Before I was a travel hacker, I was a higher education hacker. In fact, the first glimpse I had behind the rickety infrastructure of the modern economy was when I made a last minute decision to study abroad and my university’s financial aid, which shouldn’t have been applicable, appeared as a $40,000 credit in my account, which almost entirely paid for my last semester in college.
Over the years, I learned more and systematized those lessons, which you can now find all over this site. Of course, just like travel hacking, the higher education finance game is constantly changing, so even though I’m a few years out of graduate school, I still try to stay on top of new developments so I don’t have to restart from scratch if I ever need to to coach my kids, nieces, or nephews through the process.
That made me intrigued, though not optimistic, to pick up the New York Times’ personal finance columnist Ron Lieber’s new book, “The Price You Pay For College,” which you can find an excerpt from here. My pessimism was richly rewarded, since business and finance journalists are the laziest people alive, but the book touches on enough interesting topics that I thought it would be worth using as an anchor.
What Ron Lieber gets right: higher education is about expectations management
All the way back in 2017 I wrote a post about how to get a free education. The process is simple:
- find states that exclusively uses FAFSA to establish aid eligibility;
- find institutions that promise to meet full demonstrated financial need;
- establish residency;
- establish independence;
- only take out federal direct student loans.
You can read the whole post for more details, but anyone who follows these steps can attend college tuition-free.
But I also wrote in that post that you will not follow these steps, not because you don’t believe they’ll “work,” but because it doesn’t fit with the expectations you have for yourself or for your children.
And Lieber makes the same point throughout his book: what you expect out of the higher education application, enrollment, and attendance process is going to shape how satisfied you are with the experience. He encourages parents to begin discussing higher education with their children relatively early, and shaping a shared expectation that’s more rather than less likely to conform with reality. In many ways this is a kind of “regret-minimization” strategy: you are trying to hit the spot in three-dimensional space that achieves a weighted maximum of intellectual satisfaction, personal life satisfaction, and lifetime income. Nobody hits the bullseye, but people who carefully interrogate their goals and expectations ahead of time probably have a slightly better chance than people who don’t.
Flashes of insight that immediately vanish
There are a few genuinely novel observations that Lieber makes in passing, each of which could have been fleshed out much more fully than the short, breezy chapters he actually wrote. For example, he devotes Chapter 11 to the issue of campus mental health centers, and mentions in passing the potential difficulty of coordinating parental health insurance coverage with off-campus providers. This is, in all seriousness, an enormous issue that I know nothing about. Under the Affordable Care Act, offspring can stay on their parents’ health insurance plans until age 26. But if a college student sees a mental health professional and pays with their parents’ health insurance, what information does the parent see on the inevitable bill? Many universities offer discounts to students who decline student health insurance — what are the advantages and disadvantages of doing so?
Likewise, Lieber simply cannot make up his mind whether student “amenities” are driving tuition inflation or not. In Chapter 1 he convincingly argues that tuition increases are driven by the rising cost of instruction and falling state subsidies (a classic case of Baumol’s cost disease). In Chaper 16, he describes colleges diverting “millions of dollars…from the academic spending pot.” Well Ron, which is it?
These are good questions that Lieber does not even attempt to gesture at answering. He just didn’t do the work, and reading his book will not provide any answers to these questions. There are many such instances in the book, where you start to think you’re about to gain some essential guidance, and then the (extremely short) chapter abruptly ends.
Many of Ron Lieber’s “questions” have definitive answers
The subtitle of Lieber’s book is “An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make,” but it would be much better subtitled “Questions Ron Lieber Was Too Lazy To Answer.”
For example, he devotes one of the longer chapters (Chapter 30 weighs in at a whopping 14 pages!) to “All Your Questions About Saving for College and 529 Plans,” and near the end poses the question: “What’s the best 529 plan in all the land?”
His answer: “Again, it’s hard to say.”
It is not, in fact, hard to say. Ron Lieber just didn’t put in the work. The answer is, maximize your tax-advantaged contribution to your in-state plan, then contribute to either Utah’s my529 plan or Nevada’s Vanguard 529 plan. You can find extensive information about prepaid 529 plans here as well.
If “The Price You Pay For College” has a lesson, it’s a lesson about the importance of asking questions. But asking questions is the one thing Lieber almost ostentatiously refuses to do. The book is essentially a series of vignettes cobbled together from his columns over the years, with a few interspersed references to the pandemic, which apparently struck just before his book’s deadline, compelling him to at least gesture at it lest the book lose relevance entirely.
If I sound annoyed, it’s not because I didn’t learn anything from the book. As I mentioned above, the question of mental health coverage and the resulting privacy concerns for students is a genuinely interesting question that I now know I want to learn more about. I’m annoyed because I and, presumably, a few people like me have actually done the work to learn about strategies for choosing and paying for higher education, and Ron Lieber didn’t. He just turned a 1,200 word column into a 300-page book.
In my next post I’m going to leave Ron behind and share with you my version of the short essay Lieber’s book should have been.