Podcast Summary: Slate Money – “The Price You Pay for College”

Date: January 23, 2021
Host(s): Felix Salmon (Axios), Anna Szymanski (Breaking Views), Emily Peck (HuffPost)
Guest: Ron Lieber (The New York Times), author of "The Price You Pay for College"

Episode Overview

This week’s episode tackles the complex, opaque world of college pricing in the United States, drawing upon Ron Lieber’s new book. The conversation explores why college costs what it does, how pricing systems came to be so convoluted, the impact of the pandemic on higher education, challenges for families navigating financial aid and value, and broader policy debates like student loan forgiveness. The hosts also briefly discuss COVID-19 vaccine logistics and end with a "numbers round" sharing topical financial stats.

Key Discussion Points and Insights

1. Why College Pricing is Complicated

• Lieber’s Book Goals: Explores who pays what and why for college, the rise in complexity and opacity, and when (if ever) it makes sense to pay vastly more than state university prices ([00:49]).
• Reasons to Attend College: Education, kinship (social connections), and credentialing. Pandemic diminished 2/3 of these, revealing how vital in-person experience and campus life are to families ([02:03]).
  • “We’ve come to see this residential undergraduate educational experience as a sort of rite of passage in the United States.” – Ron Lieber ([02:56])
• Pandemic Impact: No permanent changes foreseen in college demand, but the value of physical campus life was underscored.

2. Financial Consequences for Schools

• Public Colleges: Effects of recession typically lag by ~24 months; eventual budget cuts and tuition hikes likely but uncertain in scale ([04:57]).
• Private Colleges: Reliance on international, full-paying students was a significant risk, partially offset by political changes (e.g., end of "Muslim ban") ([06:19]).
• Endowments and Aid: In recessions, decreased endowments limit schools’ flexibility to offer financial aid.

3. Opaque College Pricing and the “Food Chain”

• Marketplace Dynamics: Colleges, like airlines, set different "clearing prices" for each family/student—highly opaque, varied, and reliant on “discounts” (merit, need-based, or just to attract certain students) ([09:13]).
• Discounting Arms Race: Lieber cites the "Oberlin problem"—when unwillingness to pay full price spreads through a demographic, forcing colleges to offer merit-based discounts even to affluent families ([11:07]).
  • “Are they ashamed...to be participating in what is essentially red-blooded capitalism and discounting even though they're a nonprofit institution? I don't know.” – Ron Lieber ([12:28])
• Perceived Value: Top schools expect to reach $100,000/year in costs within a decade, based on the expectation that a growing elite can and will pay ([13:10]).

4. Is the System a Scam?

• Navigating Complexity: Parents face overwhelming research to decode actual costs and possible discounts, unlike almost any other major purchase.
  • “What else do you buy where you don't know the prices until you've already limited your choices?” ([14:14] Emily quoting Lieber)
• No Solutions, Only Guidance: Lieber offers advice for “winning” at the current game, not systemic fixes ([15:26]).

5. Parental Choices and Student Financing

• Whose Investment? Parents often struggle emotionally over saving money by sending a child to a cheaper school ([16:58–17:55]). Some children go into debt, but caps on federal borrowing ($31-32k across four years) still limit choices for 18-year-olds ([19:47]).
• Tactics: Students can patch together savings, work, gap years, and in rare cases, income-sharing agreements. Leveraging personal excellence for merit aid at private colleges is possible ([19:47–22:10]).

6. Student Debt Policy and Free College

• Loan Forgiveness: Partial forgiveness (e.g., $10–15k/student) would help individuals but wouldn’t fundamentally change the system; there’s concern about moral hazard and political backlash ([22:51]).
  • “The danger...is that it may persuade some people...that debt cancellation will become a semi permanent feature of how we do things in America.” – Ron Lieber ([22:51])
• Existing Forgiveness: Much student debt is already on track for forgiveness through income-driven repayment plans ([23:39]).
• Free Public College: Major impact possible, but elite and exclusive schools would remain “fancy” credentials regardless ([25:27–25:58]).

7. Does Pedigree Matter?

• Job Market Realities: Elite degrees (especially Ivy League, Stanford) confer clear advantages in some sectors, especially for first jobs, though skepticism about Ivy credentials may be growing ([26:58; 29:06]).
  • “There is way more skepticism about 22 year olds coming out of the Ivy League than there has been...in my 25 years in New York.” – Ron Lieber ([29:06])
• Snobbery vs. Data: The credential advantage is real for certain “elite” outcomes, but diminishing in some settings.

8. COVID-19 Vaccine Distribution (31:00-37:54)

• Logistics Focus: Lieber applies his “systems hacking” mindset to help people navigate vaccine signups—privilege (technology, time, know-how) is a huge factor ([35:01]).
• Community Solutions: Informal Facebook groups and crowdsourcing tips help level the playing field in chaotic systems ([35:53]).
  • “Thank God for the South Florida COVID-19 vaccine group… just been an incredible wealth of information.” – Ron Lieber ([36:31])
• Luck and Geography: Ease of access varies dramatically by location ([37:16]).

Notable Quotes & Memorable Moments

• On the pandemic not destroying college demand:
  “I don't see any freight train of technology coming down the tracks that's going to blow all that to smithereens.” – Lieber ([02:56])
• On the madness of tuition opacity:
  “What else do you buy where you don't know the prices until you've already limited your choices?” – Book quote, repeated by Emily ([14:14])
• On the emotions of parental college payments:
  “Are you going to upgrade your kitchen? Or are you going to actually invest in that child who you are hoping to launch into the world with a whole bunch of rocket boosters?” – Lieber ([17:55])
• On privilege and vaccine access:
  “Privilege, privilege, privilege. But the other thing that's important to note… are civic-minded communitarian people all over the country... sharing information and swapping tips...” – Lieber ([35:01])

Timestamps for Important Segments

• [00:49] – Ron Lieber introduces the book's scope
• [02:03] – Three reasons people go to college, COVID’s effect on them
• [04:57] – How economic downturns impact public and private college finances
• [09:13] – Explaining the “food chain” and the complexity of college pricing
• [11:07] – The implications of merit aid, the Oberlin example, and fears of “the market eroding”
• [14:14] – The moral and practical frustration with college cost opacity
• [16:56] – Whose investment is a college degree?
• [19:47] – Real limits on what students can self-finance
• [22:51] – Student debt forgiveness policy discussion
• [25:27] – Free public college and persistent elitism
• [29:06] – The real (and changing) impact of elite university “pedigree”
• [31:00] – Transition to vaccine distribution discussion
• [35:01] – How logistics, privilege, and crowd-sourcing work in vaccine access

Numbers Round Highlights

• $58 billion: Jump in Alibaba’s market cap from a Jack Ma appearance ([37:54])
• 10: Hours a day that indigenous hunter-gatherers spend sitting, countering "sitting is the new smoking" narrative ([38:29])
• 144: Years of the London Metals Exchange open-outcry pit before closing for good ([39:48])
• 52%: Average discount at private U.S. colleges; 89% of undergraduates receive some deal ([40:48])
  • “It is possible to pay much less than the RAC rate for college and most people actually do.” – Lieber ([41:47])

Conclusion

"The Price You Pay for College" episode illustrates that the U.S. college pricing system is intentionally confusing, built atop market forces, brand snobbery, and entrenched privilege. For families, the navigation is overwhelming if not defeating, and for policymakers, solutions like debt cancellation or free public college are powerful but imperfect. The episode's discussion, led by Ron Lieber, is honest, vivid, and at times darkly comic—illuminating a status quo that, despite the pandemic, seems destined to persist unless and until systemic change arrives.