with a full head esteem. You've got to have an intended destination in mind, preferably a a you know, major at that school. UM. You've got to know at the very beginning what classes you're going to need at the community college. You need to be first in line to make sure you get

those classes. If you're going to be working for money on the side, you need to have a job that you know allows you to to put your your classes, you know, priority one, right, So you get all your classes and you're constantly in touch with an advisor at the community college to make absolutely sure that these classes are going to transfer to your intended destination. You have a different advisor at the destination UM in the admissions office,

checking in with you three times a term. To make sure that nothing's changed, everything's on track, you're gonna get your credit um and then if you know that you want to be a computer science major at the intended destination, you've got to be certain that the chair of that comp side department is absolutely positively going to improve it, going to approve your prerequisites, because if you've got to retake a bunch of stuff, then it takes longer, you're

spending more money and the savings is decreased. So you know, it's not always simple. That's so smart. Yeah, it kind of goes back to knowing your why. Like as long as you can keep in mind what like why it is that you are going to the community college, and you keep that forefront of your mind, then yeah, it

could be a great hack. Like you said, uh right, Is is there a good rule of thumb like for how many school that families should visit or apply to in order to make sure that you know they're getting the getting the best price possible. Yeah, you know, I'm struggling with this some personally because my daughters in ninth grade. I don't take much stock in this notion that you're gonna do damage to your children by talking to them about college, you know, before their junior year, that it's

like too much, too soon, too much pressure. I mean, these kids live in the world. They already understand that, um, you know, college exists, and they're thinking about it and excited about it. And so you know, I might take our daughter to you know, see her first school sort of informally in a couple of weeks actually, um, you know, in the second half of her first year in high school.

So like yeah, right, Well, it's just you know, it's it literally pays to to tour these places carefully and not rush around on a tour in an information session and in and out in three hours, right, And so that takes time. Right, It takes money, and it takes resources too if you're doing it in person, but it certainly takes time. I'm to like really do the homework on you know, a couple of dozen places to begin

to think like, huh, you know, big versus small. Maybe I should go see some places, right, urban versus rural, right, single sex, non single sex right, small lebal arts you know, large enormous university, right, So you know, we can take a year or two to kind of narrow that down or begin to think about it, and then right, particularly this year and last year to this was the case.

You know, there there there's a higher probability of like outsize surprises financially because all the algorithms that the school's normally use to you know, offer up discounts and you know, sort people out. Um, they're having trouble predicting how people are going to behave in the middle of a global pandemic. No surprise there, right, And so schools that come up real short in March and able to start to get worried, you know, they're gonna throw a lot of money around

and they just might throw it at you. And so you know, the more schools you've apply to, the better chance you have of having some kind of awesome financial surprise. Nice. Uh, and all, we got one more question for you, Iron you talk about independent college counselors Towards the end of the book, When does it make sense for a family to hire someone to help them make these big decisions because obviously your book is like pages long, um, and it feels like one of these things for a lot

of families that's overwhelming. So yeah, should they be hiring someone who's in their corner who knows more than they do. I'm a big believer in pain for professional services UM

when the stakes are high, and the stakes are high. Here, the thing that I have not solved for that pained me greatly in the writing of the Price you Pay for college is that it still doesn't feel to me like there is a fail safe way to go looking for an independent college counselor and know for sure just how smart they are on UM need based ay and

merit aid. Because let's face it, right, you know, if you're going to hang a shingle as an independent college counselor, what you want to do is, you know, charges as much money as you possibly can. But the people who need financial aid or the people who you know feel like they need merit aid, they can't afford to pay you a ten retainer, right, And so it doesn't make a lot of financial sense for an independent counselor to

focus much on that part of the market. And so the question that becomes, well, how do I find the practitioner who is an expert on a family like mind that earns a hundred seventy two dollars a year is going to have, you know, some financial need maybe a private universities, but probably not a ton um but is super interested in merit aid, Like where is my expert that really understands that part of the market. And you know the answer to that question is there aren't actually

all that many of them. Um, I wish there were more. It's almost like there needs to be a tuition fit for advisors, like like you know, I mean if there's some sort of database or something like that where folks could kind of give their feedback on, you know, with their profiles as to how much money that they were able to retain. Yes, exactly right, and so um, there are four or five associations of independent college counselors, and one of them has a subgroup of people who are

really interested in this stuff. But I can't even get that association to make the names of those members public anywhere on their you know, consumer search page. I tried, Right, you would think that that like that would be a resource worth making available and shining a light on, but but it hasn't worked yet to my great frustration. Well, anyway, if people want to email me, Um, you know, I I know a handful of people who who I know are good and I don't mind throwing some names out.

So you know, I met Ron Lieber dot com. I'm easy to find, Ron, You're the best. And obviously people can find you at Ron Lieber dot com. They can find you in the New York Times, you know, on on a weekly basis, and they can find your new book, the price you pay for college, anything else you wanna tell folks, tell our listeners about you. No, just that I'm you know, glad to have this out there. I am here to help. And um my feeling about this after it was all said and done was hope more

than anything else. You know. I went to a lot of schools, and I could imagine my daughter. I'm happy and thriving. It's just about all of them. That's awesome. Yeah, I'm glad to hear that that even through all of this. Yeah, you were able to land on hope at the end of it. So Ron, you rock. Thank you so much for this, uh this conversation, and we appreciate it. Man, I was great to be here. Thank you, all right, Matt Ron Lieber just rocketed up the list my favorite

human beings. What a fun conversation and just enlightening. Um just he brought so much passion, wisdom, and energy to this conversation. I honestly wish like our oldest kids, like my oldest daughter was older, like even older almost, so I could put some of this to work, like immediately. Yes, like some of what I learned I want to implement.

I think sometimes when you sit on knowledge like us, is just like, well, this is good to know now that like I wish I could put this to use, you know, like I wantant to start saving myself money now makes me want to adopt a fourteen year old do it? Dude? I can implement it, but that would you know, throw off some other family dynamics. But yeah, I talked to your wife about that first before I need one. Um. But yeah, what was your big takeaway

from our convo with Ron? Well? I liked at the end he we you know, we asked about community college, and he specifically, you know, made a point to say that he wasn't against community college in order to save money, but how a high percentage of folks who go to community college don't actually end up transferring to a state

or private school. Uh. And he said that if that is your approach, if that's what you're gonna do, you're gonna go to your local community college to save some money, get some of the pro acquisites, some of the base classes out of the way. You need to make sure that you have in mind your goal, your end goal. You need to know your why. And specifically he said how it's good to have a specific school in mind.

You know, like you're not just going to community college to save money, so that you don't have to pay that money to where to what school? You know, like, have a have a school in mind, even have a specific degree in mind. There's nothing worse than not having credits to transfer when you're like, because this is totally gonna work out, you're paying twice, uh and you're doing

twice to work twice the money. But my gosh, and and he recommended to specifically be in touch with an advisor at that target school, be in touch with some checking within multiple times every semester. Make sure that the classes you're taking, make sure that the classes you're you're signing up for for next semester that those are all going to apply to whatever degree that you're looking to pursue at that specific school. It's going to give you

so much clarity. Uh. And you're on a path, you're you're you're on a track, versus just kind of going to community college and feeling like, all right, let's I'm gonna lay in somewhere and not totally sure where. But that has a ton of negative consequences down the road

because things may not line up, those credits may not count. Yeah. Well, I think my big takeaway from our our conversation here, let me hear it, was that the average discount at a private school, it's like it's so big, that's huge, right, And so I think like that the biggest thing, the way that translates for or our listeners out there, is if your kid is excited to go to a school, don't necessarily let that sticker price make you think that

you can't afford it, because that sticker price doesn't reflect what most people pay to go to that university. And I think sometimes people can be like, man, that school is really expensive, and it is. But um, at the same time, there are all sorts of merit aid opportunities for you to go to that school at a greatly reduced price, and not only merit aid, but the need based aid as well. But like, I think it's important just to just to be aware of the fact that

there's a game that you're playing. You know, it's it's sort of like, I mean, we don't recommend for folks like everyone to go out there and buy a new car. Like for some folks that make sense, not for everybody, But if you go to a dealership, you you have to know that you're you're playing a game. You know, like there's a there's a process, there's a dance, and there's a way to win, and then there's like an

uninformed way to lose exactly. And we do not want folks to be uninformed and losing when it comes to you know, what they're spending on their kids college, or what students are out there, what loans they're taking out in order to to go to that school. It's so important and I'm glad that we were able to talk about that today with Ron. I'm also glad that you and I we got to share a different type of beer. This is This isn't a style that we normally have on the show, but I'm glad we were able to

switch it up. Man. Yeah, So this one was called Austar cop By Scepter Brewing Arts, and this is a brewer that's like right around the corner from us. I haven't actually been to this brewer yet, but I figured i'd i'd pick up a can at our local bottle shop. And and this is a Southern oyster rouch beer. I'm pretty sure rouch beers are smoked beers, and this one definitely has like a smoked flavor going on. Yeah, what

were your thoughts on this beer? Yeah? So immediately, like you can't deny the fact that there's smoke going on in this beer. It's like it's almost like a combination of Scotch, which certainly has smoky elements to it. Uh in a in a beer. But these types of beers are made with malts that is like dried over smoke, like over an open flame, so it imparts some of that flavor in the malts. Uh, and you certainly taste that in this beer. Uh. And I don't know if

all like oyster beers are also rosh beers. I don't think so. But like an oyster stout before, Uh, it loved that, Yeah, I think like so traditionally oysters like they lend themselves I think to like the clarifying process of the beers. But now I think like literally there are like oyster flavors that get imparted into the beer,

but it tastes a touch briny. I'm not gonna lie. Yeah. Well, so the fact that this combines a rosch beer, which is a like a smoke beer with oyster flavors, it totally makes me feel like I'm just like slurping down some oysters that were like roasted over like an open wood fire. Uh. It definitely makes me think of my favorite Scotch, which is Talisker, which has a super briny note to it along with a smoke. This is like the beer equivalent to Talisker, if there's any Scotch fans

out there who like that type of beer. But I really enjoyed it. Man, this is not a style we normally drink, but I'm glad that you and I got to to share this one today. Yeah, what were your thoughts on it? Though? Overall, it's definitely a funky style and it's definitely one I think I've literally had one other rotch beer before in my life, um, maybe two, and so yeah, the smoked element of a beer is is interesting because that's not what you're expecting going into it.

I think a lot of our listeners who are like craft beer novices, they might not be into the speer. Yeah, m it might be a little too out there for them, but unless you really like barbecue. But it's kind of that earthy, smokey, you brininess to it, and um, you know, I thought it was like fascinating. It was kind of funny to get to try something that was completely off the beaten path on the show today. Absolutely. All right,

Well that's gonna do it for this episode. For folks that want show notes for this episode, there's a lot that we're gonna link to and that's up on our website at how to money dot com. That's right, and Joel, that's gonna be it for this episode until next time. Best Friends Out, best Friends Out,