Bankrupt U - The Book: Money Trap #6: All Majors Cost the Same.

Welcome back to yet another episode of Don't Let College Bankrupt You. My guests are— my guests as usual are two college professors who pay you back. During the series of shows, we'll talk about what colleges don't want you to know and provide some guidance on how to keep your costs down and prepare for a more successful post-college career. In this show, we're going to look at money trap number 7, every major costs the same. And of course, Bill Quayn, welcome as always. That's kind of goofy.

Gary, I'll tell you, it's— I hope people are paying attention today because, uh, to this, this particular show, because, uh, this is, this is one of the fundamental traps that American colleges have set. This is teaching people to think poor right off the bat. There's no reason for every college major to cost the same because they don't give you the same return on your investment.

Yep. And you use computer science and you use art major, Bill, art history major in the book. That's great examples. Kind of step us through the highlights of what that is and we'll drill down with Joe and you on the details.

That sounds great. Yeah, I went to Cornell University as my undergraduate and I was a hotel and restaurant major there. And a long time ago, great school, enjoyed it. But I had friends who were art history majors and friends who were, even back then, were computer science guys. But now the computer science majors, they're rocking and rolling. And art history, it's just, you know, hey, it's a very interesting major. You don't need to know math. You know, I guess you learn how to draw a straight line, I guess. But, you know, why would these two majors cost the same thing? Recent graduates in the computer software engineering program, they were getting summer internships at Google and Facebook and that kind of stuff. That demand is slipping a little bit right now, but it's still strong. And some that we know in their senior years, just a few years ago, their senior year, they got signing bonuses. You think it was like the NFL draft. The art history majors, all these companies were coming to Cornell to specifically recruit these people. No art historians traveled to Cornell looking to conduct a lot of interviews there. It just wasn't the same. And so for colleges to try to tell you that every major has the same value as another one, it just doesn't do it. I was up there not long ago, Gary, for my 50th reunion. And I was presenting some stuff from the book up there, you know, to my class. We had— Cornell is known as the Big Red. And so we had Red Talks instead of TED Talks. And I was giving a talk about this book and I met some people from my class. One woman, she started out as an English major. She graduated with an English major and then she went to med school because she said, there's no way I can support myself. As an English major after paying this money to go to Cornell.

And Joe Carabi, welcome. Always good to have you talk about the book Bankrupt U: What Colleges Don't Really Want You to Know. And yeah, as Bill said, it is— I like the views here. As Bill said, whether you're an art history major or a computer science major, you pay the same tuition, and yet your, your income in those majors is going to be substantially different. Is there any other industry that doesn't take into account the difference between the type of majors?

I, I just think it's a basic economic principle, Gary. I mean, demand is set by society, and, uh, you know, you can't dictate what matters. It's just— I think it's just a general just a general fact of life. Society sets the demand for occupations, and whether we like it or not, that's the way it is. I mean, that's the real world. It's the key to your value. And you, well, put it this way, it's like nicknaming yourself. In sports, we always say that you're not allowed to nickname yourself. So, you know, you really can't set the demand for your major. It's, it's set by other people and whether you like it or not, you know, that's the reality of things.

Hey, Gary, I'd like to add something there. You know, I told you I was a hotel and restaurant major at Cornell, and we had— when we graduated, by the way, we had an average of 5 job offers per person back then.

Goodness.

Yeah, it was really amazing. But so, I owned restaurants and I owned a hotel and so on. So, I look at it like a menu. You go into a restaurant, guess what? You're paying more for the steak than you're paying for the chicken. And guess who's getting paid more to teach their subjects? The computer science engineers, professors are getting paid more than the art history professors. So, here's the thing. The schools know, the schools know that this dichotomy exists and they're falling over backwards to keep you from finding out.

So Joe, supply and demand, and you mentioned this a minute ago, and essentially this show, the books that you write, the presentation that you do, they're also associated with supply and demand. We're trying to create a demand for this book, Bankrupt You, by saying, hey, students and families, um, you need to know these kind of things. And maybe they will buy this book, maybe they won't, but really it's our job to create demand. And colleges are trying to do the same thing. Is that right, Joe?

Without a doubt. Uh, you know, and it's, it's interesting, I think people are influenced so much by whether it's the media or their friends or whatever it might be. You know, the demand has to be set. People need to know about this, Gary. And it's that simple. We live in a society where we're so driven by what other people do. And I think we need to take a closer look at what we want as individuals. You can't rely on other people. Listen, this book is valuable. It's that simple, Gary. This book is valuable. There's stuff in this book. Bill and I were talking about this just the other day. You know, every once in a while we'll also review what's in that book and we say to ourselves, my gosh, there's a lot of good stuff in this book. There I was, I was speaking with a young woman the other day who was on a college trip with her daughter and she had read the book. And what was really interesting, we had about a 2-hour conversation while they were in the car on their way to visit the school. And I got a phone call 3 times over the weekend while they were at the school. And what was really interesting is basically she said everything you've said in the book is accurate. Then I said, well, of course it's accurate. That's why it's in the book. But, but, you know, the point very simply was, you know, it had to do with, with, with just transfer courses of a, I'm sorry, AP courses, transferring his credits. And it was amazing. The college was not going to take all of the kid's AP courses. And the college was talking about just acceptance. And know what the kid said? He said, we're not going any farther. I was so proud of the kid.

Oh, interesting.

He said, we're not going any farther until you tell me what AP courses are being accepted. He says, I didn't basically break my butt to take all these courses and pay for these courses and pay for the exam. And now you're telling me they're not worth anything. I mean, this kid was fantastic.

And again, don't worry about the delays, I'm making my notes here. So Bill, give you a chance to, to show your, your expertise in supply and demand. Colleges are facing the same pressures, not just for the majors but for themselves. There's not— as we've talked before, as I talk about all the time in my business at College Viability, there's too many colleges. Bill, too many college seats and not enough students willing to pay even ridiculously discounted prices to go there. It's the same thing, isn't it?

Well, it's exactly the same thing. And that's, that's why we're pulling, pulling back the curtain here, uh, for people to see what colleges are doing. Yeah, let's, let's think about this for a second. A college has seats in classrooms. A college has dorm rooms, a college has seats in the cafeteria. You know, they don't care who's sitting in those seats. You know, they're gonna put out, they're gonna create majors. You know, what's that favorite book title you have, Gary? It's the first, your first favorite, even over ours. Yeah.

Yeah, it was Brian Rosenberg, the president of Macalester College for many years, wrote a book Whatever it is, I don't like it. And it was abortion reference.

Whatever it is, I'm against it. Whatever it is, I'm against it. Yeah. And, and, you know, so, so, you know, colleges don't want to make changes because, uh, you know, they're operating, uh, and you, and you say to them, well, you know, you should, you should be more open with, with telling people and showing people that, that, you know, they're, that they're condemning themselves to a life of of less income because they're majors. And they'll say to you things like, "Well, what's really important is that you major in something that you like." And then they have all these different majors. Listen, if I had majored in something I liked, I'd be fishing right now and be very poor because that's what I like is fishing. So, "Follow your passions," we'll hear people say. Scott Galloway, MBA professor at NYU and an incredible author and speaker and that kind of stuff. Yeah, he says that, listen, you know, don't major in something that everyone else wants to major in. He was talking about like some of the sexy majors, you know, environmental science and that kind of stuff. Well, you know, everybody wants to do that 'cause it's the in thing to do. And colleges are telling students, "Oh, you're going to graduate from here. You're going to be a world leader and you'll be the next generation," stuff like that. Yeah, you got to feed yourself. You got to have enough money. And so, what Joe and I constantly talk about in our book is you've got to become more valuable and getting a return on your investment. There's two things you can do. You can either earn more money when you get out, or you can pay less for your major to begin with. In other words, if you want to— that's why we think it makes sense that, you know, if you're going to be an art history major— and listen, we're not picking on art history, and I'm not glorifying computer science, engineering, but we had to pick two majors to talk about here. So find some ways to increase value. And we give you those ways in the book because we give you some plays on how to do that no matter what your major is.

And so, Bill, I'm gonna stick with a follow-up. Culturally, for the most part, we're letting 18-year-olds, 17-year-olds decide their future. How can— it's a tough question. How could we make that better, realizing that their parents, of course, have a massive role in that, But letting 18-year-olds do what they want to do and invest tens of thousands, if not hundreds of thousands of dollars, Bill Quaynes, is there a better way to do it?

Well, I think there's a better way to do it. And I'll tell you what can be done. And I think it's going to start happening. Gary, I don't know if you heard about how— what's the group that does the college classifications?

Carnegie.

Carnegie.

Carnegie.

Yeah.

Carnegie just changed the way they're going to do the classifications and it's a done deal. And this is really going to impact this major choice thing because they're going to be grading colleges and it's going to show up in the rankings on access and earnings. So, in other words, who can access this college? Is it open and does it provide opportunities for for people of all types? And then what are the earnings they're going to make after that? Now, Joe and I don't think earnings should be the measure, but because there's much more to life than just the earnings. I mean, there's all the, you know, there's building wealth and, you know, you can make a million dollars. If you spend a million and one dollars a year, you're broke, you know? So, but it's a good start, you know? And of course, you know, Joe and I talk about that, thing called The Art of the Start. So it's a good start. I think that that's going to make a difference because all of a sudden there's going to be a lot more emphasis on a college's ranking by what its students are actually earning. And so that's going to— when we look at this by major, that's going to make a big, big difference in your ranking. And so that could be a good start to it.

Gary, can I interject real quick, please? Yeah, you know what, you had mentioned earlier about 18-year-old kids making these decisions. You know, as you've kidded me very often, I've been around for a long time. And as a former high school principal, you know, I can say without exaggeration, I have worked with thousands and thousands and thousands of students. And believe it or not, they get to that 18-year-old stage. And I think a lot of it has to do with value. And I'm not quite sure that 18-year-old kids understand, quote, value. And it's a growing process. And it's, you know, I remember I'm a big Star Trek fan. And there was a Star Trek episode where you actually were born at a very, like, at 80 years old and you kind of worked yourself backwards to where, you know, then you had all those great skills at 80, but by the time you got to, uh, 2 days old, you had lost all those skills. So I mean, where our society, you know, we don't really mature and understand all that stuff until we're much older. So, you know, I was always fortunate. I had, I had guidance counselors that were absolutely phenomenal. And had parents for the most part that were very, very involved. Look, kids don't understand value. Value is not set by the individual. Value is set by other people, whether we like that or not. That's a lesson that everybody has to learn.

You know, Joe, I'm going to come back with another follow-up question on your 18-year-old story from a minute ago. But before I do that, you know, I'm going to do a plug for College Viability because I have an app. And it's called the College Majors Completion App. And it's not just the value that both Joe and Bill have talked about today, but it's why go to a college— well, I always use journalism as my example— why go to a college who has 2 journalism majors graduate per year versus one who has 200 journalism majors graduate per year? It's just a function of a college is going to offer a better program if they have more students. And the example I use is brain surgery, right? We probably wouldn't want to go to a brain surgeon who does one a month. We'd probably rather go to a brain surgeon who does one a day. And the same thing for colleges that don't offer a lot of majors. You got to be careful about choosing a college. This is what the app shows for every public and private 2- and 4-year college in the country. If they have a low number of majors, be very careful about choosing that college. So that's just my plug. It's not even shameless. It's with intent because there's value in that. Joe, you have a comment?

Well, yeah, without a doubt. You're talking about establishing value. And, and, you know, you know, once again, I'll go back to— I'll go back to establishing value. You know, an ounce of gold, all right, is worth, um, this day and age anywhere between $2,000 and $2,500, uh, as of today's date. An ounce of gold is worth something because people want it, right? All righty. And a pebble, a pebble that weighs 1 ounce has no value. All right. I mean, and that's the point you have to remember. Great point. It's crazy. I mean, go back to your analogy about the brain surgeon. All righty. I'm also willing to bet that that brain surgeon charges a little bit more.

Yeah.

Yeah. Yeah. So Joe, I'm going to go back to the 18-year-old. And you didn't say it in these words, but really in my mind, and I think you'll both agree with this, Joe, is that students are the ones really with the decision-making power these days. We're just trying to give that— you and Bill are trying to give them that power and show them how to use it in the relationship with colleges. Is that fair?

Well, yeah, I think your statement is very fair. Your statement's right on target. Now, whether it should be that way or not is a completely different discussion. You know, I, I, you know, I understand, I understand where you want to give, uh, an 18-year-old, you know, those decision-making, uh, powers, but they also have to need the capability to make a prudent decision. So, you know, as parents, it's a delicate balancing act. You know, you want to give your kid a little freedom, but you've got to be there, okay? And you've got to be looking over their shoulder, and you've got to be, uh, giving them advice and But the unfortunate thing is sometimes the more advice you give them, the less they'll listen to you. So my recommendation has always been when you visit a college with your son or daughter, no matter how much you like it, don't say anything. All right. And if you like it, don't say you like it. And if you hate it, say you love it. All right. Because they're going to do the opposite. But the point is, you've got— it's a balancing act. I mean, parenting is a difficult profession. And our society, listen, most 18-year-olds are not ready to make this kind of decision independently. They need guidance and help.

So the book Bankrupt U: Students, Parents, and Alumni Going Broke and Colleges Don't Give a CRAP, and CRAP is an acronym, we'll talk about that some other time. Bill Quain, page 77 in the book, Subheading says, what would happen if colleges lowered their prices for art history majors? Tell us, talk briefly about what that means in the book.

Well, see, that would be so great if they did that. I mean, because it would just tell people, look, you know, you're not going to make as much money from this major as you will from something else. But there's some good things for it too, because suppose you said to yourself, you know, I hear everything everyone's saying, but I just still love art history, you know, and I want to major in that. Well, if you could do that less expensively, and I use the example in the book there, we use the example in the book of Cornell University, maybe you would say to yourself, well, you know, what I really want is a degree from a good university, and I'll figure things out after that. So, I'll just take the least expensive degree they have. I'll still get a degree from that university. And hey, that would now see that to us would be fair. And that would be teaching students a lesson in value, which colleges, of course, are dead set against teaching you a lesson in value because they don't want you to see what's going on. So, that would be a great thing.

So how to avoid this money trap? You've got 4 suggestions for folks, and Joe, let me take this one to you. The second one you talk about in how to avoid this money trap is if you decide to pursue a major that has lower value, beware of it. Be— or do that with, with eyes wide open. Talk about that.

Yeah, it's very, very similar to what Bill just explained there too, Gary. Look, You know, we're not saying that money is everything, okay? But you still have to pay the bills, and we understand that if you're excited about a certain topic, right? So if you want to pursue this topic, do so prudently. Recognize what people in that particular profession, what kind of lifestyle they have, what kind of earnings they have. At least you've got to be aware of that. And listen, while you're there, you can graduate with with many majors, but you can also develop the skills within those majors that employers are looking for. You know, skills like professionalism, critical thinking skills, learning how to not only manage— you know, we hear this thing about time management skills. Well, it's more than that. It's just how to manage your life. You can learn so many other critical components of what it is to be a college graduate. So look, if you want to pursue a major that is not going to yield the same, let's say, financial reward, at least go in there and recognize I got to pay for this with the least amount of money I can.

Yeah. And Bill Quayn, to wrap this up, there's a cute line in the book about a comedian. Who teased about he spent $30,000 a year as an English major to learn a language he already knew. Now, of course, I giggled with that the first time I read it, but it's kind of true. We've used art history as our example today. It's really kind of true that the selection of your major at 18, or even you're an adult learner at 25, is important. Give the top piece of guidance to an 18-year-old, 19-year-old sitting in front of you that's getting ready to go to college and deciding on a major, what's the one piece of advice you would give them? And Joe, I'll follow up with the same question for you.

All right. For me, that's easy. And by the way, you talk about John Mulaney, folks, go and listen to that. I mean, he uses some pretty strong language, but it's hysterical. But the thing I would tell anybody, because Listen, you know, we're not going to be able to talk kids out of making crazy decisions. So I, what I would tell them is develop a skill in whatever major you're in that you can compete at least with the other people in your major. You know, in other words, uh, uh, if you're gonna, if you're gonna become an art, you know, an art historian, you know, develop some technical skills that, that would be in demand, that would set you apart. Make sure that you, as Joe and I like to say, go pro and stay pro. You know, become a branded person within whatever major you do so that at least you can compete with that set and be the top earner in that area.

And Joe, I'm guessing you have done this hundreds, if not thousands of times with your students. What's the one piece of advice you give them about choosing that major?

Yeah, but what's funny, Bill used the word brand. I say brand yourself. Uh, and, but, but I don't, I don't necessarily always use that word. I always tell people to be you, whoever you are, be you, but make sure you know who you are. All right. Establish, establish what makes you different than somebody else.

So let's go ahead and do a wrap on this show. And, and of course the money trap. Number 7 has been every major costs the same, but of course throughout our time together today we've talked about the compensation. The lifelong compensation for every major is not the same. And gentlemen, while it may or may not be easy for families to have that discussion with 18-year-olds, I think we all agree that it's an important conversation to have and to realize that computer science, that pre-med, that nursing, it gives more value in terms of financial return then again, we'll pick on art history, English, philosophy, sociology, those kind of things. Folks are welcome to choose that, but they have to go in with eyes wide open knowing the consequences. Joe Corabi, Joe Corabi, Bill Quayle, thanks again for doing the show. We'll look forward to doing next week's show, which will be— again, don't worry about the timing here. Are we going to do number 8? Don't turn a minor into a major mistake.

That's fine. Okay.

Yeah, whatever. That's fine.

Well, good.

We got to go through them all, so that's good.

So join us next week when our topic will be don't let your minor be a major mistake. Until then, I'm Gary Stocker for Joe Crabbie, Bill Quayle. Thanks for watching.