Gary Stocker, Dr. Bill Quain, and Dr. Joe Kurabi explain how colleges use frictionless systems like prepaid debit cards and one-click checkout to make spending effortless. They argue this removes the natural pause that helps students think twice about costs, and suggest adding friction back in through cash, spending limits, and questioning automatic payments.
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Welcome back to the show for another episode of Don't Let College Bankrupt You. And you can mean that, make that read you as in university or you as in Y-O-U. Don't let college bankrupt you. My guests, as always, are two college professors, Drs. Bill Quain and Joe Kurabi, who pay you back as college students. And during this series of shows, for those of you who followed us, we have talked and we'll talk about what colleges don't want you to know and provide you 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 talk about money trap— yes, we have money traps— money trap number 2, how frictionless college tricks may cost you big. Joe Carabi, Bill Cohen, always a pleasure to have you on. Joe, money trap number 2, frictionless What are we talking about?
Gary, frictionless is a term that Bill and I often use because when you really think about it, it's so easy to spend money. Just think about how convenient it is, whether it's, you know, a debit card that's loaded with money or in the book we talk about Amazon. You know, before you check out, you know, there'll always be another recommendation for a purchase. See, you know, we're a society where we like to have things made easy for us. So Bill and I, we kind of advocate for something called friction more. We want it more. We want you to be a little more difficult to spend your money. Reach into that pocket and, you know, pull out a $20 bill and you'll know where that money goes. It's tangible. And So frictionless is really a, a term to spend, spend money a whole lot easier than, than maybe you should.
And, and Bill Quayn, how do colleges— give us some examples of how colleges engage in creating frictionless systems to get access to student money.
Gary, they have elevated this to a high art form. This is I'll tell you something, they would make any marketing department at any major corporation so proud of how they make it so easy. You take it, like for example, the student loans. Of course, in the student loans, they have another complicit partner that has really done all they can to make everything frictionless. And that's the United States government with their student loan program, which is why there is $1.7 trillion in outstanding student loans. And outstanding, I don't mean like very good. I mean still being owed as opposed to all the money that's already been paid. So, so here's how they do it. Let's, let's take your, your student loan program. First of all, the announcement that you are eligible for a student loan comes in your offer package, your offer letter from the, from the university, and it looks like it's a grant, but it's actually a loan.
