Episode 444: Neal and Toby chat about the recent data showing not all college tuition is getting expensive, in fact, it’s become more affordable in the last decade. Then, Britain’s Labour Party swings for the fences to catch up to the US economy by announcing its biggest tax hike on the wealthy yet. Next, Chinese EV maker BYD overtakes Tesla in EV sales for the first time this quarter, signaling that a new EV king could be crowned. Meanwhile, the fast-casual restaurant industry might be struggling but Chili’s is riding high thanks to its Triple Dipper platter. And, Super Micro has a colossal $50B stock wipeout. Lastly, important headlines you need to know to end your day. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Find your fit at bonobos.com and use code BREW20 for 20% off. Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316 Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 -NYC Marathon Weekend 03:10 - College Tuition Prices 08:00 - UK Raising Taxes 12:00 - BYD Overtakes Tesla 17:25 - Stock of the Week 20:45 - Dog of the Week 23:30 - Headlines Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Is college tuition really getting cheaper?
And 18% of students at private colleges and universities also qualify for the same deal. So colleges have this thing where they put out this sticker price to the world that gets broadcasted and headlines all over. And what you actually pay is a lot less. And the overall trend line is staying flat or even going down, which is a huge surprise.
It was a huge surprise. College is a competitive market just like any other market. I mean, we see the restaurant industry right now fighting over customers by lowering prices. Same is kind of true for colleges. More colleges are competing for a smaller pool of prospective high school students. So they've really been forced to make tuition changes. cheaper.
And the way that they are doing that is because a lot of state and federal funding is flowing into these universities. A lot in the decline in net prices of state college is because they are getting more funding. And I think it is, we have to go back to another story we did, which was a bunch of Northeast students are now going to college in the South because states are learning that if you can get
people, young people, young college educated people to move to your state and go to colleges. A lot of them stick around. It has a big impact on local economies. About two-thirds of college graduates do end up working in the states where they attended college.
So I think that might have been a little bit of a wake-up moment that maybe we shouldn't be pulling funding away from making college more affordable. We should be putting more funding into that.
Now, people listening to this, and if I were listening to this, I'd probably be like, okay, Dylan and Toby, you went to college. You know that tuition and fees are just a fraction of what you'd pay. What about the all-in costs, room, board, personal expenses, textbooks, things like that? That must be going up, right? Well, yes, a little bit, but not by much as inflation at all.
The net cost of attendance is going into 2024, 2025 school year versus the previous year at private universities was up 1.4%, lower than inflation, up by less than 1% at public four-year institutions, much less than inflation. So even the all-in costs are going up by less than inflation, which we know has been going up a ton in the last four years. Another...
hopeful stat here is we talk a lot about the student loan crisis and people piling up student debt. Well, undergrad borrowing is down for the 13th consecutive year. That's also a news item you probably haven't heard. Undergrad students and their parents borrowed $99 billion in federal and private loans last school year, which is down from a peak of $159 billion in 2010 and 2011. And a lot of this
is attributable to the fact that just fewer people are going to college. We have a bit of a demographic issue going on with fewer young people getting born and going to college. College enrollment peaked in the United States in 2010, 18.1 million people. In 2021, that was down to 15.4 million, and the oncoming freshman class for 2025-2026 is expected to be down 5%. So you're right.
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Chapter 2: What major tax changes are happening in the UK?
and now they are pausing production because of sapping demand. So that just really tells you where the winds are blowing here.
Up next, after a wild week in the market, let's see who our Stock of the Week, Dog of the Week is. It is Stock of the Week, Dog of the Week time, where Neil and I bring you one stock who got all Twix, Reese's Cups, and Skittles while trick-or-treating, and one stock that only got Dots, Black Licorice, and Candy Corn. Neil, you won the pre-show game of who can eat the most Haribo gummy bears.
So you're up first with a tummy ache. What's our Stock of the Week?
My Stock of the Week is Brinker International. which probably doesn't mean anything until I tell you it's the owner of the restaurant chain Chili's. Brinker popped more than 8% this week because Chili's is kicking butt. On Wednesday, the chain reported a year-over-year sales increase of 15% while traffic jumped 6% last quarter. And it's all the more impressive given that
All of Chili's rivals are either flatlining or going bankrupt. Traffic to U.S. restaurants was down by 3.3% this year, while visits to casual dining restaurants dropped 4.5%. So what is Chili's doing right? It slings good enough food for affordable prices, and that's been a winning formula for Americans battered by high inflation.
One huge success story has been this Big Smasher burger meal, which rivals the McDonald's Big Mac. Costs just $10.99 and includes unlimited drink refills and bottomless chips with salsa and french fries. That's been a significant traffic driver, the CEO said. Plus, you can't talk Chili's success without its comedic, relevant marketing.
Its promotional team has tapped into pop culture trends and responded quickly when Chili's dishes have gone viral on TikTok, which happened with its triple dipper appetizer platter. Tell me a rare restaurant W. The restaurant industry is so odd because what Chili's did well is just name a burger, the Big Smasher.
I know. As soon as I was saying that, I was like, is this a real thing? But it does speak to a wider truth. You've got to nail your social media presence. You've got to nail these promotions, these special items. So the Big Smasher and the Triple Dipper, check those boxes. I mean, it offers $6 margaritas as well, which never hurts.
If you look at how the broader fast casual industry is doing right now, they are obsessed with trying to get prices down because you just see bankruptcies everywhere you look. But Chili's is like, you want a big smasher, which, again, does provide great value. It shows it's part art, part science here. People do just have this great love for Chili's right now, though.
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