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We all know that choosing a college is one of the biggest investments your family will ever make, but it doesn't have to be the most stressful. Each and every episode, we pull up a virtual chair to cut through the jargon and tackle the real-world questions about admissions and finances and even the financial health and viability of colleges.
Gary Stocker (00:00.992)
You are listening, the Kitchen Table College Chat. Hi everybody, Gary Stalker alongside Mark DeBore. And and we've talked about this before. Choosing a college, looking at colleges, trying to put colleges on your list or not is tough and it's stressful. And what Mark and I try and do for every episode is provide perspective. You may agree with some of our perspectives. You may disagree with some of our perspectives. We find we we we provide tips and guidance as well that should be useful to many folks.
And and Mark, always good to do the show with you. I guess you're doing some kind of summer taxicab driving today.
Marc (00:33.782)
Yes, yes, yes, yes, as is the role of any young parent.
Gary Stocker (00:40.014)
So so we had a couple questions from last week. And we talked last week about artificial intelligence for high school students, not really these colleges as much. And somebody asked us in a response, Do you anticipate colleges charging fees, either anti cheating fees or artificial intelligence fees in the coming years, Mark? What do you think?
Marc (01:01.399)
I think it's a reality. think, you know, colleges, they can only raise tuition so much. So one of the easiest ways to raise prices is to create fees. And here we are. And that's easy way to say, nope, our tuition has been flat for 10 years, yet somehow our price got more expensive.
Gary Stocker (01:24.502)
And then the second question we had was kind of ties into what we're going to talking about today, and that is tuition and costs. And we had a parent ask us, what's negotiable when you're looking at choosing a college, and what's not negotiable?
Marc (01:39.414)
Yeah, I would say, you know, I would, I three things come to mind. Not negotiable, well maybe four. Not negotiable right off the bat, easy one, books and supplies. Number two, room and board that is living on campus in a residential hall, along with having a food plan, which usually you're required to have a food plan if you live on campus. And the things that are negotiable, obviously number one, we've talked about a thousand times, tuition, but maybe number two that most people miss is what's negotiable is the scholarships you receive.
that you can attempt to negotiate your financial aid, your merit package. Doesn't mean you're going to win, but those are topics of discussion that you can have, right? Anything else I'm missing?
Gary Stocker (02:20.78)
Well, no, and it ties in nicely to our topic today and and the theme, the topic of today is tuition does not equal cost. And Mark, I wanna lead off with this. again, tuition does not equal cost. And we talk we you know we're talking before we started recording that we could go three hours on this. But here's the perspective I want to share with moms and dads, grandpas and grandpas, grandpas and grandmas, aunts and uncles in the twenty first century, in twenty twenty six.
Marc (02:39.367)
Yeah.
Gary Stocker (02:49.176)
Colleges need you a lot, a lot more than you need them. And Mark, I think that's gonna tie in to what we talk about a lot today.
Marc (03:00.39)
Yeah, I'm first of all, I'm surprised to hear you take that position after our last podcast where you were pro college. But you're absolutely right. And you know, the analogy I think we can run with today, as are most my analogies related around cars is, you go to a car and they tell you, hey, this Toyota Camry is $40,000 and all is great. And then when you leave,
Gary Stocker (03:07.713)
Hey, I was playing a role.
Marc (03:27.027)
You had the sticker fee, the doc fee, the tax fee, the DMV fee, the paint protection fee, and all of a sudden it's $49,000. It's really the same topic with college. It's not just tuition is your price, you know, your $40,000 for your total camera. It is tuition plus fee plus fee plus fee plus your fee five, Faux Fum fee. It's you name it. And that's I think we really need to uncover.
So, so I think, you know, maybe kicking it back to you, do you have any, you know, purely opinion-based? Why do you think everyone associates college with tuition and tuition with college and not everything else?
Gary Stocker (04:09.582)
Culture is what culture is. And we're used to seeing a list price on everything that we buy, whether it's at Target or the car that when we buy cars or anything like that. And then here's here's the unique, I guess it's unique, attribute in higher education. There is research out from the National Association of College, something or others, that shows the average discount for private colleges in 2025 was 57%.
So a college with a listed list price tuition of we'll say $40,000 to make the math easy. $57% of $40,000 is much less than $40,000. So let's make it easier. Let's make it for every $10,000 in tuition. Colleges are discounting that price, $5,700. So you're paying $4,300 for every $10,000.
Marc (04:46.142)
Yep.
Marc (05:00.945)
.
Gary Stocker (05:07.8)
Alright, I'll pause for those of you not good at math. For every $10,000 in a college's list price tuition, if the discount is 57%, that's average. Those students are only paying forty-three hundred dollars again for every 10,000 in total tuition. Now, here's the adage on that. Great for the student. Great for the student to pay much less than 50%.
But Mark, in too many cases, not so great for the college itself because they are foregoing revenue and that revenue is oftentimes really needed to keep the lights on, to meet payroll, and many other things like that.
Marc (05:46.044)
Yeah, and that's the type of topic we can dive into. There's not many revenue sources for a college. We have alumni donations, we have government grants.
We have anything, your endowment outputs, dividends, interest, capital gains, et cetera. You have all, you have auxiliary income. and then you have room and board. So when we really look at that, you know, the parents or the child, they're not paying, you know, the donations, they're not paying the grants, all that. So really where is the college getting their money from us, the people. And, you know, I think most of the answer is room and board.
Gary Stocker (06:03.298)
Fees you mentioned.
Marc (06:27.14)
Because at end of the day, the college has got to pay the bills. So if they're discounting their tuition so heavy, where are these hidden costs coming from to the parents?
Gary Stocker (06:36.898)
Well y yeah, yeah, absolutely. And then there's a couple of ways that that the higher education media challenges this discount rate. And and there's something known as a chievous regal effect. And this was it is it was from a long time ago and I had the definition up earlier, I think I lost it. But achievist regal effect is you you price something really high, and a high price is supposed to imply high quality. So colleges have gotten to the into this age old practice.
Marc (06:50.393)
Well, that's a fancy word right there.
Marc (06:55.501)
You
Gary Stocker (07:06.262)
Of saying my list price is sixty thousand, because it's supposed to say I'm a really good college, but what's fifty-seven percent of sixty thousand? It's twenty-five thousand and change, something like that. So colleges have been guilty of trying to artificially say we're good, we're quality, we're high quality, by raising the price winning reality mark, they they're not generating the net revenue needed in too many cases to meet payroll, keep the lights on, and all the costs associated with running a college. Students
Marc (07:20.862)
Marc (07:34.813)
But wouldn't you say that's more private school related than public school related?
Gary Stocker (07:40.899)
Yes. Yeah, absolutely. Pri public schools discount, but they don't have to as much as privates because you and I subsidize public schools through our taxes and and that's fine. That's that's the way things are set up. But the confusion the confusion that this creates for again, in large part private college parents, is they see a list price of seventy five thousand and they assume in too many cases, and the literature suggests most cases, that that's the price. Markin, seventy five thousand is not the price.
Marc (07:47.17)
Yeah. Yeah.
Marc (08:09.207)
Correct. So now do you know in your research and all of your time, what the average cost of room and board is in public versus private? What an average number would be?
Gary Stocker (08:22.766)
You know, I'd I'd I'd have to look at my at my numbers to be sure, but in the last couple of years I've seen it skyrocket for a reason that you mentioned a minute ago that students and families look at tuition, they make their decision in part based on tuition and faculty and majors and all that kind of stuff. And the rumen board is kind of an afterthought. And let's go back to another factor, you know, that that is endemic in higher education. You look at colleges, you're accepted by colleges, you choose a college.
Marc (08:35.67)
Please.
Gary Stocker (08:50.4)
And then they say, by the way, here's your price. Here's your tuition. And I can't tell you in the last couple of months because of that May 1st deadline this year, how many articles and news stories I've seen where reporters, higher education professionals, and students and families saying, What the heck? Why what else do I make a decision to and don't know the price until after I make the decision?
Marc (08:55.093)
Yup.
Marc (09:14.031)
Yeah. And then I feel like to some degree, the problem becomes, I've seen it a million times where the same exact scenario happened that you just said, all is well. We negotiated tuition. Tuition's great. It's a number we agree on, you all the parties. And then we give them the final bill, which is all the fees, the computer fee, the public safety fee, room and board fee. And now the problem is it's 20%, 30 % higher than I originally thought it was going to be.
But now little Johnny is committed. He's hooked. I can't not go to this school. Mom and dad, you can't. I have to go to this is the school. But little Johnny, it's 30 % more expensive. Little Johnny, though, he chose the school. He already made friends there in the summer orientation. So how do you have that conversation as we're at the proverbial kitchen table? How do you have that conversation with little Johnny saying, hey, well,
Gary Stocker (09:47.448)
Yeah.
Marc (10:11.272)
I'm sorry, but we're gonna have to look at College B. Or Option B.
Gary Stocker (10:16.586)
What a a sad, sad, sad commentary on a what in theory and in some ways in practice is a prestigious industry. It educated you, it educated me, it educated my spouse, my children, many of my relatives, and and like I think I shared with you before, Mark, very successfully. Very successfully. But it the higher education is so slow to change that they are they are
entrenched with this hiding the price until the last minute model. And I can't I can only guess at how many conversations like you just described, when a child was is emotionally hooked on a college and the parents and and the student find out that the college really is a few many thousands of dollars more expensive than they originally thought. And there's even been efforts, Mark, to standardize the the college financial aid forms. And colleges are are
Marc (10:54.877)
Mm-hmm.
Marc (11:13.341)
Yeah.
Gary Stocker (11:14.766)
They push back against that, they lobby against that, because I can only engage in educated speculation, they like to hide things and that's not good.
Marc (11:24.169)
Well, I would say it's because most of their money is coming from the federal government in the forms of loans and you don't bite the hand that feeds you. So moving on, another, I want to talk about another hidden costs that's more than tuition, but in a different way is at least the trend I was seeing when I was in higher education for, for 15 years is 16 years.
the overwhelming number of students coming in either A, undecided or B, two years in changing their major. What parents don't go in with the idea, especially when their child goes in not knowing what they want to do, the hidden cost of either A, changing majors, because sometimes majors can cost different relative to the per credit dollar, or the fact that this is going to cost an extra year.
We only agreed to four years, little Johnny. And now little Johnny says, hey, guess what? I want to be a whatever major. It's going to be five years now.
Gary Stocker (12:33.27)
And it's not just the actual cost of tuition for that extra year or two. It's the room and board costs. But Mark, I would offer that's not even the most significant component of changing majors or having to change colleges because the college closes or it cuts your major or you just choose to go somewhere else. And I can't remember if you and I have talked about this. I know I've talked that talked about it on other media that I've done. It's the opportunity cost.
Marc (12:42.085)
Yes.
Whoa!
Marc (12:51.898)
Yes.
Marc (12:59.898)
Yes.
Gary Stocker (12:59.926)
So you and I, I'm guessing you finished college in four years. I finished college in four years. That was a standard then. It should be now, it's not. And after four years, I started earning income. Now, back in 1978, when I did that, it was six dollars and fifty cents an hour to work in a medical laboratory. It's quite a bit higher than that now. But the point, the point, I shouldn't have said that. The point is these students therefore going, let's let's call it the for each additional year of college, therefore going somewhere in the vicinity of 40.
Marc (13:03.44)
Yep. Yep.
Marc (13:09.786)
Yes.
Marc (13:15.813)
Mmm.
Marc (13:20.588)
haha
Gary Stocker (13:28.408)
to fifty thousand dollars in earned income that they will never, ever, ever get back. So Mark, to your point, to your point, choosing that major is probably best done well in advance of starting that college selection process, as difficult as that is for seventeen and eighteen year olds.
Marc (13:34.937)
Yeah.
Marc (13:47.888)
I say the problem is, and the problem is not the right word, the challenge is how do you go to a seven, every, not some, all 17 year olds in America, in the world, and say, hey, you must know now what you want to do for the next 60 years. And the challenge is maybe you could make that argument 20 years ago, 40 years ago, 60 years ago, but now with current 17 and 18 year olds entering college,
Kind of knowing that in four years that AI will probably replace that major or that job. How am I supposed to know what I want to do when the job I'm going in for is probably gone and replaced in four years?
Gary Stocker (14:31.896)
You know, in interesting, I'm I'm gonna wing it here. A lot of times I I I a lot of times I can go off the cuff, sometimes I have notes in front of me. But maybe this is another negative for higher education, based on the point that intelligence, artificial intelligence will change things. We don't you know, I don't know how exactly, and that maybe more of an incrementalism approach to higher education is in order for today's eighteen year olds. Maybe
Marc (14:34.82)
The only way to do it.
Gary Stocker (14:59.916)
Commitment to a major is not reasonable in many cases, unless you're gonna be a physician or an attorney or an accountant. I'm not that sure. That's the best example. but maybe it's it's it's it's just get your feet wet. Maybe it's at community college. Maybe colleges should offer a set of courses that help decide what major you are most amenable to.
Marc (15:10.19)
Thank you.
Marc (15:15.508)
Yep
Marc (15:25.516)
Yeah.
Gary Stocker (15:25.912)
'Cause how many times have you and I read in the literature and in the media that AI is changing everything today as you and I speak? And to project four years, six years down the road is a very, very challenging task to do.
Marc (15:38.275)
Yeah, I agree. so I have two more, I mean, at least two challenging questions come to my mind because the last few episodes, I was a little too kind to you. So I have two questions that come to my mind and kind of on the same topic, which was we already talked about kind of private versus public relative to tuition and costs, but knowing that private costs more than public and staying on topic of tuition and the fact that
Gary Stocker (15:49.333)
please.
Marc (16:06.092)
college costs a lot more than just tuition. If you were the parent listening to this at the kitchen table, should you be choosing private versus public based solely on tuition and its hidden costs, which should have more of an emphasis, private or public?
Gary Stocker (16:26.786)
What I'm seeing, and and each summer or really all year long, I have s I have a lot of Google alerts. A lot of Google alerts. And one of them is for enrollment announcements. And and for the last three or four years I've been watching them closely. And there are many colleges say our enrollments up. Whether that's whether that's true in context or not is a c is another question. But what I what I also note is the colleges that don't make summertime enrollment announcements.
Marc (16:32.981)
No!
Gary Stocker (16:55.168)
And that's kind of a no news is bad news scenario. They're not about to say our enrollment's down, because that will that will chase other students away. And what I'm anecdotally seeing, and I don't have a way to document this, just watching these alerts, is I think we're already smack dab in the middle of a move away from privates in general toward toward publics and brand names. Now they're brand name privates and their brand name pu publics, I understand that. But
Marc (17:00.277)
Yeah.
Marc (17:16.382)
Mmm, yeah.
Marc (17:22.442)
Sure.
Gary Stocker (17:24.926)
If my anecdotal observations are correct and the market is moving away from what may per be perceived as not either not well recognized brand names or financially challenged financially challenged colleges, what happens, Mark? If I'm right and there's a move away from privates in general to publics, and I'll be honest, and I've asked this question to many, I don't have an answer.
Marc (17:50.239)
feel if I had to guess, right, because we're, we're, we are opinionated here. I feel like what we're going into is the world of mergers and acquisitions and higher education, where you're going to see, so like this, the state I live in New Jersey, the main campus, the main schools, Rutgers, and you're just going to see the name of the private school and that's going to be the campus for Rutgers. And there, instead of their three campuses now, they're going to buy up four or five struggling small privates. And it's going to be, you know,
Gary Stocker (17:53.997)
Ha ha.
Marc (18:18.82)
name of struggling private school campus slash Rutgers. And there's just going to be and A, and A, because at end of the day, there's still the number of bodies and the number of seats will be needed. And it's, it's simple supply and demand.
Gary Stocker (18:22.818)
Yeah. Yeah. Yeah.
Gary Stocker (18:37.366)
Yeah. And you know I'll I'll wrap the discussion up today with a with a
Marc (18:40.446)
wait, but I still had one more good question to ask you. One more, one more challenging and super easy. All right. Would you rather, you, you the parent, would you the parent, would you rather go to a $70,000 college where you can guarantee your student will graduate in four years or would you rather go to a $30,000 college, but your student's probably going to take six years?
Gary Stocker (18:43.38)
One more one more good question. All right, Mr De Borgo.
Gary Stocker (19:08.878)
Well, that's easy. Time isn't time is important. Time is irreplaceable. I'm going and I'm assuming at seventy-five thousand I'm getting that fifty plus percent discount. So that I'm gonna net me out thirty-five. And the same for the thirty thousand cat was an example. It's gonna net out fifteen thousand, give or take. But time is important and and you get a you get if you get a two-year jump on the game because you can graduate in four years. It also says i if if if a college has a four-year graduation rate that's higher than its competitors
Say in the 60 or 70 percent range, it has systems and processes in place and probably recruit students capable of graduating in four years, whereas that $30,000 college probably can't afford the systems and processes and is recruiting students, Mark. And keep in mind, this is my business, they are recruiting students who are probably some of them, if not many of them, not academically capable or even financially capable of attending college and graduating anything close to.
Marc (19:40.112)
Yes.
Marc (19:44.656)
Yes.
Marc (19:53.19)
Yes.
Gary Stocker (20:05.656)
To four years.
Marc (20:07.024)
Yeah, yeah. Well, unfortunately, that was too easy of a question. So next podcast on the harder question for you.
Gary Stocker (20:15.212)
Well, it it just could be getting, you know, talking with you every week, Mark, that I'm getting smarter. That's that's that's that's it's an unlikely scenario, but it's a reasonable scenario. And you know, we've we've talked that tuition does not equal cost. And if you are a first generation if you're f a parent of a first generation college student, you didn't get the chance to do college yourself, or if you are a grandparent or a relative, what we talked about today is important.
Marc (20:19.963)
It could be, it could be.
Marc (20:26.587)
haha
Gary Stocker (20:43.64)
When a college lists its tuition as seventy five thousand dollars to use the example Mark just had, it's it's a private college, it's not. Even public colleges are not listed that high. They are going to have some flexibility to discount tuition because private colleges, Mark, are now just getting discounting tuition so much that the pricing is marginally competitive with publics. the privates discount their tuition a lot more, but seventy five thousand less fifty percent is thirty three thousand, and some publics are in that vicinity as well, and they can discount
their tuition a little bit, not as much as you see with public. So tuition does not equal cost. So Mark did a good job at the top of the show talking about the fees that colleges are using. And nothing wrong with that. Nothing wrong with adding those fees. But the the you know, we haven't talked return on investment for a long time and we'll have to make sure we have it that topic somewhere down the road. But if the college, you know, we'll use forty thousand, fifty percent discount is twenty thousand times four years, that's eighty thousand on the top. Let's assume ten thousand a year in
Board that's low. That's another 40,000. That's $120,000 without accounting for travel and gifts and whatever else comes into play. And is it worthwhile? Mark, in my case, yeah, it wasn't 120,000 back then, but it was equivalent back then. And it was enormously worthwhile. But the challenge that you face, moms and dads, and all those other relatives, is it's a different industry. And there are Mark way too many colleges.
Marc (21:51.204)
Yeah.
Marc (21:55.311)
You
Yeah.
Gary Stocker (22:10.678)
Way too many colleges, way too many college seats, and not enough students willing to pay even heavily discounted tuition for those seats. So as we've talked before, you got questions? Send them to me. Send them to Gary at college viability. That's one really long word. College. Gary at college viability.com. We'll add them to this to next week's show. And and next week looks like our topic is going to be your major was cut. This is one of my specialties.
Marc (22:24.633)
you
Just.
Gary Stocker (22:38.572)
Majors are being cut regularly from both public and private colleges. Mark and I are going talk about what that means. I'll give you a tool you can use to monitor whether the college or colleges you're considering are cutting majors or should cut majors or not, and we'll provide some guidance on that as well. So it's a challenge. It's it's it's not fun. parents that are going through it now know that Mark will be going through it in a few years, and I'm sure he will lament those challenges his wife face in the coming years when their kids start that college preparation process.
Marc (22:40.441)
you
Marc (23:01.175)
You
Gary Stocker (23:06.767)
And like I've shared before, we will be moving this to a live stream so that you can ask your questions during the show itself. We'll let you know when that's gonna happen. So for Mark Debor, I'm Gary Stalker. Thanks as always as making time for making time for the kitchen table college chat. We'll talk again soon.