Bankrupt U - The Book: Test Optional is a trap. Be wary.

Welcome back to another podcast episode of Don't Let College Bankrupt. My guests, as usual, are two college professors who pay you back. During this series of podcasts, we will 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. Bill Quayn, always a pleasure to have you on the show. Thanks for making time. Joe Crabbe, also nice to have you on the show. Bill, what are we talking about today?

Oh, this is, this is a money trap, uh, right from our book Bankrupt You, and, uh, where we have 10 money traps. This is, this one is stunning for people and they just don't know about it. It's called, uh, Test Optional: A Trap Worth Avoiding. No one understands this. Everyone thinks it's a great idea, uh, but it's especially the colleges think it's a great idea because they're making money on this hands over fists. So we've got some experts here. Joe, of course, uh, really deep into this, and it's going to stun people.

So the history, Joe, the history behind test optional, just briefly share that.

Yeah, Gary, uh, test optional really had its origins, I'm going to say, prior to COVID, but it really took off once COVID hit because colleges were having a difficult time putting kids in seats and they were looking for ways to maximize their enrollment. So they began to really de-emphasize standardized tests as admissions and move more towards high school performance, their GPA, and so on. The unfortunate thing about it is, you know, it's disguised— well, this is my gospel— it's disguised as an opportunity for kids to attend colleges. But Bill and I strongly believe it's more along the lines of a trap. You know, the interesting thing about test optional is, you You know, most of the evidence out there still suggests that SATs are the number one predictor of college success, right? And, uh, while it might help a kid get into college by not, uh, you know, providing their SAT scores, there's no guarantee it's going to help them get out. So, uh, it's unfortunate because I think there's a lot of kids going to colleges and they, uh, are not equipped to handle, uh, the, uh let's say, the requirements of that university.

So, the book we're using as the source is a book that both of these gentlemen wrote together. It's called Bankrupt U: Students, Parents, and Alumni Are Going Broke and Colleges Don't Give a CRAP. And CRAP is an acronym, and we'll talk about that another time. And my guests are Joe Crabbe and Bill Quin, who are the professors who pay you back. So, the book I'm using as my reference, Joe, I'm going to go back to you, page 71. There's a quote. And the quote says, "Test optional really is only for those excited to pay full price." What does that mean?

Yeah, here's the thing, you know, when colleges decided to use test optional as a way to entertain the possibility that some kids can get into their school who maybe would not ordinarily qualify, You know, they forgot to ask the professors, and professors still have their requirements in their courses. So while, you know, the university might allow a kid to get in, you know, professors still have academic requirements. And the reality is that many of those kids who are coming in are not equipped to handle those requirements, whether it's writing skills, reasoning skills or whatever it might mean.

So, Bill Quayn, one of the co-authors of Bankrupt U, test optional is one of the headlines on page 71 unless you want a scholarship. Talk to that. Talk to the viewers about what that means.

Well, Gary, you have to understand that nothing colleges do regarding admissions or, you know, recruitment or whatever, nothing is unintentional. This, this, it's, they are, they sit up all night long thinking of ways to get more money from their students. And they're going to get, they're going to have to discount their tuition to some students, whether it's for financial need or whether it's for merit or whatever. And so they, they, they, they create a, they create a tuition level And then every time they give somebody a little discount off of that, the person gets excited and thinks, oh, they must really want me. Well, they really want you by doing away with test scores. And what they want you to do is they want you to pay full price so that they can have your money to give to somebody else who they really, really want. And so this idea that somehow the colleges are you know, trying to even the playing field for people. Nah, it's not true. They're, uh, they know exactly what they're doing is to maximize the amount of money that they can get on average from each student. And if you're below average in your, uh, in your, in your abilities to actually be admitted to that school, you're going to be above average in what you pay.

So, you know, all businesses in essence try and get as much money as they can, and there's nothing wrong with that. There's nothing wrong with that at all.

But I guess the analogy I would draw is getting a car, right?

We've We've all negotiated for a car over our many, many years of existence, and we negotiate discounts. And Bill, you were talking about college, you know, if I pay full price and you don't, or my student and your student, whatever it is, doesn't— really, it's— colleges don't— it may be an indirect subsidy, but really most scholarships, a preponderance of scholarships these days, Bill, are discounts, not really moving actual dollars from one fund to another. Do I have that right?

Yeah, there's almost no money being delivered to colleges as a scholarship to a student. It's all discounts. And so, when you're going to offer discounts, you set the price high so that when you offer a discount, you get the money you really wanted anyway.

And Joe, you're the sports guy on the show, and let's talk about athletics for a second in this context. you know, we talk about subsidies in Bill's example a moment ago. Really, in most D1 colleges, only D2 and D3 alone now, the non-athlete students are subsidizing the athletes. Is that fair? Wow.

I think at some places that's accurate. There are, quote, some D1 schools that really don't make any money at the gate. So in order to have those kids perform.

Yeah. Yeah.

That's an accurate statement, Gary. The interesting thing is I think it's much more complicated than that. You know, I think you have to, you have to look at what some D1 schools are getting from their athletes. You know, even, even a mid-range to low-range D1 school is still getting what I'll call free advertising. You know, whether they're on television or papers or whatever it might be. So, you know, while it's really interesting because they're paying for that, but then again, if a kid is on a full scholarship, full, full athletic scholarship, you know, that money to have that kid come to that school has to be coming from somewhere. So, yeah, it's got to be coming from a kid who's not competing in athletics. And just as Bill said, that's all factored in. You know, I don't think anything happens by accident. Bill made a great point there, very simply saying colleges know what they want. This is all— there's a calculus involved here. And the other thing to consider is you mentioned D2 and D3 schools, and, and so many of the people that I work with, their kids are D— well, primarily D3 athletes.

Yeah.

And look, the thing you better be realizing right off the bat is, you know, NCAA doesn't allow you to get any athletic money. Right. But the interesting thing is college coaches will look for opportunities to bring in a D-III athlete through the academic discounted tuition route. Now, that's probably a discussion for another day. But, you know, we clearly outlined that in the book, and that's a big deal. Yeah.

Yeah.

And so, Joe, essentially, I'm going to use it across all NCAA divisions just for sake of example. You get the same scholarship— and there's air quotes there, really just a tuition discount— whether you're a basketball player, a flute player, a clarinet player, a good dancer, or an economic student. Same kind of discount logic, right?

Yeah, except that— are we talking about a D3 school here primarily?

Just in, just in general. Just in general.

Just in general. Yeah. No, no, no. Look, there's a pool of money, okay? And the pool of money's got to cut— there's only one pool of money. All right, and yes, that money is coming out of the same pool, whether, whether, you know, if a college wants to entice you to come, they've got to incentivize you to come there. All righty, and a kid is going to go where the most incentivization is. I mean, that's just a, that's just a common human behavior.

Okay, okay.

So, so, Bill, page 71, also in the book, The subheading reads, SAT and ACT tests are based on math, reading, and language arts, but not really. So SAT and ACT scores really do measure math and reading and language arts, but sometimes the high school curriculum doesn't prepare students properly for those tests. Joe, can you expand on that?

Gary, I, I, this is one of my favorite topics, and, uh, to be really honest with you, I, I could talk all day about this.

Please don't.

And it goes— I won't though. All right, I promise. Look, here's the deal, all right? Uh, and I see it all the time when I work with families. I walk into a, a family, sit at the kitchen table, and I look at a kid's SAT scores, and the parent invariably will say things like, oh, my kid doesn't teach— doesn't test well, and so on. The reality very simply is, uh, Your kid doesn't test well very often because your kid doesn't know the stuff. All right. He says, well, my kid got, uh, you know, got 92 in Algebra 1 and 94 in Geometry. So the next question I asked very simply is, okay, well, I turned to the kid and I say, how was that grade determined?

Yeah.

And the kid invariably will say, well, I got points for doing my homework, for participating in class and so on. The thing you have to remember is the only The only assessment that counts is an assessment that is aligned to the curriculum, to the content. So every time that a kid gets extra credit, all it does is give a false reading on whether the kid understands the stuff or not. So when a kid gets an A in Algebra 1, you would expect a kid to do extremely well on the SATs. But very often that doesn't happen because the parents and the kid have been given a false indicator of how much stuff they know.

So I guess that begs the question, how do parents, Joe, know how a grade was determined? Are they getting kind of false hopes that their child has the capacity to do either the SAT and ACT because their high school grades were— I don't say artificially, but enhanced with non-academic, um, skills?

Well, the answer to that is that you have to know what questions to ask when you go in for a parent conference. You know, very often, you know, a teacher will present the data. Uh, you know, a teacher— in all fairness to teachers, they've got 10 minutes to usually to talk to a parent when they come in, or parents when they come in.

Yeah.

So, you know, you give the academic data and the parents say, okay, well, my kid is doing well. But you've got to ask the questions: how was that grade determined, and what part of that grade is based on, you know, a valid indicator of, of their achievement level? So the parents got to ask that question. And, um, let me just tell you something, that it is a— it's a major source of discussion in many, many high schools nowadays about how these grades are determined. Many, many schools are putting a cap on, uh, interesting, yeah, on, on, on, on the amount of, uh, points that could be given towards homework and so on. So, uh, I would encourage parents to be on top of that.

So, so, Bill, there's even a bias that you talk about in the book Bankrupt U, and the bias is colleges are kind of using this SAT and ACT testing system to artificially raise the expectations for talented, academically sharp, intellectually sharp students by discouraging those less talented and thus raising the overall ACT scores. What's going on with that?

Well, Gary, you know, over the course of these podcasts, I always picture in the cartoon where there's a devil or an angel sitting on somebody's shoulder. And I'm the devil when it comes to colleges. I'm a— I want to be shouting at people. It's intentional. They're doing this for a reason. Colleges have a remarkable ability to influence their rankings in these, you know, the U.S. News and World Report and all that kind of stuff. And that really enhances the number of people that apply there and so on. And then, of course, the more people that apply, the more people they get to turn down. That also enhances things. But one of the things that's used in the U.S. News and World Report and other rankings is the average SAT or ACT score of the incoming freshman class. Now, here's the thing. So if you say to people, look, if your scores aren't good, you know, don't report them to us. And so the parents and the students think that's a great idea. This is wonderful. Or an equalizer, so they don't report them. But now if you're sitting there with a 1400 in your, in your SATs, you're going to report that. You're going to want the school to know that you're capable of achieving that kind of score. So now think about it. Instead of having this, the freshman class of, let's say, 1,000 students, whatever, 2,000, whatever happens to be with, with this average test scores running all over the place, now you've only got the people reporting who, uh, who scored, you know, 1300 and above or whatever, right?

Yeah.

And that's all of a sudden, that's the average test score. Bam, it goes up in the rankings. Bam, the tuition goes up, you know. And, uh, it's all intentional, every bit of it.

So, gentlemen, uh, the last section of our show today is how you can avoid this money trap, which is the test optional. And Bill, I'll start with you. Take us through a couple of the ways parents and students can avoid this test-optional money trap?

Well, you know, Gary, our book is a playbook. We've inserted plays or we pulled them out of all through this book. And now, of course, I'm blind, so I can't— I think probably some of our listeners know that by now. But so could you or Joe read me like one or two of these?

I've got them in front of me.

Yeah, I've got them in front of me. Okay, great. Yeah.

Let me do the first one. How you can avoid this money trap, page 73 from the book Bankrupt U. The first thing you should do is make sure your academic credentials are consistent with the academic expectations of the college. We're not suggesting that you shouldn't challenge yourself, but be reasonable.

Yeah, be reasonable. You know, listen, your, your kid isn't going to— if your kid is test optional, uh, and, and they're— because they don't want to declare their lower scores, It might be that they're not going to be successful at some of the top-ranked colleges. It doesn't mean that they're failures. They can still do great in life. But be reasonable when you apply to colleges because you want colleges that are going to see your kid as valuable enough to give you a discount on that. Hey, if you want to have a shoot for it in school, no problem. But be reasonable in what your student is going to be capable of. Because for one thing, you don't want them to be unhappy and stressed out the entire time they're there. You want them to be in a place that is designed for them and their talents.

And let me give you the next one also, Bill. This is tip number 17 in the book. If the college feels like an academic stretch, you'll probably know it because they won't offer you any academic scholarships, meaning you pay full price or something close to that.

If you're, if you're getting a, uh, listen, Joe and I follow a lot of Facebook chat rooms out there and stuff, and the people are, you know, it's amazing that the people say, 'We thought we were going to get a lot more You know, they accepted our student, you know, we thought they— oh, they'll give us a lot more. And, and where is the, the merit money and that kind of stuff? You applied to the wrong school, you know. And so you have to understand that going into this, if you're going into this with a test-optional, uh, application, that you're probably not going to get, um, a lot of merit money for it. And, uh, you know, so, so have some safety schools that you can go to. I think this is actually another play that you apply to, make sure your safety schools are going to be cheaper.

Yeah. And, and Joe, the next one reads, often when you're a student, when you're not quite ready for the academic expectation of a college, you'll be placed into a summer qualifying course. This, he, you write in the book Bankrupt U, this is a sure sign that the college sees your student, or you, who was not prepared for the academic rigor of their school, alleged academic rigor of their school.

Yeah, that's a very common practice. It's like a contingency acceptance. We'll accept you if. So very often in July and August, they'll have introductory language arts or math. They're almost tutoring programs that bring you, attempt to bring you up to speed so that you can walk into a you know, a first-year English class. Look, that's a sure sign, man. That's a sign that they, hey, we've looked at your credentials and we're going to let you in. We're going to let you pay full freight. We're going to give you a chance. But we got to tell you right off the bat, you know, we're going to send you to summer school because your performance is just not what we really expect. It goes back to the whole thing. What's really interesting there, if you look closely at that, Gary, It's— you can almost tell whether a college has met its recruitment goals by the number of kids it has in the summer qualifying programs.

Interesting.

All righty. And that's almost a sure— if those classes are full, you know, then I think, I think people then need to, to move to, uh, to your podcast and start thinking about viability. Because if a college is letting kids in who are not qualified, well, where is that going to lead?

Yeah.

Yeah.

Bill, I think you had a follow-up on that.

Yeah, I do. I just— it's so interesting because I just finished advising at where I work and I have one of my advisees. I'm looking at this, this, this young person's resume. We have to cut this a little. I'm looking at this young person's transcript, and I'm seeing courses on there that I don't usually see. And this person actually had not passed one, he had to withdraw from it. And these were courses that the student was paying for. And this is like a hidden, hidden money trap. This is, the student is paying for these courses, but they don't count towards your degree. That, you know, so this is during a regular semester. And a lot of colleges do this. They have these courses that to catch people up, you know, and you have to take them before you even start taking the basic math course or the basic English course. And now you're going to be there longer. You're struggling and you're paying for stuff that you shouldn't be in that college. In my experience, if you have to take those courses, it's going to cost you more, but the colleges do it to fill seats.

And so, Joe, the last play on this book, on this chapter, from bankrupt you and test optional considerations. You write, go ahead and apply to your dream school, and be sure— but be sure to apply for— to a reasonable safety school where your scores and credentials will get you a better offer. And your, your play here is, if your dream school accepts you, use that acceptance letter as a negotiating tool to get a better offer from your safety school. What does that mean for parents and students?

I call that the tier-down effect. T-E-A-R-S and T-I-E-R. Tier-down effect. All right. And the tier-down effect very simply means that if you— the schools are in a specific strata. So if you are accepted to a school that's in a higher strata, the lower strata school obviously is going to want you. So then you play off the offer, if there is one at all, from the higher-tiered school and negotiate a better price at the lower-tiered school. Now, it's, it's just as you said, it's like going to a different dealership. All right, now the one thing to be careful here is that the, the higher-tiered school is not going to give you any more money because you're certainly not going to play off the lower-tiered school. They know that But it's an interesting way in which to, to look at a better price for school. So I encourage people to intentionally apply to a school that may be a little bit out of their comfort zone so that you have that opportunity to play it off against the lower, the lower-tiered school.

So, Bill, I'm going to follow up to you on this one, then we'll wrap things up, is I'm afraid to negotiate. You mean colleges will actually negotiate tuition with me?

Well, it depends on what you get. What it depends on, what they need and what you've got. So as Joe said, you know, apply to a reach school. They're not going to give you any money, you know, and then use that acceptance to go to a school that, you know, is more suited for you anyway because they want you and say, hey, listen, This is what I'm being offered. I don't know what to do. Can you help me? You know, and, or as I like to say, can you, can I, can I help you help me? So that's what I would like to add. One other thing too, Gary, it's one of our plays there. If you're finding yourself where the school is saying, listen, you've got to take these, these probationary courses or whatever, which you're going to pay for and are going to cost you money, go to community college. Go to 2 years of community college, get your GPA up in there. And then, you know, guess when schools really want you? When they've had a couple of years, a couple of the freshman and sophomore year people dropping out and stopping. Now they got some open spots they got to fill for juniors. You can get some money there.

Well, and even on top of that, it's not just open slots. They're desperate for students anyway. And if you had that, that 30, 60 hours of credit from community colleges, that probably makes you attractive to more colleges, even though almost all colleges in the non-top 50, top 100 will be interested in accepting you as their students. So bankrupt you. Students, parents, and alumni are going broke and colleges don't give a CRAP, and CRAP is an acronym. This is from Bill Quain and Joe Carabi, The Professors Who Pay You Back. Gentlemen, we're doing a lot of shows on this book. It's a fascinating topic, and for those parents, students, and others watching the show, there's some tips you're probably, almost certainly, not going to see from anybody else. So, make sure you watch this episode, and there are, I think we've got 8 or 10 lined up in the coming weeks and months. Take a look at those shows just for guidance. College is about learning. You probably need to learn about learning about colleges before you actually start the process. So, Joe Crowley, Bill Quain, always a pleasure to chat. We'll look forward to getting together next time on Bankrupt You.