Frank, which connects students to financial aid, is launching Classfinder to help students access discounted courses. Frank CEO Charlie Javice joins Yahoo Finance Live to discuss.
BRIAN CHEUNG: Here's a statistic for you. Aside from mortgages and housing debt, the biggest bill that Americans paid by far is student loans. That's $1.55 trillion in student debt, according to the New York Fed's most recent numbers. And we have with us Charlie Javice. She's the CEO of Frank. It tries to help people figure out their options with their debt load. And Yahoo Finance's reporter covering education, Aarthi Swaminathan, joins us as well.
Charlie, I want to kick things off by asking specifically about online classes. They're really expensive, I know, because I'm in one right now. And it's my understanding that Frank's new offering, called Class Finder, hopes to offer cheaper virtual classes. So explain to us exactly what Class Finder does, and how is that going to take on maybe giants in the space, like Coursera, for example.
CHARLIE JAVICE: For sure. So as we know, COVID sent everybody learning online. And that was a first for so many students. Families expected the price to go down, because obviously, you're not on campus, it doesn't seem as expensive, it's online. Why are we paying $40,000, or potentially more, for an online education?
And we came up with Class Finder and partnered with hundreds of universities in the US to be able to offer their courses at a steep discount to their usual prices. And so on Class Finder, you can browse thousands of classes-- I think there's close to 8,200 classes. Every single week, we add more. We add more colleges. And it's a wonderful place to be able to take general education requirements, as well as different interesting courses that you might think are more interesting than your AP, like sports management, for example.
And when you think about the marketplace and how to get a job when you graduate, getting a certificate or getting a badge, like you do on Coursera or Udemy, isn't really enough when it comes to employment. A recent study from Opportunity At Work actually states that close to 70% of all job descriptions require a bachelor's degree. So that means you need real college credit counting toward a real degree. So it's super important to be taking those transferable credits, and not just general online courses.
AARTHI SWAMINATHAN: Charlie, I have a two part question for you. So ED released-- the Department of Education released a bunch of new data on how they spent the CARES Act money. I'm curious, how did that CARES Act money filter down to students, and then with this new proposal, a lot of changes to FAFSA, right? How does that affect your business?
CHARLIE JAVICE: Yeah, so I think that's a really controversial question when it comes to how CARES money was spent, because when it comes to transparency, it's oftentimes really challenging to get to see things in real time. You might get it years later when it comes to higher education.
That being said, we know that the original CARES Act, we had about $14 billion allocated to higher education, $7 billion of which were meant to be directly dispersed to students. Unlike the PPP program that had dispersed money in a matter of days, we had colleges, months into the program of receiving these CARES funds or [INAUDIBLE] funds maybe spend 40% and give them to students.
So I think I'm cautiously optimistic that we've learned a lot from the way we disbursed funding over the summer that we could go into this next season of funding in a much more prepared way, where schools can feel more confident dispersing funds, and the Department of Ed has really set a precedent. So I do hope that money does trickle down.
That being said, there isn't a specific amount allocated to students. Only in the for profit education sector does it actually say it will be dispersed directly to students. In the nonprofit and public sectors, it kind of holds out. So we are anxiously awaiting what the documentation actually says. Hopefully we'll get it later today. I hear it's 4,000 pages or so long. So I guess we'll read through that carefully, and hopefully report back. But cautiously optimistic.
SEANA SMITH: Hey, Charlie. It's Seana. I'm curious just about this program here, beyond the pandemic. So once we go back to a quote unquote life as normal, and students return to college campuses, they're not taking the majority of their classes online, what role do you see this program playing, and how could it potentially help address that $1.6 trillion student debt crisis that we continue to face in the country?
CHARLIE JAVICE: For sure. I think it's a wonderful question, because when you think about hacking the price of your college degree, I think what the pandemic has done has accelerated the affordability trends, and kind of put a huge highlight again on how expensive higher education is. And when we think about Class Finder, we're talking about $300 courses versus a national public average for in-state being about $950. So you can have huge savings by transferring college credits, whether it's Class Finder, or different community colleges that are local, that can save you money to both graduate early, as well as being able to maximize your financial aid and spend dollars wisely.
So I think more people are going to be more open to what we call unbundling of education, where you're less sensitive to where you take the course because the quality has become such a commodity these days, and people will start thinking about, where can I get these skills, where is the value in the skills I am attaining, and how to think about higher education moving forward as being able to have a type of open university system, pushing and compressing prices down, where students have the power to choose and advocate for themselves.
AARTHI SWAMINATHAN: Hey, Charlie. So there has been a massive drop in FAFSA applications, right? 17%. There is also this re-examination of what it means to have a higher education. So what are you hearing from students? What is the number one priority for them? Is it cost, or something else?
CHARLIE JAVICE: I think there's two elements at play. I think uncertainty is a really big one, because your family members might be sick, you might be sick, you don't know if you're going to be getting a job in the near future. So I think uncertainty's playing a big role when it comes to FAFSA declines and enrollment declines.
That being said, now that vaccine's come out, hopefully the strains don't put a wrench into that. But we should be seeing a pick up as the deadlines were pushed back. So I do think people still have time to be filing.
That being said, I do think what is changing when it comes to COVID is just how people value their education and their time. And when it comes to how the best ways to save are, when it comes to going to college, file your FAFSA, do it early. We take these online asynchronous courses so that you can work at the same time, and be able to gain useful work experience and skills to become more hirable while getting paid while you're in school.
You should always be appealing your aid, because what COVID really taught us is schools' lowest price and best aid award is not the best aid award. They will keep lowering prices to keep you in school, and are at your best renegotiating that tuition bill. And most importantly, do it as early as possible, because aid is somewhat first come, first serve. So it's important that you get all that paperwork in early, and that's why the delays, I think, are so concerning, because it could hurt and leave out a lot of students, and from the reports we're seeing, has disparately impacted minorities, as well as low-income families the most.