Repeal of FAFSA Graduation Requirement in Louisiana and What Filling It Out Does for You And Your Child (DF#142)

Ryan Maruyama [00:00:00]:
The whole system is just geared to market towards you and your child to go to college. Go to college. Go to college. Go to college. Doesn't matter. Blanket statements for everybody. They're just saying college equals good regardless of how much it costs. Hello, folks, and welcome back to degree free.

Ryan Maruyama [00:00:22]:
We've got a bunch of things happening at once. We have states dropping degree requirements for their state jobs. Their current count is up to 16 states that have dropped degree requirements for their state jobs. But then at the same time, we have states doing the mandatory filing of the FAFSA to graduate, except for Louisiana going the opposite way. In 2018, they were the 1st state to mandate their students fill out the FAFSA to graduate. They could also sign a waiver to not fill it out. Within the past few weeks, Louisiana has now repealed that requirement, and it is no longer necessary for their high school students to complete the FAFSA to graduate. So first, I'm gonna talk about the legislation, a little bit about it, and what's going on.

Ryan Maruyama [00:01:10]:
Then I'm gonna talk about the marketing behind it and why it's so effective at making your child go to college. Before I get into it, if you have any questions you want answered on the podcast, go to ask.degreefree.c04/question to ask your question there. Show notes to everything that

Ryan Maruyama [00:01:27]:
we talked about can be found at degreefree.co/podcast.

Ryan Maruyama [00:01:31]:
There are a bunch of reasons why it was repealed or so it was stated. Privacy concerns being one of them, because you have to give your information or rather if you are the child, your parent has to give their financial information so that your child can apply. They see the financial situation that you guys are in, and then they make a determination of how much grant money you can get from the Pell Grant. There are other ways that the FAFSA can help, but mainly we're worried about the Pell Grant. And the Pell Grant, you don't have to repay that money. Repealing that requirement removes the burden from the student to track down their parents and try to get this information from them. One of the things that I remember being a child of divorce was having to get both of my parents to fill out the FAFSA so that I could see if we were qualified for the Pell Grant or I guess I was qualified for the Pell Grant. It was actually really difficult at the time.

Ryan Maruyama [00:02:32]:
I wonder if that was just because my parents are difficult, but I don't think so because both of them wanted me to go to college. They just had a lot of stuff going on as you can imagine, and this one didn't get to it. And then I had to go to this one. It was like, hey, fill this out. We gotta fill this out. Like, what's going on? And so I had to hunt both parties down. Granted, I was a child of divorce and not everyone's divorced, but it does remove that burden from the child either way. It doesn't put the burden on the child anymore to get this filled out from their parents in order to graduate.

Ryan Maruyama [00:03:03]:
And then even just to sign the waiver as well. I wanted to talk a little bit about these legislators when they first put it into practice and what they were thinking about and kind of missing the forest for the trees, or at least I think. These legislators, when they put this into effect, they wanted to help people get into college. They were concerned about what people were gonna do after high school as long as it was college. But really, what should you be worried about the most when you're in high school? And I think it's graduating high school. And Louisiana, by some estimates, has the 4th lowest graduation rates in the country. Then if you want to get into real numbers, estimates by the NCES, the National Center For Education Statistics, says they graduate 80% of high schoolers. US average is 86%.

Ryan Maruyama [00:03:48]:
Instead of putting in blocks and make it harder for them to graduate, the decision to have this type of legislation is all with the base assumption that college is good and everyone should go. That's why they do it. They're just saying blanket statement. College is good and everyone should go, and we are gonna put our money where our mouth is, then we're gonna make you fill out this application for possibly getting federal aid and federal money to then go to college. They just assume everyone should go to college. Why wouldn't you go to college? They don't know anything about your situation, about your finances, about your dreams, about your child's dreams, whether or not their career that they wanna do requires a college degree, whether or not the life that they want to live is one with a college degree or with a job that has that requires a college degree, which if you're listening to this podcast, you know that very few jobs out there actually require a college degree. And then they're saying like, oh, yeah. You should just go.

Ryan Maruyama [00:04:48]:
If you get the money, then you should go. It's like, well, how much is the Pell grant? And we'll get into that in a little bit. Even with the Pell grant, I don't have any money to send my child to college without making them drown in their own debt. Oh, no. I don't wanna do it. It just doesn't make any sense. So why are you shoving it down our throats? One of the articles that I read on this took a very thoughtful approach to the whole thing and attacked the issue from the perspective of college graduation rates. Everyone should read the article.

Ryan Maruyama [00:05:14]:
I'll put the link to it at the show notes, degreefree.c04/podcast. But to make a long story short, the Louisiana colleges have really bad graduation rates. We are of the mindset as is this writer and as of most people that you go to college for the piece of paper at the end. If we think about the degree as the marathon finisher shirt, and you think about getting the degree in this time in college as actually running the marathon, Nobody cares if you ran the marathon if you didn't get the finisher shirt. Nobody cares if you ran the marathon and you didn't get a degree. If you run 26.0 miles, that's great, but you didn't get the finisher shirt. If you go to 3 and a half years and you have 1 semester left, you're not going to put 3 and a half years on your resume and nobody's going to care. I mean, nobody cares if you have a college degree on your resume anyway, but you know what I mean? Like, you're not going to put that 3 and a half years on there.

Ryan Maruyama [00:06:09]:
This author is concerned about the college graduation rates because that's what you're doing. You're saying, I'm going to take this Pell grant money, then go spend my own money. I'm going to spend my own time. I'm gonna spend my own effort with my child. I'm gonna spend all of this effort, all of this time, all of this money, they better graduate. And what they're saying is that, well, they're not, they're not graduating. So what happened in 2018 in Louisiana is that the FAFSA application rose people that went to college rose, but then the people that graduated college, right? I mean, it's 5 years later, 6 years later, they still haven't graduated. They're not going to graduate and they're in debt now.

Ryan Maruyama [00:06:47]:
So they started the marathon, but then they never finished. They paid the entry fee, then never finished and got the finisher shirt, which is the whole reason why they're there. What I find crazy about this legislation is that the Pell Grant, the grant that you get when you complete the FAFSA, if you're eligible for the maximum amount, is only 7 $1,395 maximum as of this recording. I mean, even if you go to a state school or you go to like a cheap school that might pay for the tuition, but that will not pay your living expenses. Right? And so you either have to take out more loans for your living expenses or go get a job, which most college students aren't doing and don't do. So they're increasing the likelihood of your child going to college for $7,400. So let's just say that you go to a school and it's $30,000 a year to go there. Now, for $74100 in free money, it's gonna cost you $23,000 a year when the alternative was for your child to go and work instead and make $40,000 a year.

Ryan Maruyama [00:07:59]:
I mean, you can make $40,000 a year at Walmart. You make $40,000 a year at working at a local gas station. Your finances go literally the opposite way. So by the time that your child is done with their 4 year degree, there are cool $100,000 in debt. I mean, like, $23,000 a year over 4 years. And and I'm being generous. Right? Because if you listen to this podcast, you know, on average, it takes 5 and a half years to graduate, which when this journalist was talking about the graduation rates, they were also generous as well. And it wasn't just the 4 year graduation rates that they were looking at.

Ryan Maruyama [00:08:34]:
They were looking at the 6 year graduation rates, which were still abysmal. It's, like, less than 50% for, like, a lot of these schools at 6 years, which is, like, come on. I know some people that took, like, 8 years to graduate, 10 years to graduate. And, I mean, that's a long time. Now if you're part of the people that didn't graduate, but you did pay $30,000 to get that $74100, it costs you $23,000 a year. And let's say you went to 2 years and then you didn't graduate, good for you, you got out, but you're still now 50 grand in debt for your 2 years of college. And this is like, woah, what's going on here? Right? All starting with the FAFSA, all starting because you filled it out and you were never gonna fill that out. Maybe you were, maybe you weren't.

Ryan Maruyama [00:09:15]:
I know that it wasn't required for me, but I was like, wait a minute. Pell grant FAFSA. Okay. I'm going to college. So I'm going to fill it out. The people that are going to go to college, they are aware of the FAFSA, or at least they should be aware of the FAFSA. And that could be something that legislation could talk about. And that's maybe something that Louisiana high schools need to focus on, which is, like, parent education and child education on their options.

Ryan Maruyama [00:09:42]:
But mandating it, I mean, obviously, it was wrong. I mean, they repealed it, that they were first to do it, and they're the first to repeal it. And then changing gears a little bit, thought when thinking about this stuff, I was thinking, you know, there's the entire reasoning around why you should fill out the FAFSA. The argument is that in 2021, there was $3,750,000,000 that went unclaimed in the Pell Grant program or the FAFSA, then Pell Grant. When I think of FAFSA, I think of Pell Grant. Those are, like, congruent, but then there are, like, 4 different things that when you're signing up for the FAFSA that you can get, but it's just like part time work, basically, scholarships, which scholarships don't really come through the FAFSA. It's part of it. And then the other one is a loan.

Ryan Maruyama [00:10:27]:
You're applying for a loan or it approves you for a loan. There's like $36,000,000,000 total as of 2018 in the Pell grant program. The thought behind requiring everyone to fill out a FAFSA, all of your children is, oh, you don't want to miss out on the free money. But once again, what does that free money going to cost you? And I'm not even saying in the more meta because a lot of people have used this talking point, at least what I've read in like, oh, if we gave that money back, like that $3,750,000,000 in surplus, we gave that money back, put it somewhere else. We could do good somewhere else. Or if we just gave that back, put it back into the kitty, we don't have to tax people as much. And therefore, what is this program costing you? Like, how much? No, no, no. It's not what I'm saying.

Ryan Maruyama [00:11:21]:
What I'm saying is going back to what we were talking about, which is what is that $74100 going to cost you? How much more will you have to spend to get that $74100? For example, for me, I was going to college. I knew I was going to college. I got accepted into college. I knew that I was going. It made sense for me to fill out the FAFSA. It made sense for me to get the Pell Grant because I was going to pay that money anyway. But for my classmates that didn't go to college, why would they fill out the FAFSA? They knew that they weren't gonna go. If they knew they weren't gonna go, then why should it be mandated to fill out this thing, which is literally only one utility that has is to get you monies to go to college.

Ryan Maruyama [00:12:04]:
And if you know that you're not going to go to college, then why do I have to fill this thing out? Now, the whole getting money to save money, but then to save money, you have to spend money. It reminds me of those. Entertainment books. If you're of a certain age, you remember those things. You know, the ones you had to sell for, like, fundraisers? It was in the office, and they had, like, the I think it was Halloween episode. They were like, we want it, the best costume or whatever, $34,000 in savings. And Oscar, I think, was like, to get all those savings, you'd have to spend, like, $75,000 And it just reminds me of that situation. Like, everybody's fighting over this thing.

Ryan Maruyama [00:12:44]:
It's like, oh, $34,000 in savings, but it's like, yeah, but how much do you have to spend? How much money, time, effort do you have to spend to get that $7,400? And that's assuming that you are incredibly low income and that you do get the maximum amount awarded to you. The whole reasoning around why we should require and mandate high schoolers to fill out the FAFSA, that whole argument that I just laid out, it reminds me of a conversation I was having with 1 of the top people in affordable housing in Hawaii. This guy was in charge of 2 of the biggest low income housing projects on Oahu. We started talking and I'm just absolutely fascinated by his job. Like I'm at least blown away by his job. I asked how work is, and he says, we're doing okay. Well, we've got, like, 5% vacancy. We gotta fill those.

Ryan Maruyama [00:13:37]:
And then I followed up with, how long do people normally stay in there? Okay. 5% vacancy. What's the goal to get them out by and help them get out of low income housing? And I asked this question to just be like, well, I'm assuming that we want to transition people out of low income housing because because to be in low income housing, you have to be low income. You have to maintain a low income. I'm thinking, well, we want to help people raise their incomes and get out of low income housings that they can increase their standard of living. With, higher income comes an increased standard of living. And so he just looks at me dumbfounded and he's like, we don't track that. Isn't the whole goal here to like, get people out of low income housing, start making more money, like I was saying, and improve their lives.

Ryan Maruyama [00:14:23]:
Then someone else that needs low income housing because they've fallen on hard times, they come in and take their place. Hopefully, there's a revolving door people. And for me, in my mind, I'm thinking the ideal utopian dream is that that doesn't exist. Nobody's in there because everybody's doing great and we live in a great world. And he's like, yeah, no, we don't track that. So then I asked him, I said, so what success for you? And he's like a 100% occupancy. And I was like, occupancy at all times. Like, that's the goal.

Ryan Maruyama [00:14:57]:
That's what we're tracking. Like, that's what we want. We just want these rooms to be filled. Yeah. And you don't mind if somebody is in this house for like 10, 20 years. That's good to you. Right? But it doesn't matter how long they're in there. We just need the rooms to be occupied.

Ryan Maruyama [00:15:12]:
And I was like, shouldn't it basically be the opposite in an ideal world like we were talking about? I just don't understand. And this reminds me of that conversation. This is like he was looking at all of the empty that he had. Right? The 5% vacancy, once again, like the 3 point something $1,000,000,000 or $3,750,000,000 that wasn't used and people are looking at that and be like, well, we got to use it up. We got to use it up. Okay. Sure. Definitely.

Ryan Maruyama [00:15:37]:
It was portioned out for that. And if it's not getting out to people, then we're not helping that much more people. We're really shooting the goal to, like, get people out of it, get people to not need it. I don't know. I'm just asking. I don't have the answers. I'm just asking the question. Let me know what you think.

Ryan Maruyama [00:15:54]:
YouTube comments, Spotify comments. I really don't know. I wanna know what you think. Moving on, the last thing that I wanted to talk about, and this is really where I got a little bit excited about this thing. It's kind of adjacent to what we've been doing or what I've done once about the marketing secrets of colleges, but this isn't really college, but it is. It's the whole system. I wanted to break down what filling out the FAFSA does for you and your child filling out the FAFSA makes it much more likely that you or your child go to college. By one estimate from a 2009 study and a 2013 follow-up, 91% of students who completed a FAFSA had a post secondary enrollment.

Ryan Maruyama [00:16:38]:
That's almost 92%. Granted that was 10 years ago. Granted that's completely correlational and that's from the NCES. I did in fact check them, but that was for the study that they did. They found that 92% of students who completed a FAFSA had a post secondary enrollment. Once again, when you don't mandate it, that makes sense because the people that are filling out the FAFSA, they're they're gonna go through it. I mean, it's pretty invasive. They do ask about your income and everything, your assets and things like that, then apply.

Ryan Maruyama [00:17:08]:
And so most people, if you make it optional, the people that are applying are the ones that want to go to college. That's selection bias right there. So like 92% of people that say they want to go to college, you know, like, no shit. It's like, wow. What a great finding. I'm just giving you what I found. What I wanted to talk to you about was why it's much more likely for your child to go to college, and it has everything to do with marketing and persuasion. When first hearing about this, it reminded me of a book by Robert Cialdini, a study that he highlighted in that book.

Ryan Maruyama [00:17:43]:
It was chapter 7, commitment and consistency. I won't read the book. You can pick it up, influence. It's, like, one of the best, most sold business books out there. It's pretty good, and I've read it a bunch, but it reminded me of one of the studies that he talks about where they ask people whether or not they're willing to put up a big sign, a huge sign in their front yard. And I think it's like, don't speed in your neighborhood. And most people, it's like a big sign, takes 2 hands, maybe takes 2 people to put down. And so it's a big commitment.

Ryan Maruyama [00:18:17]:
Most people when just cold approached, they're like, nah, I'm not going to do that. Which is like, that makes sense. I probably wouldn't do it either. And you're like, no, I'm not going to put that up in my yard. No. What they found was interesting. I think it was like a 70 something percent increase, 71% increase or something like that in the amount of people that said yes in the compliance rates when they did one thing 2 weeks earlier. 2 weeks earlier, they committed to having a much smaller, like, bumper size sticker in the inside of their house, like, window.

Ryan Maruyama [00:18:50]:
Like, don't speed. Those people were 71% more likely to say yes. And it's because they had already committed to doing a certain action. Right? Like, I am the person that's committed to fighting speed. I am the person that's committed to having random people give me signs, that type of thing. With this, it reminded me of that. Like, I'm the type of person that fills out the FAFSA. I'm the type of person that cares about my child going to college, even though your child maybe didn't want to go to college or you don't have the money.

Ryan Maruyama [00:19:25]:
Like, you know that you don't have the money and you don't want your child to be in debt, but you're the type of person that goes and gets and hunts for free monies that's out there for your child to use to then go to college. You're that type of person. Your child is that type of person, and they're committed to it. And so it's much more likely for you and your child to say yes to college because you've already done this one act. Let's just remove college and let's talk about something completely irrelevant to it. Let's say you go to the mechanic shop and you want an oil change done, and it's the only place to get an oil change when you can't go up the street or whatever. And they say, yep, to get an oil change, you have to fill out our application to get 4 new tires, like to get a discount on 4 new tires. And you're like, I don't need 4 new tires, but screw it.

Ryan Maruyama [00:20:14]:
I'll do it anyway. I need the oil change and you're the only place in town to do it. And like, although I don't need 4 new tires and I know that I don't need 4 new tires, like whatever. Now, how much more likely are you to get new tires? You're like way more likely to get new tires because you might have thought back and you're like, well, you know what? I do need new tires. Alright. Well, I guess I'll get the tires. Or, like, yeah. Well, it says that I have 10% off.

Ryan Maruyama [00:20:39]:
Well, 10% might as well. I wasn't gonna get new tires today, but sure. You've already done a big action. You've already committed to it. And so since you've already committed to it, it's much, much easier for you to say yes to the next thing. It's kinda similar, but different to what we were talking about with the AP courses and dual enrollment. You've already taken all of these actions. Your child has taken all of these actions, and they're like, well, look at all the hard work I've done.

Ryan Maruyama [00:21:07]:
You don't want me to throw all this hard work away. Right? You better make the purchase because that's the only way to make all of this hard work worth it. From a marketing perspective, it makes so much sense. This type of marketing, this type of tactic, this is so effective that it works even if you know about it. You're like, you're listening to this. So now you know about it. You're gonna be aware the next time that this happens to you, but you're gonna be like, well, I need the thing and this is a good deal. All right.

Ryan Maruyama [00:21:33]:
Well, let's just do it. That's fine. But at least now, you know, the whole system is just geared to market towards you and your child to go to college. Go to college, go to college, go to college, doesn't matter. Blanket statements for everybody. They're just saying college equals good regardless of how much it costs. Here's some free money. Here's coupons for you to go and then make a $100,000 purchase.

Ryan Maruyama [00:21:59]:
Hey there. I hope that you're loving this episode of the degree free. Podcast. We spend a ton of time every week creating this content for you. So my only ask is you take a quick second to leave a review or a thumbs up on whatever platform you're on. It's one of the best and easiest ways that you can support this podcast, and this simple action can help bring more people into the degree free community. At degree free, we wanna help as many people as we can thrive and succeed without needing a college degree. Your review will be a step in that direction.

Ryan Maruyama [00:22:27]:
If you could do this small favor right now, pause this and leave a review. It would truly mean the world to us. Us. Thank you. And back to the show.

Ryan Maruyama [00:22:34]:
Here's $7,400 a year for you to go make a $100,000 purchase. Here's 30 grand, 30% off for you to pay $70. If that's a business and I was charging $100,000 I don't know. It'd be depending on the fulfillment, 30% off to make it a no brainer for you. I mean, maybe, probably. Like, let's do it. And then especially considering now you think the college isn't the one actually doing it. They're in cahoots with the federal government, and the federal government is the one that's actually supplying this money.

Ryan Maruyama [00:23:06]:
So it's even better deal for the college because the college isn't taking a hit at all. But I mean, just from a business perspective, I would consider it 30% off. I would consider it. Why wouldn't I? I mean, depending on the margins and everything like that, maybe. But now they're just getting free money from the government. Yeah. This is a no brainer. Anyway, I saw this from Louisiana because I had a whole different discussion that I wanted to talk about regarding the FAFSA requirements.

Ryan Maruyama [00:23:33]:
I wanted to talk about what I talked about the very beginning about how it is so opposite to be one side of your mouth lowering the degree requirements for your state jobs. But then in some states, in a bunch of states, they are starting to require the FAFSA to graduate, and it just does doesn't make sense to me. So that was the original episode that I had planned a few months ago, and is one of the 7 things that I was studying up on. But then this came through, and I was just like, this is crazy. I mean, the first state to mandate the FAFSA be filled out is also the first state to repeal it because it was a bad idea. So that was this week's episode. Leave your comments, YouTube, Spotify. Ask your questions.

Ryan Maruyama [00:24:15]:
Ask at degreefree.coforward/question. That's pretty much it. Until next week, guys. Aloha.