have a great night. "the willis report" is coming up next. gerri: hello, everybody, i am gerri willis. tonight on "the willis report." with two weeks to go before the rollout of the new obamacare exchanges, big employers pushing workers to take care of their own health benefits. president obama: if you like your health care plan, you will be able to keep your health care plan. gerri: the new iphone reviews are in. wait until you hear what everybody is raving about. and our special series this week, the user's guide to education. so how do you get the right financial aid package? where watching out for you tonight on "the willis report." ♪

we will get to tonight's top story in just a moment, but first a quick note about our special series this week on the user's guide to education. tonight at the bottom of the hour i am drilling down on one of the biggest challenges for american families when it comes to sending their kids to college and that is this, getting the best financial aid package. i'm going to walk you through step by step the best way to get loans and the free money scholarships. and i will talk to former education secretary, she has some revealing thoughts about the shortcomings of college education and will result the mac respond to that charge. all coming up. but now on to tonight's top story. federal reserve announcing hours ago it will not not taper the 85 lien dollars of monthly bond buys due to the economic outlook. a lot to get to come a lot of great stories.

chief economics correspondent for the "wall street journal." my head is still reeling from this. the fed set us up for weeks, months to expect some dialing back on the bond buying. we have been waiting and waiting. i have seen a lot of reasons why. what do you think? >> they did not get the economy that they had been predicting they would get. they have beengrowth to pick upd it hasn't happened. growth looks like it will come in below 2%. job growth slowed this summer, so they have been laying the groundwork for the opportunity to pull back on this program but it was always predicated on a stronger economy. they are waiting. gerri: let me tell you how we are waiting. >> we have said they were on the fence about this. i am puzzled by the way the

market became so convinced they were going to do something at this meeting because everybody i talked to before the meeting was telling me, talking federal officials that were saying i haven't decided, i don't know what we're going to do yet. they were really torn on this decision. now they come up to the meeting today after all of this weak economic data and they are looking at congress and president obama back to their old tricks fighting about continuing resolutions and debt limits and they think we could be headed for more turbulence. gerri: what i hear his economic weakness, fewer jobs and more pain in the wallet. what does the fed's decision mean for my wallet? more for those trying to get a return on their savings, lower rates for mortgage buyers? what do you say? >> ironically the fed looks very indecisive today as you said talked about this for so long

and not acted. investors loved it. the stock market rallied and resolvwesaw long-term interest o down again, which means in another week or two mortgage rates will come down a little bit. the bottom line, investors like they are easy money and what they were told today is they will get more of it. gerri: we have been on an iv drip, it has been going on and on and on. i have to think here we are with this punk economy. isn't the fed credibility getting hurt here? >> you talk about an iv economy, the fed is entirely right. the economy has been in the sickbed since the financial crisis and the challenge for the fed all along has been how much medicine to put into the patient and went to turn it up.

if you go back to the great depression, back to the japanese economy an in all kinds of other financial crisis, when ofa financial crisis when the banking system is not on the floor, takes a long time to come back from these things and that is the problem the fed faces. you ask about the fed credibility, a real problem for fed's credibility with that they got into that crisis in the first place. really haven't fully recovered from that yet. gerri: keeping the punch ball out too long. i may have to relive that one. thank you for coming on. i know you know this, but you are the preeminent fed watcher in the country these days. what you say matters about what the fed is doing and we appreciate you taking the time out to talk with us tonight. >> thank you, i appreciate that. gerri: the fed changing their tapering plans, they will give us less stimulus. the federal government changing his prediction on obama cap impact next year.

they are quietly scaling back their estimate of how many uninsured folks will be able to get coverage under obamacare and guess what, it is half of what they usually say. with more on this, president of the american actions for them. how do you react to that? >> if you go back to the beginning of the debate the goal was to cover more americans and control health care costs. first shoe drops, we will not cover as many as we said, we still don't know what it will cost. and then, have we control health care costs? health care costs are going to accelerate over the next decade, not get cheaper. 0-for-2. gerri: i had to tell you this is from health and human services. this isn't some conservative think tank saying they are never going to cover all of these. this is the obama administration saying we are missing our goal. not only will you not keep your

own doctor, you won't have the same coverage, less coverage, you will pay more for it. the original goal of the program, we are not getting that either. this is outrageous for what we are paying. >> we have heard a lot of quiet romans of the startup in obamacare. rarely do we see his get above the surface. this is one of those moments. we still don't know which they will get. if the don't of those that are young and healthy, they wil loot those were quite ill and very expensive bills. in many cases they do not last if you don't get the young and healthy. this raises different kinds of failures for next year. gerri: it is two weeks from now in the obamacare exchanges open and now i am reading they will have a soft launch of this. deciding we will not tout the opening of the obamacare exchanges to cause we're scared to death young men will not sign up.

>> from what we have seen in the studies, it is sticker shock for a young, healthy male. they have leaked some painting the best picture they can did i'm looking forward to seeing all of the data. you can tell you ministration is not because even the navigators, the people they hire to advertise this are not putting out the information how to sign up. gerri: who are these people anyway? we will give our personal information to these people to help us navigate through obamacare, are you kidding me? >> even those who mean well. the exchange sent out a spreadsheet that contained the social security numbers and other personal data of individuals. they realized they had made a mistake, they quickly tried to get the data back.

it does raise a lot of concerns if you are one of the 11 million you may not be very happy about it. gerri: who knows what happens. i want to ask you about something else we had walgreens saying we will take our employees and put them in a private insurance exchange, not obamacare. we will give them a certain amount of money, a defined contribution to go on these exchanges. what do you make of that? >> it is the future, to be honest. we saw the pension turn from defined benefits to defined conditions and it was unsustainable. companies are recognizing it, so they are empowering the consumers in this case. gerri: it is not empowering the consumer if you're making me do all the work and take on more of the cost. >> the key will be how robust are these exchanges when you give me my stipend and i go out there, cap find the policy i

prefer and the reason i think we're going to private exchanges is a avoid the heavy predatory burden with the exchanges that come with limited choices, it could be a much more promising markemarketplace and it is worth watching. gerri: another report about medicare, tell me about that. >> they put out an office of premium support. the paul ryan plan for medicare reform. at the time they said we just don't know how to do this, it is far too complicated. gerri: what they didn't know how to do was analyze the cost of that. you would be putting the burden of cost on seniors and they wouldn't be getting any help. sort of what walgreens is doing. but they had something interesting to say.

>> if you do this it is cheaper for the federal government, also cheaper for the beneficiaries, it also bends the health care cost curve. they said this would work. gerri: what are we to years in obamacare, something like that? >> yes. gerri: so i can't keep my doctor, cap keep my health plan. i may not be able to get coverage from obamacare. maybe it would have been better in the first place to use paul ryan's plan? >> you make it sound like a bad thing. gerri: thank you for coming on. lots of stuff going on. more to come including what to look for when you are buying wine. uncle sam pushing subprime

mortgages on to consumers. that is right, details after the break. ♪

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join us. [ male announcer ] at edward jones, it's how we make sense of investing. gerri: the government attacking regulation upon the relation to mortgage lenders helping you get the new home. that is not stopping uncle sam from pushing subprime mortgages. despite being a prime reason the financial crisis five years ago. with more on this, the editor in chief on american thinker. always good to see you. this story i had to say, i as a shocker to me because we know the role these mortgages played in the mortgage meltdown and financial crisis. we didn't have those, he you wouldn't have had a crisis, what is going on here, what is the government doing? >> house in phoenix at a risk management conference. probably loves mortgage bankers but the message they were getting was for somebody like myself who has been covering this for a few years kind of confusing. the government was saying zero defects for borrowers who have

pretty good credit and a decent job and everything. when it comes to people who really can't afford a mortgage, throw these rules out the window and we want you to give them mortgages. one of the principal organizations involved in this is the fha. the minimum down payment you need is 3.5%, has been that way for some time but sean donovan oversees the secretary of housing and urban development which oversees the fha says we want to reduce from three years to one year the amount of time after you get foreclosed upon that you can get a new one. the bankers are scratching their heads saying we are supposed be writing mortgages for people who were foreclosed upon a year ago? with the people who are good credits. everything has to be perfect? gerri: that is not right. and so here is the government leading us down the road we went down five years ago. there is this kind of unholy

alliance between government on the one hand and congress on the other where they say owning a house is a primary goal, i believe it is an american dream that i don't think everybody should own a house. if you can afford it, you should own a house. congress wants to push this down our throats, they want everybody to have one matter what it costs and we cannot do that, can we? >> part of that is the mortgage industry. obviously there are lots of vested interest on the left and the right that want as much money as possible to be going into housing for obvious reasons. some are social goals, some are financial. i think what you have here is the government is pushing subprime mortgages and the fha, we're not talking about a rounding error. still 27% of the mortgages are underwritten by the fha.

no one is going to talk badly about getting mortgages to struggling soldiers, but at the same time to your point not everybody can afford a house. are you doing these people a favor if you're making them stretch to the last dime? gerri: we learne learn what thes of that are. here's what you said to the producer. where turning down people mortgage professionals believe reserve mortgages turned down the credit is on the ability to repay while others have no business attending mortgages are getting them. it is not just people who should not be getting them are getting them, it is people who want to have them and are willing to pay cannot get them. i get a lot of e-mails of people who want to buy a second home, i want to buy a first home, and i can't because the standards are so strict. do you think the rules are too tight on that? too tight on the other? >> the government bailed out

housing insurer, he was saying we want zero defects on 200 different things which run the gamut from your income to whether there is a good driveway to all these things. gerri: driveway? >> you can make them check all the boxes and get everything perfect but it cost money. you need to send people out there. what you do is drive up the cost, make it more bureaucratic for people who are good credit to get mortgages. gerri: don't we just had to get the government out of this? >> that is what a lot of people would like to do. reform fannie and freddie, has gotten some traction from the left and the right, but it doesn't seem like it will have enough traction to really move forward this year, next year. i have talked to people well connected in the industry. maybe two years from now. gerri: the secret things to

government says, they hope nobody hears, it is shocking. thank you for coming in. appreciate it. good story. i will be talking to the woman who once ran the department of education as part of our users guide to education. and next answer the question how do you do that? advise how to buy red wine with good price and do you think i have wine on the set? of course, i do not. the producers did not do that.

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good bottle of wine without breaking the bank. in 60 seconds.

gerri: may be you enjoy a nice bottle of wine with dinner but you hate the big price tag that goes with it. here are ways to get a bargain without sacrificing taste. senior editor for consumer reports. always good to see you, my friend. why aren't you here, and where is the wine? >> the wine is locked up at yonkers. last time i brought mayonnaise and catch up. gerri: you have some good advice for us because i read the notes and it is really great stuff. you going to a wine store and there are millions of things to choose from. so how do you whittle down to a small number? >> 30% of people in a survey said they are turned off because they're overwhelmed a choice and also turned off by people who

work at wine stores who give a lot of pretentious commentary. it is overwhelming on a lot of levels but the secret is the fact is consumers reports have been testing wine for years and superb bottles can be had whether you like red or white for 10 to $20. often the difference between $20.100 bottle of wine is miniscule sold an expert can decipher. you should not be overwhelmed. gerri: my palate is just not that refined. there are experts who can tell the difference but i am not one of them. one of the things he talked about in your notes is costco is a great place to buy wine. how so? >> one of the leading wine cellars in all of america. only in 36 states because the state governed where wine can be sold by they have a limited assortment so you are not overwhelmed, they sold wine at the sweet spot.

25-$28 they average and they make a lot of wine under their own label that offer exceptional value to the 2011 chardonnay. it was wonderful. $7. you cannot go wrong. gerri: who knew. you also say imports are a good deal. >> three quarters of the wine we have in this country comes from the u.s. there are plenty of great deals of quality imports. riesling from austria, these are places serving up fantastic wine and very economical prices. gerri: online sites are good, lot of wine sold online these days. >> one of the great sites is a

place called wine searcher.com. check out the finder tool. asking the kind of grapes you like, the region you're looking for and your budget 39,000 stores, wineries and even auctions to come up with the right mix of your budget and your taste and often you pay less than you would locally. amazon is another place. they have deals to sell direct to 500 wineries. unfortunately only consumers in 14 states because of the law. gerri: next time you are over, red or white? >> whatever tickles your fancy. gerri: thank you for coming on, good stuff, good story. we get a lot of messages for you on this topic but now we want to know what you think. how much you spend on a bottle of wine?

vote on the right-hand side of the screen and i will share the results at the end of the show. we have more specifically our users guide education. more free public and private loans, which are best. which schools give the best money and we will be joined by the former cemetery of education margaret spelling offering her resolution to the student loan crisis. this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fiy thousand dollars. congratulations you are our one millionth customer. nobody likes to miss out. that's why ally treats all their customers the same. whether you're the first or the millionth.

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mid-size price. (aaron) purrrft. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. >> from our fox business studios in new york, here again is gerri willis. gerri: all this week we're investigating a growing crisis in our nation's colleges, rising costs pushing steven steeper in deeper into debt.

job prospects when they graduate. stock -- stats the startling, and stephen wants answers. what does it take to fix the cause prices? earlier today i spoke with former education secretary margaret spelling and asked her why she thinks college has gotten so expensive. >> i think it is a number of things. for starters, our higher ed officials and educators argue that, you know, they have been subject to a lot of mandates, health care, and other sorts of mandates that they're pushing off on to students. they argue that state support is down from legislatures across the country, and that has caused them to raise prices, but think that to the matter is the religion of the answer to that question because we lack transparency and information from a basic consumer information in their product. we spend more money in families

are struggling to access higher-ups'. gerri: getting a seat is a little like being on an airplane. the people to your left and the people to the right may be paying totally different prices. it is not transparent. do not know what people paying. you may be paying something different. but the depth of the problem. take a look at these numbers. over the past 30 years housing costs have gone up 375%. health care of 600%. tuition is up 1100%. this seems to be out of control, and i wonder what you think the role of government funding in student lending is doing. is this making those costs go even higher? >> as i said, and all sides with information. the trick is really don't know what is causing costs to go up. people of come to expect the higher education system that provides a lot of things to a lot of people with not much to show for it, especially for poor

and minority students. gerri: used to be if he had a college education compared john high-school graduates to earn something like a million dollars more over your lifetime, but the experts say that is not true. see you agree? >> idea. as think we have cut and out of just any old higher education for any purpose that is going to give back it does help market. particularly since so many of our students are not completing. you have about a 50 percent chance of getting out and far less than that obviously if you are a poor or minority student, and it is shocking. suspending a lot of time and money to not get what you came for is a bad deal for consumers and freckly a bad deal for employers. that was just at a conference just a day. 4 million until jobs in this country today because employers cannot find skilled workers. we have a huge problem. it. gerri: that is the tragedy, and i could not agree more.

we are finding something which i am sure you are familiar with a loss of 40 percent of students, they don't know any more than when they started. it is not just the you're paying more for this education, it is that the value of which are getting to is not as good as it used to be. the author of that but tell me this week that it is like to discuss a summer camp instead going to college. to you think our standards, what we're asking seven to accomplish , all we're asking students to do is not good enough, not setting the bar high enough? >> that's right. i do agree and think until we get -- and some states have done this, transparency of around the value of these credentials. some states have passed legislation whether a test their lower class meant to make sure the students are ready to do higher level course work. so at least there's a little bit of the allegation. the level of rancor is substantial and relevant in the

workplace. gerri: one more quick question. a lot of people think part of the answer to the problem is online learning, and they're is a huge variance and the quality of line learning. some of these are fantastic, some terrible. is that part of the solution to the problem? >> i think it is. will we need to get to is what we in education, competency based model. you have to prove that you have learned what it is the you came for. and so as soon, assessment through portfolio, of through various methods that you demonstrate that you have actually led the material. that is when we will know the value. so just like anything in higher education, whether technologically based courses are not, we need to make sure that can see this as something when they get out. the way we do that is validate that through assessments and employers and other ways in the job market. gerri: a long way to go, and in the meantime middle-class families are struggling mightily

to put little johnny through college. it was great having you on the show. secretary spelling, thank you for your time. so good to talk to you. really appreciated. >> thanks. gerri: smart lady. reviews are in, and more of the user's guide to education as we investigate all aspects of getting the right aid package for college. stay with us. ♪ [ tires screech ]

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♪ gerri: our week-long user's guide to education continues as we take an in-depth look into the world of financial aid. this is critical for families. everything from eligibility requirements to obtaining the right loans and scholarships,

free money to afford the school of your dreams, navigating those nuances will help you get the best aid package possible. joining me now, founder and executive director for turning point u.s.a. and cal cheney, president of campus consultants and daughter of the book paying for college without growing -- going broke. so, packed with that green stuff. thank you for coming on. will start with you. hourly should you start? >> for financial aid planning most people wait until senior year. and believe you want to get the most money, you want to start with a student is in ninth to tenth grade to understand how your finances fate and more importantly what adjustments you might make to increase eligibility. that is the short-term, but even longer term or you place your college nest egg can affect your a down the road several years. gerri: the kids of the parent's name? >> if you want to have any of qualifying for need a state you want to have the funds in the

parents' name, and that would include five to nine plants owned by the parents because parent assets, a maximum of about five and a half. student assets have a permanent aspect. gerri: to you hear that? put the money in your name, not the kid's name. if you put it in the kid's name the college is going to take more of your demo. i want to turn to you. you have a fascinating story. one of those people out there, one of those in people, 19? you have not gotten a degree. you are still working on it. in not doing it full time. tell us about the decision making that you made about how to get that degree incline. >> that's correct. when i graduate high-school, people were pressuring me to get started traditional for university. i felt personally that i could still go part-time at a community college, use the ap credit i accumulated in the school and go towards something

unleavened have a passion for. i started the organization turning point u.s.a. and drove all across the country starting groups talking about economics and free markets which is why love and have a passion for a. of stability of my degree, graduate debt-free, and getting a once-in-a-lifetime experience drought traveling the country. if this seems a young people take on this massive debt and did not know what they want to do. personally, did what i love and have a passion for and a lot of young people could use that as a model. gerri: i stopped as i have been out of high school for 15 months. you kidding me? he seems a mature. you will graduate with no debt. that is a good news story because it's something that so few college students know about these days. to you. i think two-thirds of students out there have college loans. they're not getting a free ride. it will have to pay some of this pack. problem loans, federal loans, obviously they're very expensive. were the best federal loans?

>> the perkins and the subsidized stafford. yet this by filling out the form they are need-based loans. you have to demonstrate need. as a the best loans because of the student is in school there is no interest charged to the student graduates. after that there is the unsubsidized stafford loan which virtually all students can qualify. of that loan they charge interest to the students while the student is in school. gerri: go this subsidized path. it makes more sense. you know, i was one of those were steady kids. i was slinging national lunchroom, a girl that ended your trade. i got paid for that. the problem that they don't want to work while in school these days. >> you're absolutely right. and good for you. so many kids that i talked to think that going to a party or being in a fraternity is work. that is not the way it should

work. college is a very unique opportunity, especially if you get the federal loans. use that can accumulate extra money. college and universities are looking for more people to be are a or a tour guide, something that can help you work your way through college. so many kids burst that off, but they have to pay that off plus -- plus interest. gerri: people put off getting married, but of raising kids, but up buying a house. your life starts a decade later more all because of this college debt. a lot of people ride the e-mails and a like amount get the free money? where of the scholarships? and know they are out there. it's true or false? >> that is somewhat false. the myth is you look for these loans scholarships. you're real key is focusing on how to present your case of the you maximize federal grants, state grants, is to show rent money. that is much more plentiful as

well as works for jobs would still not impact your eligibility compared to regular jobs. they find at, do not have a chilling effect. and then the subsidized loans such as the stafford loan. gerri: one of the things that makes sense is look for the locals call ships, the local free money, a chamber of commerce. giving away money, and no. better chance of getting that in some of the big scholarships, thousands of kids are competing. this has been a great conversation. get that degree, my friend. gerri: finding the right aid package. getting the most bang for your buck. in tonight's top five the worst colleges according to forbes. miami gardens. it costs about $116,000 to

attend. thirty years down the road forbes says he will only make back about 2,000. most of the 1600's students major in social work in psychology, not making a lot of dough. number four, my old college in fairfield, alabama cost one in $92,000 to attend and a negative return under investment is a right to top $176,000. tuition for this college is more than 1,202,000 for four years. forbes calculates the return on investment,-$167,000. number two, valley court -- valley george christian college. the mature -- majority of students major in religious studies, not normally and high-paying field hands and-$178,000 return on their investment down the road. the number one worst school for your return on investment, the arts institute in pittsburgh. unless you are rembrandt, my friends, you are not making it

big in the our world. it is going to be difficult for you to pay back more than $155,000 education. of 30-year return on investment investment,-$228,000. can you believe that? coupes that? the best return on investment, go to harvey mudd college. as people make a ton of dough. still to come, my "2 cents more." next, after months of predicting apples demise, is it really the best ever? we will tell you. stay with us.

gerri: every woody was to get there hands on the iphone five yes, but is it really that good? answers coming up.

♪ gerri: apple unveiling the much anticipated iphone 5s last week. i have to tell you, people are saying it as stellar new features. some are saying it is a game changer. is it worth all the money? joining me now, editor in chief of national. here is what blew me away and the reason we are doing this segment. a famous guy in the "wall street journal" today said it is the best smart phone out there, full stop. it is like apple took out a full-page ad. it was a rave review. do you agree? >> it was a bold statement. obviously spent some time. they have done something cool. you know, i think that it is hard to now define the best overall smart far and the market. i see this divergence in approach between what apple and

sensing in particular is doing. if you want to talk about the two are really competing head-to-head, you have the 5s, the galaxy s4. here is something that is interesting. apple has internalized the interface -- innovation. samsung's always backing in more features. in fact, the samsung galaxy as for will watch you. gerri: and not sure i like that. >> it does eye-popping. not always things that consumers like i wish the phone would watch me. so apple's approach is to understand the consumer. gerri: understand the consumer. iphone 5s is the fingerprint technology that people are starting to tell me they are worried about, this concern. apple has my thumb print. apple confined me anywhere anyhow in the who and reported to the federal. it is like the nsa watching over your shoulder.

gerri: all the information is encrypted. they do in cribs the data. they're not taking pictures of your fingerprint. they're actually doing a definition of your fingerprint and storing it in a hardware layer which is the only way to do securities so that it is not floating out there in space. i have tried it out, and it actually works. it is really cool off. it is not invasive. a lot of times you see fingerprint readers on devices and they look bad. you're robbing your finger and rubbing your finger. this doesn't work. i just tried this over and over again. it looks like the little humbug networked. gerri: what does he like? >> i always liked the vote -- design. this looks exactly the same. same size, same way, same dimensions. it's not a bigger screen. i love the fingerprint reader. the camera is really quite a bit in advance. it is now almost like an slr.

it has burst mode. that means hold 20 shots. a loss of pick up the best shots for you. and slow mommy's is where you think. you can slow down the video, and these things work like a charm partly because inside of it is a more powerful chips west as a low-budget stuff. gerri: we appreciate your bringing its u.s. thank you for coming on. great to see. we will be right back. thank you orville and wilbur...

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gerri: finally tonight if there is one sure sign it is not working, we got it today from the federal reserve no less. the feds said we will keep the stimulus going, if they don't they say the economy will tank. we talked about this earlier in the show is one of the best fed watchers in the business.

the fed's decision sent stocks screaming higher over 60 stocks on the s&p 500 hit all-time highs today. the stimulus has just juiced stock prices. great for the few individual investors in the stock market but useless for the rest of us. the fed manipulation of interest rates is wrecking a fragile housing recovery. new housing numbers came in weaker than expected today and we know how the job owning is causing mortgage rates to skyrocket scaring the daylights out of potential homebuyers. tackling issues in the fall the better start getting things right because so far this demonstration's recipe for economic success has been a failure. that is my two cents more. come out tomorrow part of the users guide to education to investigate-graduate and still have the right qualifications to land a job. we're talking one year degrees.

thank you for joining us, have a good night. we will see you right back here tomorrow. lou: good evening, everybody. president obama not the only one in washington, d.c., leading from behind. conservative republicans in the house are also doing so but arguably more effectively. those republicans have succeeded and leading house speaker john boehner to declare a renewed effort to defund obamacare. those same conservatives reminding their caucus of their commitment to fiscal responsibility and limited government while infusing the republican leadership with backbone and energy. john boehner's abrupt reversal coming just days after his initial effort to compromise