B (3:41)

Indeed. Gene, it's so good to be back with you again. I'm thrilled to be here.

A (3:46)

You have never been afraid to challenge conventional wisdom. Indeed, you've written a string of books with the title the Truth about. And this time you are taking aim at something that I think a lot of people consider to be sacred. It's a global rite of passage. So let me just start with the big question. Is college still worth it? And what has changed so dramatically in the last few decades that I know you're going to say it's not?

B (4:20)

Yeah, college certainly can still be the best path for the high school graduate. And in fact, 60% of high school grads do immediately go to college upon leaving high school. And great. Wonderful. We know that college is the path to prosperity and happiness. We know that college grads earn $900,000 more over the course of their careers than those who don't go to college. We know that college grads have half the divorce rate of non grads. That college grads live healthier lives. They live on average seven years longer than people who don't have a degree. So clearly, college can be the path to prosperity and happiness. But the problem is that about 25% of college freshmen drop out and only 62% graduate after six years. The average student leaves college with $42,000 worth of student loan debt. Ten years after graduating, only half of graduates are in a career that needs their degree. And 20 years after graduating, 42% are still paying off their student loans. This means that college is a wonderful thing, the road to prosperity and happiness only about half the time. Which means going to college today is really nothing more than a flip of a coin. And that's a pretty lousy scenario for freshmen college students and their parents. And that's why the choice of going to college today has to be completely re evaluated.

A (5:53)

Can I just push back on the flip of a coin? Because in all of those statistics is buried a story, I think, of the people that should go to college and perhaps the people for whom college is not the right choice. Or at least the right choice. As an 18 year old high school grad, that's a little different than the flip of a coin. And I think what you're trying to do with this book is to help people recognize the scenario so that you take the, you take the odds out of it, you take the randomness out of it. How do we back up and start to explore who we are, what our finances look like, and where the opportunities truly lie?

B (6:48)

You're exactly right, Gene. And that is exactly what the book is all about, as you know, is that we don't have to make it be a guess. And 80% of incoming college freshmen are undecided or undeclared. 30% change colleges during their career. They realize this the major they chose or the school they chose isn't correct and they need to change one or the other or both. That causes a delay in their ability to graduate because the classes they took in the old major are no longer applicable, or the credits they earned in the old school are no longer counted by the new school, forcing them to retake the classes. Which just adds time and money to the effort of getting a degree. So what it really means is that far too often kids are leaving high school and immediately going to college when frankly they probably shouldn't because they don't know who they are. I mean, at age 17 or age 18, how do they possibly know? And because the cost of college is now so huge, that creates a very dire circumstance. It wasn't that big a deal for you and me if we went to college. And by the way I did, and later changing my major, it really didn't matter a whole lot if we changed schools. It really didn't matter a whole lot if we took a little longer. Because college way back when was so inexpensive and the economic reward of the degree when we emerged was so powerful. It was a great ROI return on investment. But today that isn't really the case. With colleges costing anywhere from 100,000 to $400,000 for an undergraduate degree, you really need to have a pretty good idea of whether or not this is the correct path. Meaning that well meaning parents and guidance counselors in high school and other mentors of children who are trying to do the best for the child can't automatically knee jerk reaction say, oh, you definitely have to go to college. Because the way we went to college 20, 30, 40 years ago is not the experience that today's teens will have. And that's what we need to recognize, as you've noted, that if we have Our eyes wide open. We understand what going to college today means. We understand the impact of AI and technology on careers, and we understand the cost of the degree and what the incomes are that they're likely to earn in the field once they enter it. They can make a more sober, mature, reasoned decision. And that decision, maybe, just maybe, might be let's not go to college or maybe let's not go to college immediately, or maybe let's choose a different path until we can grow up a little, mature a little, have world experiences a little, to be able to make a more informed decision. So that coin flip isn't a coin flip anymore.

A (9:23)

We're going to take a quick break. Back in a sec. We are talking with Rick Edelman, author of the new book the Truth About College. I know very, very few 17, 18 year olds who know what they want. The young woman who grew up next door to me in Westchester county, wanted to be a dentist since she was five years old and is now a first year student at NYU Dental School. She's the only one I know. Right. She is a outlier. I went to college thinking I was going to be a systems analyst because I was good at math in high school, good at computers in high school, good at completely changed course, came out with an English major and I think my experience is a lot more normal.

B (10:16)

Yes.

A (10:17)

With that as a backdrop, how do you decide if college is the right next step if you don't know exactly what you want? And how do you approach the choice of college in an intelligent way, keeping finances front of mind when you really are not sure what you want to do when you come out?

B (10:44)

Yeah, it's a very valid question. And it's the key question that parents and teens ought to be talking about together. And the key is to recognize that college immediately out of high school is no longer the only path. It's no longer necessarily the best path. It's okay to pause. It's okay for the child to tour the country, tour the world for a year or two, get to know themselves, see what the world is like. It's okay for the child to monitor college classes while still in high school. Read college textbooks, which you can do for free or extraordinarily low cost to see if studying in this field is as exciting as you thought. What that student ought to do, who wants to go to dental school is, is go talk to dentists, go hang around a dental office and see what life is like in dentistry. Very often students discover that learning about a subject is a whole lot more fun than being in that career. And the opposite too. I know a lot of people who hated law school but love being lawyers. So you get to understand this by hanging around the people who are already doing what you are aspiring or considering to do. Because you're absolutely right. Most kids don't know what they want to do. And that's one of the benefits of college is the exposure to what's there and available in the world. But that doesn't mean you need to matriculate at $75,000 a year to figure that out. You can engage in this through advanced placement courses or dual enrollment classes. You can go to community college for a couple of years. You can go into the workforce and have tuition reimbursed by your employer. You can go into the military. You can go into AmeriCorps or Peace Corps. You can do an awful lot of different things. But here's what it all comes down to and the reason most don't do this. Two reasons. Number one, they're not aware of these opt options. Number two is the social stigma.

A (12:28)

A hundred percent fomo.

B (12:31)

Yeah. Parents want to brag, quite frankly, my kids going to Vanderbilt. They don't want to say to their friends at the country club, my kids going to community college. High school guidance counselors are basically rewarded in their careers by how many high school grads go on to college. That's how high school principals are evaluated. It's how teachers are evaluated. There's this thing about pushing them into school. Presidents do this. Every president wants to brag, more kids went to college into my tenure than my predecessors. So everybody is pushing the kids. Even the kids are doing it to each other. As soon as they get accepted, they are bragging in the hallways of high school, guess where I'm going next year? And it becomes a one upsmanship kind of environment. So for a high school student to say, I'm not going or I'm going to community college or I chose the military, there's a social stigma attached to that and that isn't helpful. It's not healthy for anybody.

A (13:26)

How do we get past that?

B (13:29)

We need to recognize that the key is to understand that college is not about career. It was for you and me, but that's not the case today. College is about preparing these students for life. And that means happiness, prosperity, and for what many are arguing today, a work life balance. We need to recognize that if they're going to come out of college with 40 or $80,000 of student loan debt. I just met an attorney a couple of days ago, she told me she owes $242,000 in student loans. And I said to her, your life is over. I mean, I was just kind of blunt with her, economically speaking, she's done. She has to practice corporate law, even though it isn't the form of law she wanted to practice, because that's the only way she'll be able to earn enough money to pay off this massive student loan debt. Nobody told her what the economic impact of that debt would be. Many kids go into college thinking of pursuing a passion, a career, without regard to the economic reward of that career. And it's wonderful if you want to be a social worker or a physical therapist or a school teacher. But if you're going to spend a quarter of a million dollars to get that degree, saddling you with $100,000 of student loan debt, where you end up paying 30% of your income in student loan repayments, you're not going to be able to buy a house, buy a car. It'll delay getting married. It'll delay having children. This is what the survey data is all telling us. It's having an adverse impact on their lives. Last year, 300,000 schoolteachers quit, and the number one reason they said was because of the compensation. We need to recognize upfront, what is the lifestyle that the career you're thinking about is going to provide for you? Because lifestyles are built around money. So how much income is that career going to provide to you? What's that going to mean for your ability to buy a home, buy a car, have children, get married, take vacations, enjoy yourself in life? And let's evaluate the college path not just in terms of what career am I going to get, but what lifestyle am I going to enjoy. That's the equation that parents and teens aren't considering in the college consideration journey.

A (15:39)

Mark Cantrowicz, who is an expert in student lending and student debt, has a rule of thumb that you should borrow no more for all four years of college than you expect to earn in that first year out of school. Is that a rule of thumb that you agree with, or do you think that's too low or too high?

B (16:02)

I like the fact that he's putting a very low limit on the amount of indebtedness. So I do like the fact that he's creating an equation that parents and teens can apply. I do like that. However, my personal preference and what I argue for in the book, the Truth About College, is that your goal really should be to emerge from college with zero debt. You should the goal should be, and I make it pretty clear in the book, to graduate in four years debt free, on the dean's list, ready to enter a career the child wants to enter. And the reason you need to be debt free. Many people say there's no way I can do that. My answer is then the child shouldn't go to college. They should choose alternative paths. And the cool thing is that today there are so many ways to get a college degree for free. 35 states make community college free, guaranteeing your enrollment in the four year school. 25 states make the four year schools free. Hundreds, thousands of employers will now pay for your degree. If you work while going to school, the military will pay for your degree. Apprenticeships will pay you to get the training and then give you a job when you're finished. There's no reason in many fields to justify indebtedness to get the education you're seeking. So I'm not saying no to education. I'm saying no to the old school antiquated approach of college, which is out of date and obsolete.

A (17:25)

We're going to take a quick break. When we come back, I want to talk about what parents who already have that child in college who is struggling should do. Back in a sec. We are talking with Rick Edelman, author of the new book the Truth About College. So you mentioned the six year graduation track that so many kids find themselves on. And it is expensive. It's problematic, it's demoralizing. A lot of parents find themselves in the situation where they've got a child already in college, that child is not thriving, they're not figuring out a major or a clear path. What do parents, aunts, uncles, grandparents, the adults in the room, what do we do to help them course correct before it gets more expensive than it already.

B (18:17)

Is, Number one is to acknowledge it, to recognize it, to really talk with a student and understand where they are in their head and in their heart and in the college environment. The most shocking statistics that I came across in my research for the book was that 50% of college undergrads have been diagnosed with depression. Not that they're depressed. They've been diagnosed, which means they actually sought treatment and have been diagnosed this way. 24,000 students last year attempted suicide and 1100 of them succeeded. Students are facing incredible stresses in college because they understand the challenges of succeeding in school, the huge debt they're incurring to get the degree, and the uncertainty of life upon graduation. In today's job market, which is being threatened by AI crypto and other Exponential technologies. So the pressure's on. And if the child is experiencing all of this as a freshman or a sophomore, mom and dad need to be tuned into this and pull the kid out of school if necessary. Take a breather, take a pause, do a reset. The child can always return to school. In fact, 30% of students are over the age of 25, which means it's incredibly common for adults, I'll call them, as opposed to the post High School. Teens 18 to 22 are going to college these days because they recognize that you don't need a degree, you don't need to do it immediately out of high school. It's okay to say, let's take a break. Let's focus on your mental health in addition to your career path.

A (19:57)

You're making me think about my father. When my mom passed away last year, my brothers and I sat down and went through all the papers. There were just scads of papers and family documents. I found this letter that my father, who was not a very good student in high school, he used to say that his mother spent more time in the school than he did because she was called to the principal's office so often that he wrote to his parents. He had gone into the Army. He had worked for a couple of years in real estate. And while he was in the army, he discovered that he liked radio and came back from that experience at the age of 26 and decided that he was going to go to college and he was going to study communications and had an incredibly successful career and got all A's when he finally went back to school. But sometimes I just, I do think we have to grow up. I would have been better off waiting a year. I think I begged my kids to take a gap year. Neither of them wanted to because they wanted to go to school when their friends went to school. And they're fine. But this idea of just a little bit of maturity, I think is so, so powerful. In the book, you list jobs that don't require a college degree, and honestly, a few of them were somewhat surprising. Can we talk about those that are in particular high demand right now? Things like pilots and police detectives and dental hygienists. The list goes on and on and on.

B (21:32)

And that's a key point people need to realize, is that today you don't really need a degree to have a high paying, successful career. And you just named three of the greatest airline pilots. Average $102,000 a year in income, no college degree required. And by the way, that $102,000 income of pilots is more than the average income of college grads. So you can save the six years by immediately going into the career. And not only do you avoid the cost of college and the indebtedness associated with it, you enter the workforce six years earlier. That's six extra years of 401k participation, which adds hundreds of thousands of dollars to your future retirement security. So you can enjoy your life much faster, eliminate the debt, eliminate the anxiety and the financial worries associated with it, and have one hell of a good time. I also cite the hundreds of careers that are going to be threatened by AI. And this is something else that people need to be paying a lot of attention to.

A (22:28)

And that was a very long list too, at library assistants, legal secretaries, office clerks, landscapers. You're going to have to explain that one to me.

B (22:37)

Well, the reason is quite simple. Between a combination of AI and robotics, we are now using machines to do what humans used to do. So a lot of landscapers spend a lot of their time in cutting shrubbery, mowing the lawn. We already have consumers buying automated lawnmowers the way we have the automated vacuum cleaners in our homes. So we are already using bricklayers that are automated robots. Amazon has hundreds of thousands of robots in its warehouses that work used to be done by humans. This is going to accelerate over the next decade. And it's even some of the most fundamental and respected careers. Number one on my list are accountants. We're always going to need accounting, but we're not going to need accountants because that's just numbers. And those numbers are automated. The data is automatically sent to the irs. The IRS already has it on computer systems. People are already using QuickBooks and other programs to prepare taxes and record their banking and so on. So we're going to have a dramatic reduction in the need for accountants 10 years from now. So for students to go into an accounting field, to take five years to get that degree and then have to go two years to get their cpa, they're likely entering a career that may well not exist in the future.

A (23:53)

One of the things that has been scariest to me over the past couple of years from AI is the threat to people in the coding professions. It was not even five years ago that when we on this show were talking about careers that were future proof, we were talking about go to a coding boot camp or get a nursing degree. You will always have a job. And, and I know that a lot of coders feel incredibly threatened right now. So as you read the tea leaves what careers are the most future proof?

B (24:35)

So it's not a question of career, it's a question of ability. And there are four skills, four traits that are going to be prized by employers into the future. They are prized right now. And this will grow. Thinking, creating, managing and communicating. Automation is wonderful, but we need to tell the robot what we want it to do. AI is great, but we need to instill the prompts to get the output we're seeking. So you got to think about what you're trying to accomplish. Then you need to create to turn it into reality. Then you need to be able to manage that process, which often involves managing people as well as machines. And fourth, you need to be able to communicate that. Frankly, Gene, that is your greatest talent. You know a lot about personal finance. We've been doing stuff forever, but you know as I do, that there are a lot of smart people in the world of finance and most of them can't explain a thing in plain English. Your ability to communicate the knowledge is what sets you apart. And that skill set is irreplaceable. Technology isn't going to undo that. So what I'm really saying is coders like you, I agree with you. Five years ago we thought coding was a great career and in fact they were highly paid. Quarter of a million, half a million a year because they were so sought after. Today, AI is doing the coding instead. You don't need to learn how to code. Coding as a career is a dead end job because all you learn to do was code. What instead is being focused on are the liberal arts. And this is shocking. We all thought liberal arts were going to be dead in a world of technology. Instead we're discovering it's the liberal arts that teaches you to think, create, manage and communicate that are going to be prized by employers in the future.

A (26:18)

It's so true. I was with a Penn professor the other night who is an expert in education studies, the field of education and the sorts of changes that you've been talking about and that you write about in the Truth About College. And he made the point that philosophy majors are sought after right now. Philosophy majors. I mean that was your parents nightmare that you were gonna go major in philosophy and now they're getting jobs. As we wrap this up, many of our her money listeners are in the later years of their careers. I love the epilogue of the book where you shift the focus to lifelong learning and you point out that many people who are earning over a hundred thousand dollars a year are spending thousands to keep learning. Whether it's a course, a conference, a boot camp. Let's focus there for a second. And we're doing it in this house. Not me, but my husband, who is semi retired, is actually taking Russian history at Penn from a, you know, a noted professor for very little money and having a very, very good time doing it. So. So where do you look for the best in lifelong learning opportunities?

B (27:33)

Well, it's really essential because, you know, back in the day, you could go to college, come out with a degree, enter that field, and do it for 40 years and then retire. That isn't the case any longer because half of what you learn as a freshman is obsolete by the time you're a senior. So we have to engage in lifelong learning. It isn't about college degree. It's about staying current with what's happening in the world. And it means engaging in knowledge pursuits that broaden your own horizons. So Russian philosophy, Russian history. Brilliant. Of course we need to do that. It keeps the brain engaged. And colleges recognize this, which is why they're increasingly catering to adults because of two reasons. Number one, we have a birth dearth. There aren't as many babies being born, which means a reduction in the number of available high school graduates entering college. We have a huge array of people, 65 plus, the fastest growing cohort in America. And they have two things high school seniors don't have. People 65 plus have time and money, and they're happy to spend both on learning. So it's a wonderful way to stay engaged, keep your brain active, stay socially connected, and by the way, enter your next chapter of your life in a new career. The fastest growing age group for entrepreneurship are those 50 plus, because we have the experience, the time, and the money to do it. And so going to college as you are aging is essential. And, and it's one of the key findings in my research that the more money people earn, the more likely they are to spend it on learning and further education. Going to conferences, signing up for online courses, taking, doing a lot of reading. And I don't mean novels about murder mysteries. I mean they're reading nonfiction, they're engaging, they're developing. They're constantly reinventing themselves, reinvigorating themselves. It's all about lifelong learning. So, mom and dad, as you're talking to your kid about college, you ought to be thinking about it for yourself, too.

A (29:30)

Last question, for real this time. You are one of the country's foremost, if not the foremost, financial advisor. Look at the retirement landscape for me right now. We know that there are a Lot of people who need their money to last a lot longer than they ever thought they were going to. If you had to give people who were looking at retirement three pieces of advice, what would you tell them to do in order to make sure that they get through this phase of life happily and without as much worry as possible?

B (30:09)

Yeah, it's a huge topic and I think the most important one, it's why I created the funding our Future Coalition and it was my last book, the Truth about yout Future. About all this and what it comes down to, which you've talked about often, is longevity. You're not going to die at 85. You're going to be alive to 95. 105, 115. Will your money last as long as you do? No. If you try to do it the traditional approach, meaning you need to recognize that retirement as we knew it is dead. It's obsolete. You're not going to retire at 65 and be retired for the rest of your life because there's no way you can amass at 65 enough money to last for 40 years. Don't get scared. Don't get upset. It's not bad news. What it means is you're healthier at 65 than your parents were when they were 65. When your grandparents were 65, they were probably dead. So you have 40 years to go. You're healthier, you're wealthier, you're smarter. And this gives you a huge opportunity to enter your next chapter, which means a new career perhaps. And I don't mean another nine to five, 40 or 50 hour work week. I mean, you'll do something for 10 or 15 hours a week that makes a little bit of money, a gig of some kind, anything from driving an Uber to making pottery or doing something of a volunteer nature. All you got to do is make 10 or 15 grand a year to supplement your retirement income. Your pension or Social Security income, your investment income. It's plenty to keep you going from a financial perspective. And more importantly, it'll keep you engaged in society. Keep your brain active. That's a great defense against Alzheimer's, the number one fear we all have of growing old. And so you need to recognize that retirement, as your grandparents experienced it, is not going to be your future. And that's good news. It's exciting. It's an opportunity. Not for you to say, I'm retiring. No, that's a negative word. What you're doing is reinventing yourself as you enter simply the next chapter of your life.

A (32:03)

Rick Edelman the new book is the Truth About College. Always so much fun to talk to you. Thank you for doing this.

B (32:10)

My pleasure Gene. Always great to be with you.

A (32:12)

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