If you are in the midst of the college search and admission process, financing this college education is likely top of mind. Merit aid is an important part of many financial packages and there’s no one better to talk to about the topic than Ron Lieber, financial columnist for the New York Times. It’s so important that we decided to share this episode again. Don’t miss the opportunity to hear Ron talk about his Merit Aid course, a great way to get a head start on understanding how it all works.
Vicki and Lynn spent this episode in conversation with Ron Lieber author of The Price You Pay for College: An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make. Ron helped us unpack how complicated the financial aid system is and how crucial it is to understand how it works. The Price You Pay for College examines how our feelings and our ideas about success affect the choices we make about what we are willing to pay for college. Ron also shared information about his new course for families that helps them understand and navigate college Merit Aid.
Thank you for listening!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Welcome to the College Parent Central podcast.
Whether your child is justbeginning the college admission
process or is already in college, this podcast is for you.
You'll find food for thoughtand information about college
and about navigating thatdelicate balance of guidance,
involvement and knowing when toget out of the way.
(00:31):
Join your hosts Vicki Nelson isLynn Abrahams and I am a
(00:54):
learning disability specialist.
Speaker 2 (00:56):
I work in a small liberal arts college.
Locations are that I have twosons who have been to college
and through and around.
So I have both of thoseperspectives and I'm here today
with my good friend andcolleague, Vicki Nelson.
Speaker 3 (01:13):
Yes, my name is Vicki Nelson and I also come from two
perspectives.
I have three daughters who havegone to college and we have
survived that and I am theprofessor of communication at a
small liberal arts college andI'm also an academic advisor.
So I see and work with studentsevery day and bring the both of
(01:36):
those perspectives to thethings that we want to talk
about.
And as much, lynn, as I enjoysitting here and talking with
you, we're very excited becausewe are not alone today and we
have a guest joining us and youare absolutely going to want to
hear what he has to say to you.
(01:58):
We are joined today by RonLieber, and Ron is the your
Money columnist for the New YorkTimes, where his work has
received the Gerald Loeb Award,which is business journalism's
highest honor, three times.
Before coming to the New YorkTimes, ron wrote a personal
finance column for the WallStreet Journal.
(02:19):
Ron is also the author of threethe magic number seems to be
three.
Three New York Timesbestsellers, including Taking
Time Off, co-authored with ColinHall, the Opposite of Spoiled,
raising Kids who Are Grounded,generous and Smart About Money,
(02:39):
and his most recent book thePrice you Pay for College, an
entirely new roadmap for thebiggest financial decision your
family will ever make, which, inaddition to being a New York
Times bestseller, was also namedone of the best books of 2021
by NPR.
Ron lives in Brooklyn with hiswife, jodi Cantor, who is also a
(03:01):
New York Times reporter, andhis two daughters Cantor, who is
also a New York Times reporter,and his two daughters, one of
whom is entering the collegeadmissions process.
He often speaks to audiencesabout what to pay for college
and how the system got socomplicated, which is exactly
what we want to talk to himabout today.
So, ron Lieber, thank you somuch for joining us on the
(03:22):
College Parent Central podcast.
Speaker 4 (03:25):
It's a pleasure to be here.
Thanks for having me.
Speaker 2 (03:28):
So we would like to start asking you just a little
bit about your own story andwhat brought you to writing this
book about college students.
Speaker 4 (03:41):
Sure, I mean, I have a personal interest in this and
a professional one.
The personal starts for me backin middle school when my
parents' marriage busted up andthen my dad lost his job and
didn't earn much income to speakof for a couple of years.
It took our family about adozen years to get back to where
we had been financially, andthat period overlapped with high
(04:05):
school and college.
So we didn't have enough moneyfor me to go to the colleges I
wanted to attend.
But with the assistance of ourcollege counselor we found our
way to.
An independent counselor,interestingly enough, was an
assistant dean of admissionsorry, an assistant dean of
(04:25):
financial aid at NorthwesternUniversity, and he had this side
hustle going on where he washelping local families navigate
the financial aid system, and hebasically told us exactly what
to do and I got into AmherstCollege early decision.
I got a great financial aidpackage and I was sort of off
and running with just $9,000 instudent loans.
The moral of that story for mewas that there is always a
(04:50):
grown-up somewhere out there whoknows the answers to the most
complicated questions, and it'sjust a matter of finding the
grown-up.
And that lesson stuck with me,and so it's probably not that
surprising that I grew up to benot just a journalist and not
just a personal financejournalist, and not just a
personal finance journalistwho's interested in college, but
(05:14):
somebody who's beat is beatingthe system, and oh boy is
college pricing and discountinga capital S system.
And beating, it is just exactlywhat just about every parent
would like to do, or just tounderstand it in the first place
(05:34):
.
One of the reasons I wrote thebook was that my inbox fills up
every October and November andthen again, like clockwork, in
March and April with parents whoare otherwise very
sophisticated and well-educatedthemselves whose first or only
kid is going through the process, and they wake up and realize
(05:56):
that they've missed the memo,that the list price is not the
real price, and that's not justtrue for people who have
financial need, it's true forpeople in the 1%.
In fact, it may be most truefor people in the 1%, because
all sorts of discounts are beingthrown at very wealthy families
(06:18):
by schools who know that thosefamilies don't have the
willingness to pay less price.
Speaker 2 (06:32):
Now I wanted to ask you, in all the research that
you did in preparation for thisbook, what was the thing that
surprised you most?
Speaker 4 (06:36):
I think the thing that surprised me most was the
fact that so many families stopin an extremely haphazard way
for colleges.
In the first place and I'm nothere to cast blame right the
system is complicated.
The high school-based counselorsare overwhelmed.
(06:59):
There's a lot of pressure onthose counselors to not start
the process until kids are intheir junior year, which I think
is a mistake, but I don't blamethe counselors right.
So there's not a lot of clarityin the marketplace and even to
take another giant step back,families don't understand that
(07:24):
it's a marketplace and all theyhear about is how rejective
these schools are, when in factthere's all sorts of places that
would love to throw giantMerida discounts at their kids
to get them to come.
So you know as much as I was inthe research in an attempt to
(07:45):
explain families familiesexactly how the pricing system
and financial aid and merit aidworks.
The basic process of figuringout what college is for and
therefore how to shop for oneintelligently was kind of lost
(08:06):
on all these families, and itwas because I didn't feel like
there were a lot of people outthere in the advice business
helping frame the shoppingexperience in the right way.
So that was the first thing Iwas trying to do with the book
in the early chapters.
Speaker 3 (08:22):
Yeah, and I.
Speaker 2 (08:25):
I just have to ask when do you think a parent
should start?
Speaker 4 (08:31):
I think you need to have the money conversation with
your kid in between the end ofeighth grade and the beginning
of ninth grade, because onecomponent of the merit aid
system is that your grades andyour scores do actually matter.
And if yours is a family that iseither unable or unwilling to
pay full price at some or allschools, I feel like it's only
(08:55):
fair that your kid know therules of the game before they
start high school, becauseotherwise what's the alternative
?
It's like you have thatconversation in junior or God
forbid senior year and then youend up with a very angry kid who
says to you, quite rightly whydidn't you tell me what you were
(09:18):
willing or able to pay or howmuch responsibility would be on
me to try to get some of thesemerit aid scholarships before I
started high school, instead ofat the end?
Right, that's not fair.
I've got all sorts ofadolescent psychologists in my
ear saying how in goodconscience can you be running
(09:40):
around telling parents to startthis conversation about grades
and scores at the end of eighthgrade and I say, look, I don't
like this system and, by the way, the people who run the system
don't like it either.
But until it changes.
It's only fair that teenagersknow how things work before they
(10:01):
start high school, as opposedto at the end, when it's too
late for them to do anythingabout it.
Speaker 2 (10:08):
Makes good sense.
Speaker 3 (10:10):
Yeah, I understand that balance, help them
understand early.
But I guess as part of thattalk is it to open up the
options to all of those hundredsof schools that are out there
that aren't the top 20 oneverybody's list.
(10:32):
So that, so that it you balanceunderstanding about the
finances but not increasing thepressure to get into the best,
best, best, top tier schools.
Yeah, absolutely.
Speaker 4 (10:49):
I mean.
One component of thatconversation is that there are
all sorts of schools and youmight point to some nearby or
you know others that your familyhas happened across for
whatever reason, maybe becauseone of the parents went to them
or an older cousin goes.
There are all sorts of collegesthat are happy to throw
discounts at B-plus or Bstudents, much more so in
(11:15):
certain instances than the Astudents, and in that way you're
not putting pressure on them.
More students a particularcollege rejects, the less likely
they are to have to offerdiscounts to people to get them
(11:36):
to come, and that's just howmarkets work, right.
If you're desirable and there'sscarcity, you don't really have
to discount unless you want to,and most of these schools don't
want to discount unless it'sfor lower income families, and
that's as it should be Right.
But then there are schools inthe marketplace and really it's
(11:56):
every school other than the 50or so most rejected that have to
offer these merit aid discountsthat are not based on need,
because there is a scarcity inthe number of people who have
both the ability and thewillingness to pay a $90,000
list price at the most expensiveprivate colleges or a $35,000
(12:19):
list price at the most expensivepublic flagship schools.
Speaker 3 (12:26):
So, backing up just a little bit, you talked about
how haphazard this searchprocess is, and I'm probably
president of that club bouncingaround.
That, I think, is in your bookand one of the reasons that that
(12:49):
Lynn and I both like it so muchis you.
You talk a little bit about howwe can think about those things
and and how our ideas aboutsuccess and and our and and our
feelings are really going toaffect the choices that we make
about finances.
I, you know, I think so much ofso many of us, think of
(13:11):
finances as being just a purelykind of numbers, intellectual,
heady thing and we don't thinkabout that connection to our
feelings.
So can you talk a little bitabout that idea of how feelings
influence these financialdecisions about college?
Speaker 4 (13:29):
Sure.
Well, one of the great untoldsecrets of personal finance is
that it's much more aboutemotion than it is about math.
Right, and as the field ofbehavioral economics has become
more prominent, more and morepeople are figuring this out.
But behavioral economics has asmuch or more to do with
(13:54):
personal finance and isinfluential on personal finance,
or more influential than it isin the everyday marketplace of
how you get somebody to buysomething when they walk in a
store, something when they walkin a store.
And so part of what I'm tryingto encourage people to do is get
way, way, way more in touchwith their feelings about paying
(14:18):
for college for their kids thanthey are already, and this
isn't easy to do.
I mean, I've written aseven-page single-spaced guide
for financial advisors on how towalk clients through these
conversations when their kid orkids is at the youngest possible
age.
But, to boil it down, there arethree really unhelpful emotions
(14:42):
that tend to come to the fourin this instance.
I mean the first one is fear,right?
Fear that your kid is going togo tumbling down the social
class ladder if you don'tprovide some kind of you know
lore underneath them, and oftenpeople persuade themselves that
the way to do that is with thecollege that rejects the highest
(15:06):
percentage of students thatyour kid gets into, come what
may, no matter the price.
So we start with fear.
Then guilt Guilt that you donot earn enough and therefore
you should borrow.
Guilt that you have not savedenough and therefore you should
borrow.
Guilt that you're not doing aswell economically as your
(15:32):
parents did, and therefore youshould borrow more or raise your
retirement accounts, it foryour kid or kids, even though
the world and the marketplacehas changed pretty dramatically,
(15:52):
and therefore you borrow ortherefore you raid your
retirement accounts or yankmoney from your home equity,
right.
So we can put ourselves on allsorts of guilt trips, and I'm
trying to get people to examinethose itineraries and try to
scale that back as best as theycan.
So fear guilt.
And the last one is snobbery,right, and it may be your own
(16:14):
snobbery.
Private is better than public.
Or you want some fancy windowsticker for the rear of your car
so that everybody in theneighborhood can see where your
kid goes to college, and thefancier the school the better.
Or it may not be your ownsnobbery or elitism.
It's other people's that you'reworried about.
(16:36):
You're worried about themarketplace for 22-year-olds,
whether it's employers that arethemselves elitist and only
recruited certain schools orgraduate schools or fellowships
that are more likely to goshopping for 22-year-olds at the
more rejective schools.
And so if your kid gets intoPenn instead of Penn State and
(16:57):
you can only afford Penn State,well hell, we're going to borrow
another $200,000 from thefederal plus loan program
because of all these snobs outthere that may turn their nose
up at Penn State, of all thesesnobs out there that may turn
their nose up at Penn State.
So these are all the thingsthat can get in the way, and I'm
just trying to get parents toget their heads on straight,
(17:19):
right To have the toughconversations with one another
if it's a two-parent householdand if you're flying solo to
find a trustworthy friend orrelative who's most likely to
ask you difficult, inconvenientquestions about your intentions
around spending.
Speaker 3 (17:38):
Yeah, boy, those difficult, inconvenient
questions, I mean those threeemotions that you talk about are
so powerful.
Yeah, it's a tough process but,boy, it can get you down to
really thinking about value andwhat matters and what you're
(17:59):
willing to pay for, which isyour message, you know, for
those people who can't pay thewhole thing.
There is this mysterious thingthat I know you have focused on
and I really want to give you anopportunity to talk about.
(18:20):
That is merit aid anddiscounting and what that is.
Because you know financial aidand we all fill out the FAFSA
and then you get the expectedfamily income and you know you
may get the federal aid, butthen there is this mysterious
(18:44):
thing called merit aid.
So can you start us with thebasics, with that, a little bit
of what it is and how it worksand who gets it?
Yeah, Sure.
Speaker 4 (18:55):
So for people who are roughly my age, who went to
school 30 or so years ago, wegrew up in a system where your
financial aid was based on yourneed right, how much your family
earned, what sort of assets ithad.
The schools and the governmentkind of size that up and you'd
get or not get scholarshipsaccordingly.
(19:18):
But you know, roundabout 20 or25 years ago, some schools with
high prices with high prices butwe're sort of losing the battle
for 18-year-olds in themarketplace started to realize
(19:42):
that they were going to continueto be in a kind of downward
spiral where the quality of theteenagers who were coming was
going to continue to declineunless they did something about
it.
And again, there's a couplethousand places to go to college
in America.
It's a marketplace.
Inevitably they're going to bewinners and losers, and the
losers that were self-awarethought all right, well, one
thing we could try is to go outin the marketplace and buy
(20:05):
teenagers.
So they bought a bunch of namesfrom the college board of
people who got SAT scores orPSAT scores or ACT scores that
were higher than average fortheir current undergraduate
population and they wrote themletters and said hey, we would
really like you to apply here.
We have identified you as aspecial scholarship-worthy
(20:31):
person.
So if you apply, we'll waivethe application fee and if you
get in we'll give you $3,000 off.
And this is going to be a meritscholarship that's only
reserved for our best students,right?
So everybody wants to getpatted on the head in that way.
And it worked, right.
And once it works for a year ortwo, your competitors up the
(20:53):
road realize that they'restarting to lose the bake-off on
April 28th because that otherschool down the road is paying
people to come in the form ofcoupons, right.
But they're calling it apresidential scholarship, right?
Fancy, merited.
That makes everybody feel goodabout themselves and people want
to be recognized for theiraccomplishments, not for the
(21:14):
fact that their family doesn'thave enough money, right?
So as soon as the school up theroad loses enough times, then
they start to do the same thingand the dominoes fall until
you're so far up the food chainthat only Cornell and Stanford
and Pomona College and theUniversity of Michigan for
(21:37):
out-of-state students doesn'thave to do it anymore, because
there are still way more peoplewho are willing to pay the full
price than there are slots forthose kids.
So all of a sudden, 25 yearslater, all but maybe 50 schools
in America have to play thisgame in some way, shape or form.
University of Chicago plays thegame.
(21:59):
Duke University pays the gameReally great.
Small liberal arts collegeslike Kenyon and Oberlin are
forced to play the game.
All of the women's collegesplay the game, with the
exception of Wellesley SmithCollege, which never thought it
would have to play the game,often until too late, and so
(22:20):
when I wrote the Price you Payfor College, the feedback I got
most often was I want to knowway more about how this works,
because it could be worth$100,000 in discounts to my
(22:43):
family or more.
And so, after hearing that abunch of times, I went out and
built an online course that'sjust about Meridate, so people
can find it at meridatecoursecomand I spent a couple hours just
doing video tutorials with abunch of takeaways and downloads
and links to resources that'llhelp people get a grip on it,
(23:05):
because I was just aghast thatso few people understood how
things actually work today.
Speaker 2 (23:13):
I mean, I'm really curious about you know, what can
parents do?
Is there something they can doto up their chances or up the
amount of money, or is this kindof luck?
Speaker 4 (23:35):
is this kind of luck?
No, it's not so much luck.
Basically, there are two waysthis can work right.
Either your rising ninth gradercan just make a commitment to
performing in the classroom inthe way that will make them most
attractive to schools that havethe biggest discounts, or, in
(23:56):
the junior year of high school,the family can adjust the target
college list to aimspecifically at schools that
offer the biggest discounts.
And if you're a family thatearns let's call it $300,000 a
year, right, like cue the chorusof small violins, right, I mean
(24:19):
, that's a fantastic householdincome.
But most of those families arenot going to qualify for much,
if any, need-based aid, and yetthey can't write a check for
$90,000 each year toNorthwestern, or at least most
of them can't or won't or don'twant to, right, and so you may
have to cross the Northwesternsoff the list.
But you can add the Syracuses,or you can add schools like
(24:45):
University of Chicago that willoffer merit aid discounts to a
pretty sizable number of kids inan attempt to buy them away
from Cornell and Stanford.
And so you got to go out andfigure out what those schools
are, which is what I'm trying tohelp people do, and you can
take this to an extreme.
(25:06):
I mean, in my book I wroteabout a family where they
identified what they felt werethe 30 best most appropriate for
their child schools in Americathat offered full rides, full
tuition, scholarship orsometimes full tuition and board
, and the kid applied to all 30.
(25:27):
And she got two or three offersat the end of that process and
she went to Tulane on a fullride.
Wow.
But it was a part-time job,figuring that out.
Speaker 2 (25:39):
I was just going to say it must be really hard to
find all this information.
Speaker 4 (25:58):
It's really hard right online, whether it's the
subreddit for college admissionsor college confidential or a
really great Facebook groupcalled Paying for College 101.
And people are very generousthere.
The challenge is that you neverknow exactly who you're dealing
with, who's giving you advice,and often their experience is
(26:23):
based on having you know, havingdone it with a couple of kids,
and that's not nothing.
They may know more than 99% ofthe population at that point if
they've really geeked out on theprocess.
But that doesn't mean thattheir advice is always right or
always current or always up todate, and so you know.
One of the advantages I have asa New York Times reporter and
(26:44):
then having written this book isthat I have literal license to
call up the smartest people inAmerica and more often than not
they're willing to talk to mebecause I've got a decent
reputation for getting it rightand being fair.
So I was trying to kind of putdown all of my accumulated
knowledge about the Meridaprocess in one course in the
(27:07):
hopes that it would be astarting.
The sort of schools that mightor might not be right for their
kid test optional and don't havethe SAT scores as much or the
ACT scores to use as a measure.
Speaker 3 (27:48):
Or is it not about?
Speaker 4 (27:50):
that.
Well, it's an interestingquestion, and one of the things
that I always encourage peopleto do if they're seeking
Meridade but their kid might notsubmit a test is ask whether
not submitting a test is goingto be a problem, because
sometimes it is.
And, by the way, the schoolsout there that are calling
(28:11):
themselves test optional butmake it mandatory to get merited
are not actually test optionaland they don't deserve to call
themselves that.
So it's sort of a trap trap andyou have to ask about that.
And you have to ask about itwhen your kid's a sophomore in
high school, because the testingmachinery, its gears start to
grind junior year and you know,ideally your kid is done with
(28:35):
the testing by the timeapplication season starts, so
they're not worrying about thatanymore.
So you got to figure all thatout and to make it harder, the
schools themselves are changingtheir minds as we speak about
whether they want to stay testoptional or go test blind, and
so all this is a moving target.
Speaker 2 (28:58):
Yes, it is, I'm glad you're offering the course yeah.
Speaker 3 (29:02):
Would you when?
Well, you'd recommend thatparents do the course now, but
when?
In the scheme of things, ifthey're having this talk with
their student early on about youknow, we've got to think about
this thing called money as in inas part of the college
(29:25):
admission process.
When is your course mosthelpful to parents?
Speaker 4 (29:32):
I think if you want to know what you're up against,
it probably makes sense to takea look at it when your kid is
starting high school.
Um, you know you can come backto it anytime you want.
Uh, you knowher course, and I'mgoing to try and add content to
it as things change.
I don't expect things to changeall that much in the next
(29:55):
couple of years.
Merit aid stops becoming anenormous factor for many
families is if all of theschools reprice themselves to
the average amount that a familywith no financial need actually
(30:16):
pays.
But the reason they won't dothat is because everybody likes
a discount and they anchorthemselves to the list price as
a sign of quality, right, and soit feels pretty good if your
(30:38):
kid is going to a $74,000 schoolbut all you're paying is
you48,000 or whatever, and sothe schools have a sort of
psychological advantage to keepthe system that way.
Now they would prefer not todeal with this Meridate stuff at
all.
They would like it if everybodyrepriced all at once.
(31:01):
But the problem is, if they allgot together and decided to do
that, it would be illegal.
It would be price fixing andthe mere suggestion of that
possibility which has come up inforums that school
administrators thought wereprivate.
When it's leaked out, theantitrust authorities in
(31:24):
Washington have startedinvestigations.
So nobody even talks aboutindustry-wide repricing anymore,
because people don't want theantitrust police to come after
that.
Speaker 3 (31:41):
I would think not.
Yeah, so the prices are goingto stay high and merit aid is
going to be the, not the schoolsdon't talk about discounts.
I mean, it's interestingbecause we both work in a
college and within the college,we're always talking about our
(32:03):
discount rate.
So so we think of it as adiscount, but and I know you
touched on this, but I you knowI think it's an important point
that that saying to parentswe're going to give you a
discount feels as though we'redoing something for you because
you, you, you need it, you can'tafford to come, and as opposed
(32:27):
to we're giving your childsomething because they're
special and outstanding, and sowe call it Right.
Speaker 4 (32:35):
I mean, one of the things I've been able to do as a
reporter that parents can't doand so this doesn't come up in
these online forums is that I'mable to go to these higher
education conferences whereadministrators and the
consultants who service them arefretting about this discount
(32:57):
rate that's now well above 50%at private colleges, and the
schools worry that.
You know their discount rate isgoing up each year.
But that's not the way theschools speak to families.
The schools speak to familiesin terms of presidential
scholarships when, in fact, whatthey're really doing is just
offering a coupon and trying touse algorithms to predict the
(33:21):
highest price that a family iswilling to pay and offer that
coupon at exactly that price sothey can extract the maximum
revenue from the families.
And I'm not framing it that waybecause I think the colleges
are evil.
Again, this is a marketplaceand we don't want these colleges
to go away In America.
We like choice, we like havingthousands of schools to choose
(33:42):
from.
So this is just the way theschools need to do it, given the
way that the system is.
But the schools don't speakabout it that way and the
schools are certainly not sayingto families who are shopping.
Here's what our average discountrate is.
(34:03):
Because if you think your kidis above average and, by the way
, everybody's kid is aboveaverage, we know this right If
your kid is above average you'regoing to ask for a bigger
discount than average.
And if everybody does that, notonly does it get really
annoying in the admissionsoffice in March and April, but
(34:25):
half the people are going to bedisappointed, and then your
yield falls and you don't get asmany students as you'd hoped
for.
So it's not in the school'sinterest to make sure families
are super educated consumers,because then people are just
going to ask for more, andthey're going to ask for more
than average.
So I always want my customersright.
(34:47):
I want my readers in the NewYork Times, I want my readers of
my books and I want the peoplewho take my Merida course to be
customers of below averageprofitability for any company or
institution that they'redealing with.
That's what I was put on theearth to do.
Speaker 3 (35:05):
It's a good mission.
So tell us just, you know, tosort of wrap up here just a
little bit more about thiscourse it sounds.
You know, the more you talk,the more complicated the whole
(35:27):
system.
You know we realize howcomplicated it is and that a
course that's going to tell meabout Merida is essential not
just nice, but essential.
So how do you take parentsthrough that within the course?
Speaker 4 (35:36):
Sure, I try to start.
You know the course starts witha sort of crash course, in
plain English, on how we gothere Right.
So, like this is a marketplace.
What does the marketplace looklike, how is the marketplace
involved, and why did someschools start offering these
(35:58):
merit aid discounts and why didthe vast majority of schools
have to do the same thing?
So here's how the system works.
Here are all the pointedquestions you need to ask
yourself before you go shopping.
Here are the right things to dowhen you go shopping.
Here's how to figure out whichschools offer merit aid and what
(36:19):
the average amount is.
Here's how to figure out yourkid's chance of getting more
than average, and then here'show to figure out your kid's
chance of getting more thanaverage.
And then here's what to do whenyou've got a bunch of offers
and you're hoping to extract alittle more of a discount from a
particular school.
Speaker 3 (36:36):
Okay, so step-by-step through, so early on then, as
you begin the search process,it's obvious of what you need,
so tell us again.
You mentioned it in an offhandway.
How do parents find this course?
Speaker 4 (36:53):
Sure, you can find the course at meridaidcoursecom.
All one word.
Speaker 3 (36:59):
Okay, we will put that in the show notes and let
people know that.
Speaker 2 (37:08):
So, before we end, I do want to ask you a question
that we didn't tell you.
We were going to ask you, andwe ask all of our friends who
come, and that's what otherbooks could you recommend to
parents who are looking for moreinformation about this?
Speaker 4 (37:30):
So I really love Jeff Salingo's book yes, we do too.
Who Gets In and why?
Speaker 2 (37:43):
Yeah.
Speaker 4 (37:45):
Yeah, you know, you caught me at a moment where I
was just about to reorganize thebooks and I'm looking behind me
.
Right now there's one inparticular that I wanted to
mention, whose title I can'tremember, and I know what it
looks like, but I'm not seeingit.
Speaker 2 (38:08):
Well, if you just let us know, we will put it in the
notes.
Speaker 4 (38:12):
I will.
I am a big fan of Tim Fieldsand Shereme Herndon Brown.
For families who are Black, theBlack Families Guide to College
Admissions is really excellent,and those guys give a great
presentation in person as well.
And my colleague Frank Brunieswhere you go is not who you'll
(38:41):
be.
Yes, if you want to get reallyangry about how admissions works
behind the scenes, the Price ofAdmission by Dan Golden and, as
ever, you know, for generalparenting advice, how to Raise
(39:02):
an Adult by Julie Lithcott Hames.
Speaker 2 (39:05):
That is one of our very favorites.
I want to say yeah Is excellent.
Speaker 4 (39:10):
Okay, and I am so annoyed that I can't put my
hands on this other one, butI'll find it.
We can toss it in the shownotes.
Speaker 3 (39:21):
Okay, we'll toss it in the show notes Sorry, we we
sprung that on you, but but butwhen we talk to people in this
world to know what they wouldrecommend, it just broadens and
broadens what.
What's out there for parents?
You know when, when, when Istarted the college Parent
(39:43):
Central website in 2009, therereally wasn't much.
Parents weren't considered partof this process in the same way
.
So it's wonderful to have awhole set of information like
this, like this.
(40:11):
So we have the link to yourwebsite and then, if people
would like to get in touch withyou, is there any way that they
can reach you?
Or just go to the Merit Aid?
Speaker 4 (40:17):
course website.
Yeah, if you go to ronlebercom,there's a contact button there.
Speaker 2 (40:29):
And I try to respond to everybody although I can't
always do it really quickly, wereally appreciate your time
today.
Speaker 4 (40:34):
Oh, it's my pleasure.
Thank you for your interest.
Speaker 3 (40:37):
This is really such an important topic and we have
(41:01):
steered away from really talkingmuch at all about financial aid
because it is so complicatedand so mysterious that we don't
want to muck it up.
We really need the experts likeyou.
So thank you for your book andeveryone should read it.
We will put that in the shownotes.
And it's not I mean it's afinancial book because it's got
all of this information, but itdoesn't feel like I'm reading a
financial book, I think becauseof that emphasis that you put on
.
You know those themes and ourfears and what the work we have
(41:22):
to do and values and all of that.
So you know, we just keeprecommending that book to
parents.
Speaker 4 (41:30):
Thank you so much.
I mean I tried hard to get thetwo exactly right and for it not
to feel dry and bloodless.
So I appreciate that.
Speaker 3 (41:39):
Definitely not bloodless.
So thank you so much and wewill put all this information in
the show notes and perhaps wewill be calling you back to come
and talk some more sometime.
Speaker 4 (41:54):
Thank, you, thank you .
Welcome to the College Parent Central podcast.
Whether your child is justbeginning the college admission
process or is already in college, this podcast is for you.
You'll find food for thoughtand information about college
and about navigating thatdelicate balance of guidance,
involvement and knowing when toget out of the way.
(00:31):
Join your hosts Vicki Nelson isLynn Abrahams and I am a
(00:54):
learning disability specialist.
Speaker 2 (00:56):
I work in a small liberal arts college.
Locations are that I have twosons who have been to college
and through and around.
So I have both of thoseperspectives and I'm here today
with my good friend andcolleague, Vicki Nelson.
Speaker 3 (01:13):
Yes, my name is Vicki Nelson and I also come from two
perspectives.
I have three daughters who havegone to college and we have
survived that and I am theprofessor of communication at a
small liberal arts college andI'm also an academic advisor.
So I see and work with studentsevery day and bring the both of
(01:36):
those perspectives to thethings that we want to talk
about.
And as much, lynn, as I enjoysitting here and talking with
you, we're very excited becausewe are not alone today and we
have a guest joining us and youare absolutely going to want to
hear what he has to say to you.
(01:58):
We are joined today by RonLieber, and Ron is the your
Money columnist for the New YorkTimes, where his work has
received the Gerald Loeb Award,which is business journalism's
highest honor, three times.
Before coming to the New YorkTimes, ron wrote a personal
finance column for the WallStreet Journal.
(02:19):
Ron is also the author of threethe magic number seems to be
three.
Three New York Timesbestsellers, including Taking
Time Off, co-authored with ColinHall, the Opposite of Spoiled,
raising Kids who Are Grounded,generous and Smart About Money,
(02:39):
and his most recent book thePrice you Pay for College, an
entirely new roadmap for thebiggest financial decision your
family will ever make, which, inaddition to being a New York
Times bestseller, was also namedone of the best books of 2021
by NPR.
Ron lives in Brooklyn with hiswife, jodi Cantor, who is also a
(03:01):
New York Times reporter, andhis two daughters Cantor, who is
also a New York Times reporter,and his two daughters, one of
whom is entering the collegeadmissions process.
He often speaks to audiencesabout what to pay for college
and how the system got socomplicated, which is exactly
what we want to talk to himabout today.
So, ron Lieber, thank you somuch for joining us on the
(03:22):
College Parent Central podcast.
Speaker 4 (03:25):
It's a pleasure to be here.
Thanks for having me.
Speaker 2 (03:28):
So we would like to start asking you just a little
bit about your own story andwhat brought you to writing this
book about college students.
Speaker 4 (03:41):
Sure, I mean, I have a personal interest in this and
a professional one.
The personal starts for me backin middle school when my
parents' marriage busted up andthen my dad lost his job and
didn't earn much income to speakof for a couple of years.
It took our family about adozen years to get back to where
we had been financially, andthat period overlapped with high
(04:05):
school and college.
So we didn't have enough moneyfor me to go to the colleges I
wanted to attend.
But with the assistance of ourcollege counselor we found our
way to.
An independent counselor,interestingly enough, was an
assistant dean of admissionsorry, an assistant dean of
(04:25):
financial aid at NorthwesternUniversity, and he had this side
hustle going on where he washelping local families navigate
the financial aid system, and hebasically told us exactly what
to do and I got into AmherstCollege early decision.
I got a great financial aidpackage and I was sort of off
and running with just $9,000 instudent loans.
The moral of that story for mewas that there is always a
(04:50):
grown-up somewhere out there whoknows the answers to the most
complicated questions, and it'sjust a matter of finding the
grown-up.
And that lesson stuck with me,and so it's probably not that
surprising that I grew up to benot just a journalist and not
just a personal financejournalist, and not just a
personal finance journalistwho's interested in college, but
(05:14):
somebody who's beat is beatingthe system, and oh boy is
college pricing and discountinga capital S system.
And beating, it is just exactlywhat just about every parent
would like to do, or just tounderstand it in the first place
(05:34):
.
One of the reasons I wrote thebook was that my inbox fills up
every October and November andthen again, like clockwork, in
March and April with parents whoare otherwise very
sophisticated and well-educatedthemselves whose first or only
kid is going through the process, and they wake up and realize
(05:56):
that they've missed the memo,that the list price is not the
real price, and that's not justtrue for people who have
financial need, it's true forpeople in the 1%.
In fact, it may be most truefor people in the 1%, because
all sorts of discounts are beingthrown at very wealthy families
(06:18):
by schools who know that thosefamilies don't have the
willingness to pay less price.
Speaker 2 (06:32):
Now I wanted to ask you, in all the research that
you did in preparation for thisbook, what was the thing that
surprised you most?
Speaker 4 (06:36):
I think the thing that surprised me most was the
fact that so many families stopin an extremely haphazard way
for colleges.
In the first place and I'm nothere to cast blame right the
system is complicated.
The high school-based counselorsare overwhelmed.
(06:59):
There's a lot of pressure onthose counselors to not start
the process until kids are intheir junior year, which I think
is a mistake, but I don't blamethe counselors right.
So there's not a lot of clarityin the marketplace and even to
take another giant step back,families don't understand that
(07:24):
it's a marketplace and all theyhear about is how rejective
these schools are, when in factthere's all sorts of places that
would love to throw giantMerida discounts at their kids
to get them to come.
So you know as much as I was inthe research in an attempt to
(07:45):
explain families familiesexactly how the pricing system
and financial aid and merit aidworks.
The basic process of figuringout what college is for and
therefore how to shop for oneintelligently was kind of lost
(08:06):
on all these families, and itwas because I didn't feel like
there were a lot of people outthere in the advice business
helping frame the shoppingexperience in the right way.
So that was the first thing Iwas trying to do with the book
in the early chapters.
Speaker 3 (08:22):
Yeah, and I.
Speaker 2 (08:25):
I just have to ask when do you think a parent
should start?
Speaker 4 (08:31):
I think you need to have the money conversation with
your kid in between the end ofeighth grade and the beginning
of ninth grade, because onecomponent of the merit aid
system is that your grades andyour scores do actually matter.
And if yours is a family that iseither unable or unwilling to
pay full price at some or allschools, I feel like it's only
(08:55):
fair that your kid know therules of the game before they
start high school, becauseotherwise what's the alternative
?
It's like you have thatconversation in junior or God
forbid senior year and then youend up with a very angry kid who
says to you, quite rightly whydidn't you tell me what you were
(09:18):
willing or able to pay or howmuch responsibility would be on
me to try to get some of thesemerit aid scholarships before I
started high school, instead ofat the end?
Right, that's not fair.
I've got all sorts ofadolescent psychologists in my
ear saying how in goodconscience can you be running
(09:40):
around telling parents to startthis conversation about grades
and scores at the end of eighthgrade and I say, look, I don't
like this system and, by the way, the people who run the system
don't like it either.
But until it changes.
It's only fair that teenagersknow how things work before they
(10:01):
start high school, as opposedto at the end, when it's too
late for them to do anythingabout it.
Speaker 2 (10:08):
Makes good sense.
Speaker 3 (10:10):
Yeah, I understand that balance, help them
understand early.
But I guess as part of thattalk is it to open up the
options to all of those hundredsof schools that are out there
that aren't the top 20 oneverybody's list.
(10:32):
So that, so that it you balanceunderstanding about the
finances but not increasing thepressure to get into the best,
best, best, top tier schools.
Yeah, absolutely.
Speaker 4 (10:49):
I mean.
One component of thatconversation is that there are
all sorts of schools and youmight point to some nearby or
you know others that your familyhas happened across for
whatever reason, maybe becauseone of the parents went to them
or an older cousin goes.
There are all sorts of collegesthat are happy to throw
discounts at B-plus or Bstudents, much more so in
(11:15):
certain instances than the Astudents, and in that way you're
not putting pressure on them.
More students a particularcollege rejects, the less likely
they are to have to offerdiscounts to people to get them
(11:36):
to come, and that's just howmarkets work, right.
If you're desirable and there'sscarcity, you don't really have
to discount unless you want to,and most of these schools don't
want to discount unless it'sfor lower income families, and
that's as it should be Right.
But then there are schools inthe marketplace and really it's
(11:56):
every school other than the 50or so most rejected that have to
offer these merit aid discountsthat are not based on need,
because there is a scarcity inthe number of people who have
both the ability and thewillingness to pay a $90,000
list price at the most expensiveprivate colleges or a $35,000
(12:19):
list price at the most expensivepublic flagship schools.
Speaker 3 (12:26):
So, backing up just a little bit, you talked about
how haphazard this searchprocess is, and I'm probably
president of that club bouncingaround.
That, I think, is in your bookand one of the reasons that that
(12:49):
Lynn and I both like it so muchis you.
You talk a little bit about howwe can think about those things
and and how our ideas aboutsuccess and and our and and our
feelings are really going toaffect the choices that we make
about finances.
I, you know, I think so much ofso many of us, think of
(13:11):
finances as being just a purelykind of numbers, intellectual,
heady thing and we don't thinkabout that connection to our
feelings.
So can you talk a little bitabout that idea of how feelings
influence these financialdecisions about college?
Speaker 4 (13:29):
Sure.
Well, one of the great untoldsecrets of personal finance is
that it's much more aboutemotion than it is about math.
Right, and as the field ofbehavioral economics has become
more prominent, more and morepeople are figuring this out.
But behavioral economics has asmuch or more to do with
(13:54):
personal finance and isinfluential on personal finance,
or more influential than it isin the everyday marketplace of
how you get somebody to buysomething when they walk in a
store, something when they walkin a store.
And so part of what I'm tryingto encourage people to do is get
way, way, way more in touchwith their feelings about paying
(14:18):
for college for their kids thanthey are already, and this
isn't easy to do.
I mean, I've written aseven-page single-spaced guide
for financial advisors on how towalk clients through these
conversations when their kid orkids is at the youngest possible
age.
But, to boil it down, there arethree really unhelpful emotions
(14:42):
that tend to come to the fourin this instance.
I mean the first one is fear,right?
Fear that your kid is going togo tumbling down the social
class ladder if you don'tprovide some kind of you know
lore underneath them, and oftenpeople persuade themselves that
the way to do that is with thecollege that rejects the highest
(15:06):
percentage of students thatyour kid gets into, come what
may, no matter the price.
So we start with fear.
Then guilt Guilt that you donot earn enough and therefore
you should borrow.
Guilt that you have not savedenough and therefore you should
borrow.
Guilt that you're not doing aswell economically as your
(15:32):
parents did, and therefore youshould borrow more or raise your
retirement accounts, it foryour kid or kids, even though
the world and the marketplacehas changed pretty dramatically,
(15:52):
and therefore you borrow ortherefore you raid your
retirement accounts or yankmoney from your home equity,
right.
So we can put ourselves on allsorts of guilt trips, and I'm
trying to get people to examinethose itineraries and try to
scale that back as best as theycan.
So fear guilt.
And the last one is snobbery,right, and it may be your own
(16:14):
snobbery.
Private is better than public.
Or you want some fancy windowsticker for the rear of your car
so that everybody in theneighborhood can see where your
kid goes to college, and thefancier the school the better.
Or it may not be your ownsnobbery or elitism.
It's other people's that you'reworried about.
(16:36):
You're worried about themarketplace for 22-year-olds,
whether it's employers that arethemselves elitist and only
recruited certain schools orgraduate schools or fellowships
that are more likely to goshopping for 22-year-olds at the
more rejective schools.
And so if your kid gets intoPenn instead of Penn State and
(16:57):
you can only afford Penn State,well hell, we're going to borrow
another $200,000 from thefederal plus loan program
because of all these snobs outthere that may turn their nose
up at Penn State, of all thesesnobs out there that may turn
their nose up at Penn State.
So these are all the thingsthat can get in the way, and I'm
just trying to get parents toget their heads on straight,
(17:19):
right To have the toughconversations with one another
if it's a two-parent householdand if you're flying solo to
find a trustworthy friend orrelative who's most likely to
ask you difficult, inconvenientquestions about your intentions
around spending.
Speaker 3 (17:38):
Yeah, boy, those difficult, inconvenient
questions, I mean those threeemotions that you talk about are
so powerful.
Yeah, it's a tough process but,boy, it can get you down to
really thinking about value andwhat matters and what you're
(17:59):
willing to pay for, which isyour message, you know, for
those people who can't pay thewhole thing.
There is this mysterious thingthat I know you have focused on
and I really want to give you anopportunity to talk about.
(18:20):
That is merit aid anddiscounting and what that is.
Because you know financial aidand we all fill out the FAFSA
and then you get the expectedfamily income and you know you
may get the federal aid, butthen there is this mysterious
(18:44):
thing called merit aid.
So can you start us with thebasics, with that, a little bit
of what it is and how it worksand who gets it?
Yeah, Sure.
Speaker 4 (18:55):
So for people who are roughly my age, who went to
school 30 or so years ago, wegrew up in a system where your
financial aid was based on yourneed right, how much your family
earned, what sort of assets ithad.
The schools and the governmentkind of size that up and you'd
get or not get scholarshipsaccordingly.
(19:18):
But you know, roundabout 20 or25 years ago, some schools with
high prices with high prices butwe're sort of losing the battle
for 18-year-olds in themarketplace started to realize
(19:42):
that they were going to continueto be in a kind of downward
spiral where the quality of theteenagers who were coming was
going to continue to declineunless they did something about
it.
And again, there's a couplethousand places to go to college
in America.
It's a marketplace.
Inevitably they're going to bewinners and losers, and the
losers that were self-awarethought all right, well, one
thing we could try is to go outin the marketplace and buy
(20:05):
teenagers.
So they bought a bunch of namesfrom the college board of
people who got SAT scores orPSAT scores or ACT scores that
were higher than average fortheir current undergraduate
population and they wrote themletters and said hey, we would
really like you to apply here.
We have identified you as aspecial scholarship-worthy
(20:31):
person.
So if you apply, we'll waivethe application fee and if you
get in we'll give you $3,000 off.
And this is going to be a meritscholarship that's only
reserved for our best students,right?
So everybody wants to getpatted on the head in that way.
And it worked, right.
And once it works for a year ortwo, your competitors up the
(20:53):
road realize that they'restarting to lose the bake-off on
April 28th because that otherschool down the road is paying
people to come in the form ofcoupons, right.
But they're calling it apresidential scholarship, right?
Fancy, merited.
That makes everybody feel goodabout themselves and people want
to be recognized for theiraccomplishments, not for the
(21:14):
fact that their family doesn'thave enough money, right?
So as soon as the school up theroad loses enough times, then
they start to do the same thingand the dominoes fall until
you're so far up the food chainthat only Cornell and Stanford
and Pomona College and theUniversity of Michigan for
(21:37):
out-of-state students doesn'thave to do it anymore, because
there are still way more peoplewho are willing to pay the full
price than there are slots forthose kids.
So all of a sudden, 25 yearslater, all but maybe 50 schools
in America have to play thisgame in some way, shape or form.
University of Chicago plays thegame.
(21:59):
Duke University pays the gameReally great.
Small liberal arts collegeslike Kenyon and Oberlin are
forced to play the game.
All of the women's collegesplay the game, with the
exception of Wellesley SmithCollege, which never thought it
would have to play the game,often until too late, and so
(22:20):
when I wrote the Price you Payfor College, the feedback I got
most often was I want to knowway more about how this works,
because it could be worth$100,000 in discounts to my
(22:43):
family or more.
And so, after hearing that abunch of times, I went out and
built an online course that'sjust about Meridate, so people
can find it at meridatecoursecomand I spent a couple hours just
doing video tutorials with abunch of takeaways and downloads
and links to resources that'llhelp people get a grip on it,
(23:05):
because I was just aghast thatso few people understood how
things actually work today.
Speaker 2 (23:13):
I mean, I'm really curious about you know, what can
parents do?
Is there something they can doto up their chances or up the
amount of money, or is this kindof luck?
Speaker 4 (23:35):
is this kind of luck?
No, it's not so much luck.
Basically, there are two waysthis can work right.
Either your rising ninth gradercan just make a commitment to
performing in the classroom inthe way that will make them most
attractive to schools that havethe biggest discounts, or, in
(23:56):
the junior year of high school,the family can adjust the target
college list to aimspecifically at schools that
offer the biggest discounts.
And if you're a family thatearns let's call it $300,000 a
year, right, like cue the chorusof small violins, right, I mean
(24:19):
, that's a fantastic householdincome.
But most of those families arenot going to qualify for much,
if any, need-based aid, and yetthey can't write a check for
$90,000 each year toNorthwestern, or at least most
of them can't or won't or don'twant to, right, and so you may
have to cross the Northwesternsoff the list.
But you can add the Syracuses,or you can add schools like
(24:45):
University of Chicago that willoffer merit aid discounts to a
pretty sizable number of kids inan attempt to buy them away
from Cornell and Stanford.
And so you got to go out andfigure out what those schools
are, which is what I'm trying tohelp people do, and you can
take this to an extreme.
(25:06):
I mean, in my book I wroteabout a family where they
identified what they felt werethe 30 best most appropriate for
their child schools in Americathat offered full rides, full
tuition, scholarship orsometimes full tuition and board
, and the kid applied to all 30.
(25:27):
And she got two or three offersat the end of that process and
she went to Tulane on a fullride.
Wow.
But it was a part-time job,figuring that out.
Speaker 2 (25:39):
I was just going to say it must be really hard to
find all this information.
Speaker 4 (25:58):
It's really hard right online, whether it's the
subreddit for college admissionsor college confidential or a
really great Facebook groupcalled Paying for College 101.
And people are very generousthere.
The challenge is that you neverknow exactly who you're dealing
with, who's giving you advice,and often their experience is
(26:23):
based on having you know, havingdone it with a couple of kids,
and that's not nothing.
They may know more than 99% ofthe population at that point if
they've really geeked out on theprocess.
But that doesn't mean thattheir advice is always right or
always current or always up todate, and so you know.
One of the advantages I have asa New York Times reporter and
(26:44):
then having written this book isthat I have literal license to
call up the smartest people inAmerica and more often than not
they're willing to talk to mebecause I've got a decent
reputation for getting it rightand being fair.
So I was trying to kind of putdown all of my accumulated
knowledge about the Meridaprocess in one course in the
(27:07):
hopes that it would be astarting.
The sort of schools that mightor might not be right for their
kid test optional and don't havethe SAT scores as much or the
ACT scores to use as a measure.
Speaker 3 (27:48):
Or is it not about?
Speaker 4 (27:50):
that.
Well, it's an interestingquestion, and one of the things
that I always encourage peopleto do if they're seeking
Meridade but their kid might notsubmit a test is ask whether
not submitting a test is goingto be a problem, because
sometimes it is.
And, by the way, the schoolsout there that are calling
(28:11):
themselves test optional butmake it mandatory to get merited
are not actually test optionaland they don't deserve to call
themselves that.
So it's sort of a trap trap andyou have to ask about that.
And you have to ask about itwhen your kid's a sophomore in
high school, because the testingmachinery, its gears start to
grind junior year and you know,ideally your kid is done with
(28:35):
the testing by the timeapplication season starts, so
they're not worrying about thatanymore.
So you got to figure all thatout and to make it harder, the
schools themselves are changingtheir minds as we speak about
whether they want to stay testoptional or go test blind, and
so all this is a moving target.
Speaker 2 (28:58):
Yes, it is, I'm glad you're offering the course yeah.
Speaker 3 (29:02):
Would you when?
Well, you'd recommend thatparents do the course now, but
when?
In the scheme of things, ifthey're having this talk with
their student early on about youknow, we've got to think about
this thing called money as in inas part of the college
(29:25):
admission process.
When is your course mosthelpful to parents?
Speaker 4 (29:32):
I think if you want to know what you're up against,
it probably makes sense to takea look at it when your kid is
starting high school.
Um, you know you can come backto it anytime you want.
Uh, you knowher course, and I'mgoing to try and add content to
it as things change.
I don't expect things to changeall that much in the next
(29:55):
couple of years.
Merit aid stops becoming anenormous factor for many
families is if all of theschools reprice themselves to
the average amount that a familywith no financial need actually
(30:16):
pays.
But the reason they won't dothat is because everybody likes
a discount and they anchorthemselves to the list price as
a sign of quality, right, and soit feels pretty good if your
(30:38):
kid is going to a $74,000 schoolbut all you're paying is
you48,000 or whatever, and sothe schools have a sort of
psychological advantage to keepthe system that way.
Now they would prefer not todeal with this Meridate stuff at
all.
They would like it if everybodyrepriced all at once.
(31:01):
But the problem is, if they allgot together and decided to do
that, it would be illegal.
It would be price fixing andthe mere suggestion of that
possibility which has come up inforums that school
administrators thought wereprivate.
When it's leaked out, theantitrust authorities in
(31:24):
Washington have startedinvestigations.
So nobody even talks aboutindustry-wide repricing anymore,
because people don't want theantitrust police to come after
that.
Speaker 3 (31:41):
I would think not.
Yeah, so the prices are goingto stay high and merit aid is
going to be the, not the schoolsdon't talk about discounts.
I mean, it's interestingbecause we both work in a
college and within the college,we're always talking about our
(32:03):
discount rate.
So so we think of it as adiscount, but and I know you
touched on this, but I you knowI think it's an important point
that that saying to parentswe're going to give you a
discount feels as though we'redoing something for you because
you, you, you need it, you can'tafford to come, and as opposed
(32:27):
to we're giving your childsomething because they're
special and outstanding, and sowe call it Right.
Speaker 4 (32:35):
I mean, one of the things I've been able to do as a
reporter that parents can't doand so this doesn't come up in
these online forums is that I'mable to go to these higher
education conferences whereadministrators and the
consultants who service them arefretting about this discount
(32:57):
rate that's now well above 50%at private colleges, and the
schools worry that.
You know their discount rate isgoing up each year.
But that's not the way theschools speak to families.
The schools speak to familiesin terms of presidential
scholarships when, in fact, whatthey're really doing is just
offering a coupon and trying touse algorithms to predict the
(33:21):
highest price that a family iswilling to pay and offer that
coupon at exactly that price sothey can extract the maximum
revenue from the families.
And I'm not framing it that waybecause I think the colleges
are evil.
Again, this is a marketplaceand we don't want these colleges
to go away In America.
We like choice, we like havingthousands of schools to choose
(33:42):
from.
So this is just the way theschools need to do it, given the
way that the system is.
But the schools don't speakabout it that way and the
schools are certainly not sayingto families who are shopping.
Here's what our average discountrate is.
(34:03):
Because if you think your kidis above average and, by the way
, everybody's kid is aboveaverage, we know this right If
your kid is above average you'regoing to ask for a bigger
discount than average.
And if everybody does that, notonly does it get really
annoying in the admissionsoffice in March and April, but
(34:25):
half the people are going to bedisappointed, and then your
yield falls and you don't get asmany students as you'd hoped
for.
So it's not in the school'sinterest to make sure families
are super educated consumers,because then people are just
going to ask for more, andthey're going to ask for more
than average.
So I always want my customersright.
(34:47):
I want my readers in the NewYork Times, I want my readers of
my books and I want the peoplewho take my Merida course to be
customers of below averageprofitability for any company or
institution that they'redealing with.
That's what I was put on theearth to do.
Speaker 3 (35:05):
It's a good mission.
So tell us just, you know, tosort of wrap up here just a
little bit more about thiscourse it sounds.
You know, the more you talk,the more complicated the whole
(35:27):
system.
You know we realize howcomplicated it is and that a
course that's going to tell meabout Merida is essential not
just nice, but essential.
So how do you take parentsthrough that within the course?
Speaker 4 (35:36):
Sure, I try to start.
You know the course starts witha sort of crash course, in
plain English, on how we gothere Right.
So, like this is a marketplace.
What does the marketplace looklike, how is the marketplace
involved, and why did someschools start offering these
(35:58):
merit aid discounts and why didthe vast majority of schools
have to do the same thing?
So here's how the system works.
Here are all the pointedquestions you need to ask
yourself before you go shopping.
Here are the right things to dowhen you go shopping.
Here's how to figure out whichschools offer merit aid and what
(36:19):
the average amount is.
Here's how to figure out yourkid's chance of getting more
than average, and then here'show to figure out your kid's
chance of getting more thanaverage.
And then here's what to do whenyou've got a bunch of offers
and you're hoping to extract alittle more of a discount from a
particular school.
Speaker 3 (36:36):
Okay, so step-by-step through, so early on then, as
you begin the search process,it's obvious of what you need,
so tell us again.
You mentioned it in an offhandway.
How do parents find this course?
Speaker 4 (36:53):
Sure, you can find the course at meridaidcoursecom.
All one word.
Speaker 3 (36:59):
Okay, we will put that in the show notes and let
people know that.
Speaker 2 (37:08):
So, before we end, I do want to ask you a question
that we didn't tell you.
We were going to ask you, andwe ask all of our friends who
come, and that's what otherbooks could you recommend to
parents who are looking for moreinformation about this?
Speaker 4 (37:30):
So I really love Jeff Salingo's book yes, we do too.
Who Gets In and why?
Speaker 2 (37:43):
Yeah.
Speaker 4 (37:45):
Yeah, you know, you caught me at a moment where I
was just about to reorganize thebooks and I'm looking behind me
.
Right now there's one inparticular that I wanted to
mention, whose title I can'tremember, and I know what it
looks like, but I'm not seeingit.
Speaker 2 (38:08):
Well, if you just let us know, we will put it in the
notes.
Speaker 4 (38:12):
I will.
I am a big fan of Tim Fieldsand Shereme Herndon Brown.
For families who are Black, theBlack Families Guide to College
Admissions is really excellent,and those guys give a great
presentation in person as well.
And my colleague Frank Brunieswhere you go is not who you'll
(38:41):
be.
Yes, if you want to get reallyangry about how admissions works
behind the scenes, the Price ofAdmission by Dan Golden and, as
ever, you know, for generalparenting advice, how to Raise
(39:02):
an Adult by Julie Lithcott Hames.
Speaker 2 (39:05):
That is one of our very favorites.
I want to say yeah Is excellent.
Speaker 4 (39:10):
Okay, and I am so annoyed that I can't put my
hands on this other one, butI'll find it.
We can toss it in the shownotes.
Speaker 3 (39:21):
Okay, we'll toss it in the show notes Sorry, we we
sprung that on you, but but butwhen we talk to people in this
world to know what they wouldrecommend, it just broadens and
broadens what.
What's out there for parents?
You know when, when, when Istarted the college Parent
(39:43):
Central website in 2009, therereally wasn't much.
Parents weren't considered partof this process in the same way
.
So it's wonderful to have awhole set of information like
this, like this.
(40:11):
So we have the link to yourwebsite and then, if people
would like to get in touch withyou, is there any way that they
can reach you?
Or just go to the Merit Aid?
Speaker 4 (40:17):
course website.
Yeah, if you go to ronlebercom,there's a contact button there.
Speaker 2 (40:29):
And I try to respond to everybody although I can't
always do it really quickly, wereally appreciate your time
today.
Speaker 4 (40:34):
Oh, it's my pleasure.
Thank you for your interest.
Speaker 3 (40:37):
This is really such an important topic and we have
(41:01):
steered away from really talkingmuch at all about financial aid
because it is so complicatedand so mysterious that we don't
want to muck it up.
We really need the experts likeyou.
So thank you for your book andeveryone should read it.
We will put that in the shownotes.
And it's not I mean it's afinancial book because it's got
all of this information, but itdoesn't feel like I'm reading a
financial book, I think becauseof that emphasis that you put on
.
You know those themes and ourfears and what the work we have
(41:22):
to do and values and all of that.
So you know, we just keeprecommending that book to
parents.
Speaker 4 (41:30):
Thank you so much.
I mean I tried hard to get thetwo exactly right and for it not
to feel dry and bloodless.
So I appreciate that.
Speaker 3 (41:39):
Definitely not bloodless.
So thank you so much and wewill put all this information in
the show notes and perhaps wewill be calling you back to come
and talk some more sometime.
Speaker 4 (41:54):
Thank, you, thank you .
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