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Sunday, June 01, 2008

Guest Post: The State of the Union

[The following post was written by a relatively new reader. I welcome participation from readers of this blog who would like to post on an Orthonomic subject. I'm looking forward to a follow up post from qsman. Your comments will help develop the subject(s) for future posts].

Greetings all, and thank you SephardiLady for inviting this guest post. This is more of a stream of consciousness as I put thought to paper….. I am the head of a "tuition committee" in an out-of-town community, and was asked to comment on the "State of the Union." The views expressed are my personal ones and do not necessarily reflect those of the school that I affiliate with. I am not employed by the school, but am a regular layperson who was "volunteered" into this position by the board president.

We're now heading into "the season", in which we process the "tuition reduction" applications. This is not a fun job, and not only do we have to read about the various tzoros that people have, we also have to work through the various appeals that come through. I am rather appalled to read in various blogs about the alleged abusive treatment that parents suffer when dealing with the "committees." While we go to great lengths to treat each parent with dignity, it is understandable that it's a very high stress situation and parents may not always like the answer that is given. I think people feel that tuition reduction is an ENTITLEMENT as opposed to something they need to qualify for.

The biggest issue I have seen with the applications we get is that people are into debt way over their heads. Some people just don't earn enough, whether because of lack of mazel, in an area that does not pay well, or r"l sickness. Others earn in the 6 digits but have large families of 10 or more.

But perhaps the biggest problem is that people do not seem to know how to budget. Their line-item balance sheet is a mess, and quite honestly some of them can't figure out how they got there in the first place. Credit card debt of $100K + is not uncommon. Many people blame tuition, but when I see you in the local supermarket hauling things off shelves that would be much cheaper elsewhere, why complain? Yes, you don't have the time, but neither do I. Why did you buy that 2008 Honda Odyssey when the local used car dealer sells 2005 Siennas for less? Very few people have written down that they have approached their accountant or a debt help agency to help them figure a way out of the mess. I'm not going to get into the bounced check epidemics right now either.

Those who own and operate their own businesses are *sometimes* just as clueless – you're supporting a family of 17 on $15K/year???? (exaggerated, but you get the idea).

Another item that creeps in is the need to support kids in kollel. Why that has precedence over educating your own kids is beyond me. They should get $1000/month and you want to pay us $250/mo? 'nuff said

The "next generation" will be interesting. Many of these younger couples purchased homes at the height of the real-estate frenzy several years ago, and received down payments and other assistance from their families (as opposed to the good old-fashioned saving for a few years). This still leaves them with a rather large payment of $2000-$3200, plus whatever new cars were bought, etc. Let's see what happens as this generation begins sending their kids to school, and the parent's support has dried up due to the economy. Over the past year we've had to deal with several parents in danger of foreclosure as they simply could not keep up.

I think all families are struggling with daily living, but some cope better than others. I use Quicken, and there are several FREE websites such as http://www.mint.com/ and http://www.wesabe.com/ that do a very nice job of helping people track their expenses. Don't write a check by just calling the bank and checking your balance!!!!!

Oh, and take a vacation!!! Martyring yourself by saying you have not taken a vacation in 5 years IMHO is unwarranted. While flying everyone to Orlando for a week at Disney may not be judged to favorably, there is nothing wrong with going to a local vacation spot for a couple of days, either with the family or more important, if you can manage it WITHOUT the kids so that you have a chance to have an entire uninterrupted conversation or 2 with your spouse. it would help with the shalom bayis issues that no doubt lie underneath the stressful financial situations that many people find themselves in.

The above sounds like all gloom and doom, but on the very positive side we have many parents who are in control of their finances. We've even had a few contact us during the year when they experienced a nice increase in salary and wanted to have their tuition adjusted. We've also get 100% full tuition from others, including some who feel that's it's their obligation to do so even though they would qualify for a reduction. It's people like these that I feel we should strive to emulate.

Comments are invited, and would probably form the basis for any followup posting.

149 comments:

Anonymous said...

I have one question.
On what basis is the price for tuition?
Here the high school is over $13,000, which does not include room and board, yet, the seminar in Lakewood charges $10000.00 including room and board.
I asked the school for their budget if they want to se mine. So far, no response.
PS I paid over $50,000 last year, and I have the right to see where they spend it.
Also, if I have to support my married children because that is what the schools teach us to do, then I have the full right to include that in my expenses.

Jameel @ The Muqata said...

hey should get $1000K/month and you want to pay us $250/mo? 'nuff said

Did you really mean $1000K per month ($1,000,000)?

SephardiLady said...

Jameel, I made the correction.

Lion of Zion said...

QSMAN:

thanks for the interesting post.

1) is there a point at which parents have just been so irresponsible in bringing them to them their current situation and you say enough is enough, it's not fair to help you out.

2) do you tell people living in houses that you won't help them out unless they move into something half the size and on a less-desirable block. (this assume they have some minimal equity in the house.)

3) how does a tuition committee deal with the fact that people are less than honest when declaring their income and assets.

4) what types of expenditures raise red flags that make a normally-deserving family ineligible?

Lion of Zion said...
This comment has been removed by the author.
Lion of Zion said...

ANON:

"Here the high school is over $13,000, which does not include room and board, yet, the seminar in Lakewood charges $10000.00 including room and board."

comparing schools is like comparing apples and oranges. without giving more specific information (location, specific hashkafah, etc.) it is impossible to answer the question you ask. for example, you shouldn't need an exaplnation as to why ramaz is 3 times more than lakewood.

and then, even all things being equal, some schools are just luckier than others in having better benefactors.

Lion of Zion said...
This comment has been removed by the author.
Lion of Zion said...

SEPHARDI LADY:

have you been following the shulamith case in brooklyn? fwiu some parents are now suing the school to open the books, arguing that financial mismanagement has led to the current crisis. it will be interesting to see how it plays out.

Dave said...

I agree, the schools books need to be open.

The bigger problem is that people have no idea how to manage their money.

Step 1: Figure out what you spend money on. For one month, simply track every household expenditure.

(As an aside, I knew one fellow who did this and stopped smoking and drinking immediately, simply because he looked at the cost).

Step 2: Once you know what you are spending money on, odds are good that you are actually spending more than comes in. I know I was when I did this. Now is the time to prioritize.

No more credit card expenditures unless you are immediately paying them off (i.e. using the credit card for either the rebate, or to purchase something online or through some other mechanism that only takes a credit card) unless an emergency arises that exceeds your savings. Which is why you need to build your savings. Budget savings first. And that means retirement savings and liquid cash on hand.

Differentiate between needs and wants. Put them in priority. If your needs exceed your income, you need a bigger income or to somehow downsize. If your wants exceed your income, you are normal.

3. Track expenditures in real time. I use an Excel spreadsheat I set up, that tracks everything, provides a summary page, and lets me keep track of all household expenses (including the parts of it market "Personal money" so that everyone has money they control).

Double check your bank status online to be sure that you haven't missed anything -- this will also alert you to fraud quickly.

I think you will find that when you are tracking everything as cash, you are more aware of what you spend, more careful about what you spend, and less likely to spend frivolously.

Dave said...

(Sigh, "marked" even.)

Ezzie said...

fwiu some parents are now suing the school to open the books, arguing that financial mismanagement has led to the current crisis. it will be interesting to see how it plays out.

Halevai all schools had open books.

Great post... and I just want to add that Mint.com is a GREAT site. Just started using it, it's really something.

Dave said...

3) how does a tuition committee deal with the fact that people are less than honest when declaring their income and assets.

While I'm not QSMAN, I would put very prominently in any applications something along the lines of:

"Anyone who is determined to have deliberately hidden income or assets in an attempt to get tuition reductions will be deemed to have defrauded the school.

After that school year, their children will no longer be welcome at this school under any circumstances."

((If it were just the parents, I'd personally boot them immediately, but I'd balance things out and let the children finish the year because they are the biggest victims otherwise))

Anonymous said...

Should both parents be required to work in order to receive tuition reduction? Are families where both parents work viewed more favorably than those where only one parent works?

Anonymous said...

For anyone with a serious debt problem who really wants to do something about it:

http://www.debtorsanonymous.org

I know a number of frum families for which it has made a huge difference.

ProfK said...

I have to agree that comparing schools only by tuition charged won't let you know what you are paying for. Size of student body, special programs provided, cost to maintain and run physical plant, salaries, teacher qualifications etc. will make a difference. But transparency is a must no matter what school is being looked at.

Slightly off the topic but still a part of it is family size. Those in my age group simply did not have families anywhere near as large as the families today. Should we not only be encouraging such large families but actually mandating and rewarding them when they cannot afford basic expenses? Multiply 8-15 kids times yearly tuition and you get a required sum of money that would flummox the wealthy, never mind anyone who is not. Now add in all the other expenses necessary for such a large family. Not luxuries but necessities.

An attorney in our area is making in the $400 thousand range (subject to alternative minimum tax) and has 5 kids. He and his wife follow a strict budget because yeshivas, camps, Israel and weddings take a huge chunk. And then there is savings for retirement. If he has to budget carefully, what can we say about those who make 1/4 of his salary and have twice to three times the number of kids?

SephardiLady said...

Lion of Zion-I have been reading the reports regarding the lawsuit against Shulamis and do hope to comment on it soon. I need to read more formulate my thoughts since I don't live in NY and am not familiar with this school. However, I have to hand it to the parents for not sitting back while the school is sold to an unnamed buyer. The books should be opened and I see no excuse for secrecy.

SephardiLady said...

ProfK-I don't think your question is AT ALL off topic. The subject isn't a "nice" one to approach, but I am willing to open up the topic soon since it is a major part of the tuition discussion.

qsman said...

Anonymous - Note that I said I'm out of town. I am not going to disclose where that is in this forum (However I did provide my "credentials" to the blog owner offline). Not all schools & parents subscribe to the kollel theory.

Jameel - thank you

Lion of Zion-
1) Depends on circumstances, but yes we will.

2) In today's market, thats not usually an option. We have held to that point when appeals are made. I'm also upset at less-than=scrupulous people in the industry that may of contributed to their unfortunate situation in the first place

3) I didn't want to go there in the initial post, but since you ask, the committee and I have been able to ferret out people like this, and they are told 100% full tuition, don't bother filling out the paperwork next year. What twigs this investigation is line items on a tax return that don't seem right (or intuition), followed by investigation of various public records. My spouse tells me I should work for the FBI. This happens more often than you think.

4) Flying everyone to Israel during peak seasons. Purchase of a 2008 Honda Odyssey XLT (or a 2 door/2 seater sports car). Additions? Depends. I personally don't have an issue if someone with 5/6 kids needs to expand to get space. A family of 3 putting on an entire second floor would be another story. We try to take a holostic view.

I do agree with the concept of opening the books, but I believe the schools don't have to open their books because IRS regulations don't require it, unlike other non-profits. I CAN tell you that for our school, it took us 5 hours over 2 meetings to go through the budget. We have several accountants on the board, and believe me we try to be as lean as possible, with a lot of questioning. Just because the schools don't want to show their books doesn't mean they are hiding things. Unless you have specific examples of fraud or waste, just calling up the school and whining won't get you anywhere.While we are not perfect, there is definitely a sense of being responsible with mammon hekdesh and other people's hard earned funds.

Dave - 100% right, I have applied that theory to myself and have basically eliminated my credit card debt.

Halevai, check out www.clarkhoward.com and his syndicated radio show.

Anonymous said...

I have a question for the guest poster. I bought a house less expensive than ANYBODY in my neighborhood. We have no car payments because we drive older paid-for cars. Since the average car payment is above $450/month, we take that money and fully fund both of our Roth IRAs ($10k/year), and since we pay less for our house, fully fund college accounts ($6k/year). Now, if we filled out a request for aid, would we be denied since our money is going into savings and not "stuff"? How do you choose who to help? Shouldn't somebody in a small house who is saving for the future be just as deserving of help as someone in a large house who is not saving?

I ask because I keep seeing posts that say retirement savings is usser if you ask for tuition assistance, but I never see anything saying you should move to a smaller house.

ProfK said...

A friend told me an interesting anecdote regarding the saving for retirement is ossur question. When she asked her rav whether she could put money into her 401K even if she had to pay less for tuition he told her no, tuition comes first. Then she told him that her company has a match for the 401K--they put in 5% if you put in at least 5% of salary. But if you don't contribute they don't put in the extra 5%. She would be earning 5% less if she did not save for retirement. The rav told her that was a different story. You are not required to lose money in order to pay full tuition. I don't know what the logic behind the decision was but that was the answer she got.

DAG said...

Religous schools do not need to publish their 990's...BUT, they can....and we a sa community should demand it as a preq to ANY donation

SephardiLady said...

Should both parents be required to work in order to receive tuition reduction? Are families where both parents work viewed more favorably than those where only one parent works?

To add on to this question, would a school ever ask a mother/ father to quit working (or learning) or even change working hours, if it is quite obvious that the costs of day care + camp + associated costs of working are eating in the primary income earners parnasah?

SephardiLady said...

Now, if we filled out a request for aid, would we be denied since our money is going into savings and not "stuff"?

I think this is an excellent question.

I know a number of "next generation" people who have a payment for everything. They have large mortgages, car payments, and student loan payments that rival our mortgage. Their shopping habits leave what to be desired and used in not in their vocabulary.

On the flip side are those that make a similiar income, but didn't jump into the family house without a few stops along the way, bought used cars and drive them into the ground, and went to public college. Their kids wear hand me downs, they save meat/poultry for Shabbat, and they shop the circulars.

The former likely has no savings, and perhaps is working themselves into CC debt that could reach $100,000 years down the road. The latter has made sure to put together an emergency fund, retirement savings, and perhaps other types of savings too. Both have the same cash inflow, but the outflow is vastly different.

If the person with savings is told that they should not be savings, how can we expect people to establish healthy budgets early on, if as a friend of mine says "we will all end up in the same boat anyways?"

SephardiLady said...

qsman,

Can you talk a bit about how much cash grandparents are pumping into the current generation? In other words, is the current generation mostly holding themselves up, or are we being heavily supported?

You mentioned extreme amounts of credit card debt. Does the average day school/yeshiva family carry credit card debt?

More state of the union questions: do couples that start off in kollel end up significantly behind their counterparts in their ability to shoulder tuition? Do they carry more debt or less?

OK-I'm obviously interested in the "State of the Union" and I'm enjoying being a commentor rather than the author!

Mike S. said...

Qsman:

Do you have published standards for what you expect parents asking for reductions to contribute, or is each case unique? I know one thing my friends getting aid found frustrating is never knowing what the standards they were being judged by were.

One thing I found very frustrating, as a parent who scrimped to pay full tuition (now approaching a cumulative total of $750,000K,) was teachers and administrators teasing my kids about riding in 15 year old cars. And friends, who were happy to tell me how much aid they were getting, putting on bar/bat mitzvahs on a scale that made my kids envious.

With no published standards it is hard to tell if my friends were taking undue advantage, or I was being a sucker. Nor is this a new phenomenon--I remember an older relative telling me a story dating back 40+ years now, of how a loose-toungued committee member mentioned that they were giving a break to a mutual acquaintance "because he only makes XX$," which was a figure about 15% more than my relative, who was paying full tuition was earning.

Dave said...

If the person with savings is told that they should not be savings, how can we expect people to establish healthy budgets early on, if as a friend of mine says "we will all end up in the same boat anyways?"

Exactly! If you punish people for behaving responsibly, and reward people for spending frivolously, you are creating the tsunami that is about to sweep ashore.

Lion of Zion said...

MIKE S.:

"teachers and administrators teasing my kids about riding in 15 year old cars."

i have a lot to say about this post and the comments but no time. but i do feel compelled to note that the story you tell is simply disgusting. i hope you complained.

Lion of Zion said...

MIKE:

(p.s. and i think we've been down the "sucker" business before)

Dave said...

Transparency, transparency, transparency.

The standards that are applied for tuition discounts should be public, understandable by mere mortals, and followed.

That way, you can avoid issues of favoritism or nepotism, and can avoid the cases given above, where the people who act responsibly are punished.

For that matter, if there is a flaw in the way the rules were designed, making them public makes it much more likely that it will be brought to the attention of the school early.

Anonymous said...

Thanks for recomending mint.com. It looks great - unfortunately, we cannot take advantage because we live in Israel and do all our banking here. Can anyone recommend a similar program that works with the Israeli banks? Hebrew language not a problem. I've seen links on our bank site for Chashvashevet (sp?), but have not figured out how to work it.

I'd be interested in hearing similar discussions about the school/yeshiva systems here in Israel too.

ProfK said...

Sefardi Lady, re how much are the grandparents putting into their children and their grandchildren's schools, I know for a fact that some schools require that anyone applying for aid must also give their parents' financial information. Frankly, this puts an unfair burden on my generation. It is one thing when parents, quite naturally, want to help out their children here and there with limited gifts or loans. It is quite another thing when a school makes it a requirement that grandparents contribute to tuition. It is probably what started the whole "it is ossur to save for retirement or to retire" nonsense. Nor does it take into consideration that grandparents may already be supporting their children in paying basic expenses for living. Nor does it take into consideration the point I raised before--the average number of children in my generation was 3. My children's generation has an average of 5-8 and more. Where grandparents may have been able to support fully their 3 children, how is that money supposed to stretch to cover expenses for 15-21 grandchildren?

SephardiLady said...

ProfK-Couldn't agree with you more that this is an unfair burden. I'm just trying to get a picture of how much grandparents are already giving. At least where I live I'm told it is practically minhag hamakom for grandparents to be paying and/or helping with tuition. It would be one thing if the current generation was posed to do this with their own kids, but they aren't.

And, like I say. How can I expect my husband's parents to pay for (currently) 3 times as many children as they had (soon to by 4 times more, I'm sure) when they had to take a loan to finish up high school themselves?

qsman said...

I'll do my best to respond to the next set of questions, remember the disclaimer above.

Right off the bat, the school will **NEVER** tell people what to do. We mention our basis for the decision based on the facts listed in the application if the parents appeal the decision (and they have the opportunity to prepare a rebuttal). Ultimately, it is up the family to make their decisions.

Anon @ 8:01
We generally do not penalize for retirement savings. Then again, I don't know what your savings/income ratio is, how many kids you have, etc. so there are other variables. I don't see why you would not be considered eligible for a reduction. I've never seen or dealt with the college savings scenario, I honestly cannot answer how that would factor into the equation. I could taaneh that the savings fund is eligible for higher education, including high school (I think), therefore you should parially fund from there. On the other hand, maybe not becasue you may not be in a position to be eligible for Pell grants or other scholarships.

However I WOULD ask in that case is the majority of your charity dollars going to Kupat of the Month club or your local school? (subject of another post! SephardiLady, take note)

DAG - I agree. The question is how to get that to happen, and in the meantime to instill a sense of trust with the parent body.

SephardiLady - Both parents working - cost of daycare (and maybe a weekly cleaning service?) would be taken into consideration since they are probably both out of the home to support themselves. One working parent while the other is home caring for a baby is also fair. However we have a hard time with a situation where all kids are out of the house M-F for 1/2 day or more - barring unfortunate circumstances or sickness r"l - why the spouse cannot obtain employment - not only are they contributing, but it shows a good-faith effort in meeting their obligations.

I'll lump grandparents and parents together. Quite a few couples are being supported, I don't have a good handle on it yet as these are first starting to come through the system. This year should provide additional insight. Based on a conversation I had with someone involved in real estate transactions, it would seem that most current purchases are being done with a significant amount of assistance.

Yes, most yeshiva families who apply have credit card debt, as low as $10K and as high as $130K

Kollel couples do wind up behind their counterparts, at least when they are first starting out. They ARE in debt, but I cannot come up with a statistical figure off the top of my head. Their demographics though are somewhat different since they are eligible for subsidized housing, WIC, parsonage (in some cases) which changes the picture. Given their income levels, I would postulate that a greater percentage of their earnings are going towards tuition.

Anonymous said...

Do you offer teachers and other staff members in your school free (or reduced) tuition for their kids? Are the teacher’s responsible to pay for the dinner, building fund, script, and other "non-tuition" expenses? In our school STAFF MEMBERS receive a number of free tuitions and are not responsible for the extras. So when the school increases tuition by 10-15% a year the teachers, essentially, receive this as a raise. Tuition increases have outpaced inflation by about 1000 times over the last 10 years.

Anonymous said...

If you punish people for behaving responsibly, and reward people for spending frivolously,

I don't think the tuition committees are or should be in the business of education families on fiscal responsibility.

Though clearly there is MUCH room for education in this area, I have no idea how it should be achieved. What we need is a frum Dave Ramsey to slap people upside the head and say "You can not afford that!"

What I want to know is what happens when the parents and tuition committee cannot (not will not, cannot) meet on the issue of what a family will pay?

I know how much is coming in and going out of my monthly budget. My largest expenses are fixed with little wiggle room, mortgage, utilities (we are frugal on utilities), credit card payments, food, tuition. If I do not have the money, I can not pay.

Having gone the credit card route I have reached a point where I simply refuse to borrow money. Even to send my kids to day school.

And what if the school simply CANNOT give me any more assistance? Their supply is not endless either.

Is there ever a point at which the parents say I simply cannot afford this anymore? Occasionally I read a comment like "the whole system is going to implode" but will it really?

At a certain point people who cannot afford it will have to stop sending their kids, won't they?

To put it another way, faced with the decision of "saving a Jewish neshamah" from the apparent evil of sending a frum kid to public school, who will step up to the plate? And what if the parents can't? What if the school can't???

Tamiri said...

The above happened to us when our eldest was going into 12th grade. We could not pay what the school billed us and we came to an impasse. They would not budge and we could not come up with any more - we did not have parental support or any magic money trees in the back yard. We signed that son up for the local public HS and requested that his transcripts be sent from the Day School to the PS HS. A miracle happened, the Day School principal intervened, and lo and behold, they met our needs. We did not beg or grovel, we just did what had to be done, which was get the kid a HS diploma.
We never did get the point of the school's exercise in trying to get more money where none existed.

Dave said...

I don't think the tuition committees are or should be in the business of education families on fiscal responsibility.

Someone has to.

But to put it more seriously, if the tuition committees are giving tuition breaks to families who need them because they are living far beyond their means, and deny them to families who are living modestly and spending wisely, then they *are* educating the frum community on budgeting.

But what they are teaching is that there is no point in doing the right thing, because that gets punished, while the people who spend their money on anything they feel like (and then some) are rewarded by having their tuition subsidized by the people who are living within their means.

And that is a bad lesson.

To put it another way, faced
with the decision of "saving a Jewish neshamah" from the apparent evil of sending a frum kid to public school, who will step up to the plate? And what if the parents can't? What if the school can't???


Then the kid is headed to public schools. If the money isn't there, then the money isn't there. The issue of categorizing wants and needs isn't limited to the individual families alone.

qsman said...

Mike, sorry I missed your question. No we don't becasue if we did everyone would "conform" :). It's really on a case-by-case basis, which is why it takes all summer to get through them.

There are some published models in the Christian private school arena, but they don't have the unique costs of a Jewish lifestyle

qsman said...

Tamari's RESOLUTION experience is fairly accurate across most schools I would imagine. Not sure what her board's experience has been with dealing with parents in that situation. Usually a combination of outside funds & negotiation helps address the problem.

Anonymous said...

As an FYI, college savings accounts (Coverdell ESAs) will likely no longer be eligible for parochial school tuition. Usage of these accounts for primary and secondary school was a feature of the eeeevil Bush Tax cuts of 2001, and the Democrats have promised that they will not renew these tax cuts that only benefit the rich...

I would try saving in a non tax-advantaged account for high school, but Dems are planning to almost double the taxes on my brokerage account as well because only rich people save for the future...

Anonymous said...

tuition is set very high - forcing people to beg for scholarships

in bergen county, NJ elementary scholl tuition - including add-on is $14,000 to $15,000 per year

high school is $20,000 to $25,000 per year

when I hear lakewood people whine about $8,000 tuitions - I am not impressed

the only solution is charter schools - with ncsy and torah classes in the afternoon

or for the government to pay for the general studies program

Anonymous said...


Anonymous said...
tuition is set very high - forcing people to beg for scholarships


What about the major point in the post that we haven't talked about. Shouldn't people be budgeting for yeshiva tuition, rather than assuming that they will receive a scholarship when the time comes, or that G-d will provide? For example, you pay for arba minim. You pay for food for shabbos. They are part of your budget and they are part of living as a Torah Jew. Why is it expected that a school will give a hand out when costs get too high?

ProfK said...

Anonymous, you are right that people should be budgeting for tuition but your examples aren't comparable. The day that arba minim equals the cost of 3 or 4 yeshiva tuitions is the day that people will not be buying them, or they will do what small communities with lots of poor jews did in Europe--the shul bought one set and everyone took a turn. Food for shabbos--you are going to have to eat regardless of whether it is Shabbos or not--non-Jews don't skip eating on Friday night and on Saturday. The difference between a "regular" meal and what we do eat on Shabbos is the added expense. Again, when that added expense equals a school tuition or two then people are going to be opening cans of tuna instead. Budgeting for challah is fairly easy; budgeting for tuition is not only more difficult but even with the budgeting there is no guaruntee that the money can be found.

Anonymous said...

prof K is obviously correct

but the reply was a waste of time - people who make comments about arba minim that cost $50 or a shabbos meal really need an economics 101 course. The cost of Arba Minim would pay for about 1/2 day of my son's yeshiva tuition.

Yeshiva tuition forces middle class and upper middle class people to buy an education that in the general population is only paid for by the wealthy

if you are middle class or poor - you can be frum - but you can not be modern orthodox - which is a religion only for the wealthy

that should be a post in an of itself

modern orthodoxy a religion for the wealty and chareidi orthodoxy - which even the poorest chasidim can belong (tuitions of $1000/year)

Anonymous said...

Prof K, you are correct that the scale is completely different, but the principle is not. If you want to educate your children the way you feel is best based on your hashkafa, then you have to budget. Don't wait for a hand out. No parent is entitled to a Jewish education. The gemara is specific that it is a parent's responsibility to provide for that. So why are so many people assuming that they will receive a scholarship when the time comes, or that G-d will provide? My criticism is that for some reason, people can handle the little things, but they want someone else to take care of the big things. The school/community/G-d doesn't owe you anything. The only person to whom something is owed is your child, and you are the person required to provide. I think people need to keep that in mind.

Scraps said...

or for the government to pay for the general studies program

Not going to happen--it's already been struck down by the U.S. Supreme Court as unconstitutional decades ago. See the following:
http://en.wikipedia.org/wiki/Lemon_v._Kurtzman

Anonymous said...

Government paying for general studies is the norm in the UK and France

if it were not for the bigoted nativist Blaine Amendments - we would have it here as well

and to the anon who thinks parents should be expected to pay $15,000 per year for elementary school and $25,000 per year for high school and expect no help from the community when the median HH income in the wealthiest counties in the U.S. is $100,000 - do the math

for three kids (1 in HS - 2 in elementary school that is $55,000 - which is what you get after taxes on $100,000 - now what about food shelter , clothing etc.)

and what if you have 4 or 5 kids or have more in high school ?

So according to the Anon - if you do not earn $250,000 to $300,000 per year you can not be frum

once again - I suggest you take economics 101 - because your comments are not based on reality - your comments are emotionally based - it almost sounds like you are a yeshiva administrator

Remember 60 years ago most orthodox children went to public school and my prediction is that in 20 to 30 years most orthodox children will be attending public school

JS said...

qsman,

Thank you for the great post - I hope there will be a followup. I was hoping you could provide the following information:

1) What percentage of families ask for aid?

2) What documents or information are they asked to provide beyond tax returns?

3) If money cannot be found/given to a family, what options are they provided with? Are they told to take money out of their house? To take on credit card debt?

4) Do you think it would be better to lower tuition and offer less aid thereby encouraging more to pay full tuition?

5) Has there been any general trends you've seen year to year? For example, more people asking for aid, more people in debt, more "bad debt", etc?

6) Is it usually the same people asking year to year? Is this because of intractable problems, poor decision making, or both?

7) Do you think the community/ yeshiva should subsidize people who either make poor decisions or create scenarios that make them dependent upon aid (e.g., having many children but having a limited income stream)?

8) Lastly, do you think it should be required that people see a debt consultant or financial advisor as a requirement to receiving aid?

Anonymous said...

JS

you ask excellent questions

however, the last one about requiring a financial consultation works only for people who can't manage their finances

if an orthodox jew were to go to a financial planner and say that he earned $120,000 per year - (which is in the top 5% of the U.S. income scale) and had normal expenses of living in the tr-state area and that he sent his kids to a private school that charged $15,000 to $25,000 per year - the first thing the fin. consultant would say is that you can not afford private school tuition - send the children to the good public school in your town.

very few people earn $500,000 a year and blow all their money and that is why they can not pay tuition - most people simply do not earn enough to cover basic costs and tuition

the famous cliche - "its the economy stupid"

applies to orthodox jews as

"its the yeshiva tuition stupid"

JS said...

anonymous,

Of course, I agree with you. The debt consultant/ financial adviser question was mostly directed to those people with poor money management skills, credit card debt, out of control budgets (for reasons other than tuition), etc.

However, I do think most people could stand to benefit from such a professional's help - maybe they could help the family prioritize saving or finding tax breaks.

However, your statements neglect one factor: savings! Yeshiva need not necessarily be paid out of annual income, it can also (in an ideal world at least) be paid out of money specifically saved for tuition. Many families at least try to save for their children's college tuition or for a house. Don't get me wrong, I think tuition costs are astronomical, but it seems like few people even try to save for such an expense.

Which brings me to another question, should parents be saving for kids' college tuition instead of paying yeshiva tuition? After all low interest loans are available for college but are not available for yeshiva tuition.

JS said...

anonymous,

I'll also add that most financial problems creep up over time - a small amount of debt here, not enough savings there and "suddenly" a family wakes up and they're paying several hundred/thousand dollars a month just to repay interest on credit cards or equity loans. Also, many families don't realize how precarious their financial situation is, they're making all the payments, everything is good, then something happens - a new roof or appliance is needed, a car no longer runs, a health issue arises - and suddenly a family is thrown into debt.

It's rarely a case of a family having a ton of income and just spending it all at once - even if the family has a huge income but is having trouble making ends meets it's often a problem that crept up years ago.

My in-laws are in this situation, fairly large income on paper, nearly all of it goes to debt due to many poor decisions over the years.

This is why financial advisors/ debt consultants can also be helpful even for people who don't think they're in trouble.

Mike S. said...

JS, You pay college tuition for 4 years beginning at age 18 or so, thus you can save up for far longer than you are paying. You pay day school tuition for 13 or 14 years starting at age 5, which means most of it has to come from current income.

JS said...

mike,

True. But, I think the problem is that people don't even think they SHOULD save for it. In a case where "kids" get married while still in college and have babies right away, I can see why there is no saving - not that I am justifying that behavior.

However, it's not a "surprise" that tuition must be paid. Nor are the amounts a surprise. Nor is a family all of a sudden paying $70,000+ in tuition; it ramps up.

If a family has 4 children spaced every 2 years, even if they have babies immediately, it's roughly 6 years till the 1st one is in yeshiva and 6 more years till all 4 are in school - that's 6 years of saving with no tuition expenses + 6 more years of savings without a full tuition burden.

In 6 years, I imagine most (not all) could theoretically save $5,000 a year. That's over $30,000 appreciating. At the very least money could be coming from that pot to help defray costs of tutition so its not all out of immediate income.

I think the real issue is that kids are getting married with no hopes of supporting themselves let alone a family and having babies way too soon - on top of that they're hardly saving any money, let alone saving for tuition.

JS said...

Also, I realize $30,000 isn't going to go very far in the long run of tuition payments. However, it does help, no? It does reduce the burden a bit, no? It helps families from making dumb mistakes like running up credit cards, no?

But, besides, my point was more that I have yet to a see a family that thinks people SHOULD save for tuition. The de facto opinion seems to be either a) go into debt, b) ask grandparents, or c) get tuition assistance.

ProfK said...

js,
You are theoretically correct about the saving for tuition, and yes $30,000 would be a help. But the exact same time period that you are suggesting for saving for tuition is also the time period where a young couple looks to buy a house. Any saved money usually goes towards a down payment and all the other expenses involved in the buying. You would need both parents working at the high end of salary ranges to be able to both save and to buy in the same time period.

Mike S. said...

JS--I certainly won't argue, as that is what we did. But it made a relatively minor difference.

DAG said...

I spent a short period of time on a tuition committee for a small yeshiva. What struck me the most was the reluctance to even consider full paying parents for ANY scholarship, regardless of changing circumstances, versus the desire to provide significant help to those who had NEVER paid full tuition.

I will admit that I left that place due to its extreme mismanagement.

amL said...

js- I think you're also forgetting the unbelievable cost of childcare. We have one at the JCC and one in a day school preschool and pay $2400/month. And they are 2 and 4. I would love to see your suggestion for saving for day school tuition during this period of our lives.

I think you're being completely unrealistic. If you're both working, you're paying for childcare. We sat down and looked at our salaries and had to decide if one of us should be at home or if we should both work. It turns out that both of us working is better from a financial perspective since we both make relatively good wages.

And one thing about student loans- I'm the director of admissions at a large university in the DC area and the fact is that there is not only a mortgage crisis and day school tuition crisis- there is a MAJOR student loan crisis. Lenders are backing out of the student loan business which means that graduates may not be able to consolidate loans- and if they can, they're looking at 6-8% interest, not the 3% my generation (30-somethings) is locked in at. Colleges are more expensive than ever. A couple with an infant today can expect to pay well over $100k for state school, and up to 4x more for private schools.

I am VERY concerned about families relying on student loans to get their kids through college. I don't want kids to be paying their own student loans while trying to put their own children through day school.

We're in a terrible crisis with no viable solution in sight.

Dan said...

The tuition situation is untenable long-term.

Moreover, the whole scholarship business is causing major amounts of Sinas Chinom and other unsavory type of judgemental behavior between families as evidenced in these postings.

I believe the Yeshivos do not share/disclose their scholarship "secret formulas" for two reasons: 1. It is subject to each individual case and reviewer's subjective opinion at the time of review. 2. By disclosing the "secret formula" they may aid people in scamming the system.

Other considerations are people losing their job in middle of the school year. The Yeshiva generally will not forgive that year's tuition, even if they agree to defer. Now those parents have additional outstanding balances haunting them for the next fifteen years.

Given the importance of future generations ability to earn a decent income to continue this lifestyle in perpetuity, how does one afford to send a number of children to elementary and high school while sending older children through college, all at the same time?

Unfortunately, no amount of planning or Economics 101 could help pay for this lifestyle.

tdr said...

We're in a terrible crisis with no viable solution in sight.

IMHO there is one longterm viable solution -- and that is income in the orthodox community AS A WHOLE needs to increase. This would result in an increase in the tzedakah base not to mention an increase in the ability of families to contribute to their own kids education.

As far as I know the single best bet one can put on decent future earnings is education -- specifically education that will result in a college degree.

One of my carpool kids the other day was going on and on about how "Torah is everything money is nothing." Well, it may be true that Torah is VERY significant, in fact the lynchpin of all our lives, but it is definitely NOT TRUE that money is nothing.

(I'm sure this kid's mother, who works full-time and doesn't even start cooking dinner until she comes home every night at 6 PM--major stress!--would not agree.)

However, if this is the message that children continue to get in yeshiva, as the ship sinks slowly in flames, you are right, there is no viable solution.

Ironic, isn't it? Since the message at least some talmidim come home with is that "money is nothing." Try telling that to the tuition committee.

Zach Kessin said...

I think sooner or later the conversation is going to change from "How do we afford to send the kids to private school and still pay the rent" to "Can we afford to send the kids to private school and still pay the rent?" And I think in many cases the yeshiva will loose. The community as a whole seems to be living way above it means and sooner or later that catches up to you. With the major credit crunch in the USA I am expecting that it will be sooner.

JS said...

I think we're all saying the same thing in different ways. My point was more that this is an expense that no one even thinks to plan for - the fact that it is impossible for most to plan for even if they wanted to proves the point as well.

As I mentioned above, but will reinforce now, even if a family could save $30K, it would help a bit, but not much.

However, there is something wrong with the fact that a family takes on such a monumental expense with little or no planning - or that even if they try to save it makes next to no difference in the long run.

Can you imagine if a family went to a bank with no downpayment and not enough income to make regular payments? They would be laughed out of the bank! No one would even think to do something like that when they want to buy a home.

And yet, families do the same thing every day when it comes to yeshiva tuition. I don't see how this is sustainable. If families couldn't pull money out of their houses or use credit cards, I imagine a significant number of families wouldn't be able to "afford" it.

To a certain extent I think tuition assistance just makes the problem worse by allowing families to throw themselves on the community and continue living a lifestyle they can't afford. The real problem isn't being addressed - there simply isn't the money to pay for this.

Maybe yeshivas need to act more like banks and toughen up requirements by running credit checks for example as a bank would to ensure families have the income to pay and aren't sitting on a pile of debt. Maybe yeshivas should force certain lifestyle changes for people who are living beyond their means.

Tuition assistance is like giving a man a fish instead of teaching him how to fish. It's just pumping money into a failing system.

I would bet that although the short-term effects would be difficult, the long-term effects would be beneficial as people start to live within their means knowing that the yeshiva isn't going to bail them out, or start to look at higher paying jobs and more education, or buy a smaller house, etc.

Dan said...

When you say increased income, I agree that is one possibility, however, given the current state of (un)employment and the future outlook, given H1Bs, outsourcing, etc., it is very unlikely that there will be an increase in income of the magnitude necessary to solve this problem.

Additionally, I speak from personal experience when I write that, over the last eight years and for the foreseeable future, each time one switches jobs, there is an increased likelihood of losing income not gaining income.

Also, the white male 40-70 year old in the US is now on the endangered species list as far as employment is concerned.

Affirmative action has turned the tide from discrimination of minorities to discrimination of the majority.

White males in their 40-60s need not apply.

As stated many times on many posts, what would be considered a very high middle class to low wealthy class income to the general public, is at best scraping by in the MO community.

While Halacha dictates that parents are responsible to give their children a Torah Education, nowhere is it written that it must be in a MO institution.

That being said, the dilemma we face is that of ostracizism from the community if you choose to not send to Yeshiva.

While it appears to be a conscious freewill based decision, due to peer pressure, it is not a choice at all.

If you choose alternatives to Yeshiva, you may as well as pack your bags now.

Hesh said...

"Can you imagine if a family went to a bank with no downpayment and not enough income to make regular payments? They would be laughed out of the bank! No one would even think to do something like that when they want to buy a home."

Actually, a lot of people did that in 2006-07... and they got the loans that got us into the mess. What no one wants to admit is that many members of the frum community (using legitimate business practices) made a lot of money during the real estate bubble -- what's going to replace that?

qsman said...

Sorry, I seemed to have also missed an earlier question about discounts for teachers. Most schools I am ware of will offer free or significantly reduced tuition to children of teachers as a perk - very similar to how the airline industry offers their employees the perk of non-rev travel.

I agree that the tuition situation is spiraling downward, and will be untenable if things continue this way. Keep in mind that the same financial pressures families face also apply to the schools on a much greater magnitude. Payroll has to be met, building maintenance & insurance, supplies, UTILITIES, nightly cleaning, etc. That's what we have to balance against the parental needs.

JS:
1)At least 60%
2)Tax returns speak volumes. On appeal, some parents will include copies of bills to reinforce their position, I've seen one credit report. (One parent sent in several credit card statements, but apparently didn't read them first since they included multiple foreign charges and the conversion fees were kinda steep. When questioned as to what they were doing there, the person admitted to going on vacation to this destination, which didn't help his case any.)
3)Largely depends on the circumstances, sometimes a deal is hammered out with their spiritual leader or third parties, sometimes if it's obvious there's no $$ we'll accept what we can get, sometimes we'll tell them pony up or else. The latter occurs when we have solid evidence that would "stand up in court".
4)Good question. I know the Lakewood cheder does that, and I've been told that they don't cut breaks for nobody. If anyone knows if that is working I'd like to know about it. If you don't want to post it here, I'd like to ask SephardiLady to act as go-between to keep the anonymity secure.
5)Applications rose after we raised full tuition SIGNIFICANTLY a couple of years ago. I am expecting more applications with the current energy crisis and fuel costs. Mass transit is not always a good option here.
6)Yes, we have a large number of regulars. I think the poor decision making outweighs the intractable problems - or maybe they are closely intertwined. You are correct that this is usually a result of several years of non-planning, or working minimum-wage jobs. Not their fault however when the breadwinner is diagnosed with cancer.
7)No. But the reality is that it happens. We can't dictate family size, and I'm not going to go down that path.
8)Yes, I have thought about that. Problem is finding enough people to volunteer their time to meet with a rather large applicant pool. You need someone frum (or Christian) who understands the tuition needs for private schooling. I'm open to ideas on that one. In a way laying out all the info may help them realize there's a problem (only to get stuffed in the filing cabinet until next year rolls around

I have heard of at least one tzedakah organization out there that requires this before people receive funding, but that's on a much smaller scale. If anyone reads Hamodia, you probably noticed that there is a weekly column from Mesila which deals with practial finances. www.mesila.org is in Israel, but I understand that there has been significant interest in getting something like that going over here. They don't dole out $$ but they serve as a educational role.

WannaBeChossid said...

To qsman,

Can you please address as to why school tuition is rising so much?

Case point, Fasman Yeshiva High located in Skokie IL in 1991-1994 cost 5000 a year ( $7838.48 in today's dollars, see http://www.westegg.com/inflation/)

Now it is 18k!!! What gives? why is tuition increasing so much? What costs do you see increasing on your end that would justify this kind of an increase in tuition cost?

Dave said...

Part of the problem is that much of the Frum community is adamantly opposed to the secular education necessary to get high paying jobs.

Leave the bugaboos of offshoring, outsourcing, and H1B Visas alone; if you don't have the skills and credentials to get those jobs, then the point is utterly moot for you anyway.

The other option is the one the Amish and Mennonites often use; self-supporting local communities, and when land prices get high, sell for a profit and move en masse to someplace cheaper.

Somehow I suspect that those people who think that being forced to live outside Brooklyn is a sign of disaster aren't going to move to parts of the mid-west that have effectively depopulated to frontier status.

qsman said...

Take whatever cost of living expenses have increased and apply to your local institution:

*Salaries (still needs improvement)for both staff and teachers
*Payroll taxes & expenses
*Utilities - you think your electric bill is high? Business phone lines are not cheap either.
*Maintenance contracts for cleaning, HVAC, plumbing, copiers, PBX, etc. We do have a maintenance staff and they do their best to solve internally
*Repairs on items not covered by contracts.
*Insurance - health insurance for employees, liability (how about those molestors!), property
*School books - not everything is supplied by the state, plus limudei kodesh
*Supplies, including reams of copy paper and other classroom items
*IT expenses (yes, we have some labs. We can't educate kids on 386machines with 256k RAM)

The school scrutinizes every expense, and purchases need to be justified before the funds are released.

And it gets more difficult as the checks bounce, "can you deposit it tomorrow", etc

tdr said...

How does one get to be on a tuition committee? Do you have to have credentials? Or simply time and willingness?

Dan said...

I'm sure criteria number one is that you're not an applicant :-)

Tamiri said...

aml wrote: "I am VERY concerned about families relying on student loans to get their kids through college. I don't want kids to be paying their own student loans while trying to put their own children through day school."

You are kidding, right? How do you think people can pay for their advanced degrees? It's called a loan, unless (once again) good old mom and dad kick in for tens of thousands of $$$. With these advanced degrees, which people pay for over a ten year time period, they can get good jobs and pay day-school tuition. Should people wait till the loans are paid before having kids??????

Anonymous said...

It is true that the cost of operating a day school has gone up, as have the costs of basic living, but how are people supposed to keep up with increasing tuition costs when they outpace earnings and inflation. Tuition has gone up by about 10% a year for the last 10 years when earnings have not and of course the Yeshiva NEEDS the new fancy building with the state of the art science center and new gym so they raise building funds on parents as well (in addition to raising tuition). Plus the dinner tax is more and as the cost of food goes up the script obligation goes up as well which leaves parents to choose between putting the expenses on a credit card that will get paid off "eventually" and paying tuition. It is getting out of control and in the next few years our community is going to be choosing between 1) not having kids (or having 1 or 2), paying rent, or we are going to be sending our kids to public school. This is a problem that should have been dealt with 15 years ago and I am afraid it is too late to save the Yeshiva system. The costs are non-sustainable. Many schools HAD mega donors, but these people (or their kids) moved away, the money has been split up etc. Unless we can rely on a few uber-wealthy people to support the ENTIRE system in each community there is no way to sustain it.

ProfK said...

AML,
Not the time or place to taineh about the current state of yeshivish secular education, but there is another option besides loans and mom and dad. It's called academic scholarships. And they are out there. It requires some forethought on the part of parents and students. It requires work in the secular area studies. It requires real learning. Sometimes it requires that students submit essays or papers. But it is possible to get these scholarships both before you enter college and while you are in college. There are also needs based scholarships available for those in college. If your student is no longer a deduction on your income tax and will be judged solely on his/her income they may qualify for many of these scholarships and grants.

But if you are looking for this type of financial help when a child gets to college/grad school you had better start when they are very young in inculcating the importance of secular studies and the skills necessary to be a top student, even if it is not "in style" with the child's classmates.

My kids went to "name brand" schools and not one paid the full tuition, because of scholarships they received prior to entry and because of maintaining a high GPA while in college. The same for their graduate schools. Our income would have precluded their getting needs based scholarships. I'm in the field so I knew what to look for when they applied. We need to educate parents who aren't in the know, and do it long before the money needs to be used.

Charlie Hall said...

"if it were not for the bigoted nativist Blaine Amendments - we would have it here as well "

Unlikely. 12 states never passed a Blaine amendment but none of them pay for religious schools, either. And there does not seem to be any public support for tuition vouchers -- every time there has been a referendum vouchers have lost badly. Suburbanites see vouchers (correctly) as something that will increase their taxes, drain money from their own excellent public schools, or both. (It doesn't help that the loudest proponents of vouchers are people who are overtly hostile to public schools in general. We, on the other hand, just want some relief!)


"in 20 to 30 years most orthodox children will be attending public school"

Just last Shabat we had lunch with a family whose eldest is attending Bronx High School of Science. Top notch education, no tuition. Dad is a rabbi's son and well qualified to teach his own son torah.


"the white male 40-70 year old in the US is now on the endangered species list as far as employment is concerned."

I got my current job at age 43. (I'm 50 now.) But I had a cousin who was an engineer who got laid off at age 59; he will likely never again have a professional job. He has been working night shifts as a security guard.


"much of the Frum community is adamantly opposed to the secular education necessary to get high paying jobs"

But the tuition crisis is just as big a problem in MO communities who are big supporters of secular education.


"How do you think people can pay for their advanced degrees? "

I got paid to get my PhD.

And it is a not very well known fact that almost any US citizen who is a good student can get paid to get a PhD in most fields.

qsman said...

I don't know how it works elsewhere, but as stated in the introduction, I was approached. I guess someone thought I would be well suited for it. I am not an accountant or remotely connected to professional financing.

JS said...

qsman,

Thank you for answering my questions.

I am shocked that you said 60% of families ask for tuition assistance. As a followup, if a family receives $5,000 in tuition assistance, for example, does that mean there is a donor who put up that $5,000? Or does the yeshiva simply have a target number for collected tuition (i.e., we need to collect a minimum of $4M, if everyone paid full we'd collect $6M, so we can "afford" to give out $2M in aid - in other words there is no donor, it's just an amount the school is willing to forgo)? Or is it some combination of the two options?

Also, how much aid is requested versus how much is received on average?

Lastly, 60% is undoubtedly very high, at what point do you see a total breakdown of the system? Also, at what point does the yeshiva say we have a serious problem? Would it be based on the percentage asking? The total amount being asked for? Or some other metric? Are there any contingency plans on how to handle such a breakdown?

WannaBeChossid said...

Take whatever cost of living expenses have increased and apply to your local institution:

* Salaries (still needs improvement) for both staff and teachers
 what are administrative costs like? As far as salaries, did they grow @ 10% year? I doubt it. Can please give us a general $$$ what teachers make? can you give us a general idea what this number is in terms of % of the whole budget?
-
-
*Payroll taxes & expenses
 Can you give us a general idea what this number is in terms of % of the whole budget?
-
*Utilities - you think your electric bill is high? Business phone lines are not cheap either.
 VOIP won’t work for schools? If you get astrix setup it will cost you 95% less then what you are paying your phone companies.
-
-
* Maintenance contracts for cleaning, HVAC, plumbing, copiers, PBX, etc. We do have a maintenance staff and they do their best to solve internally
 Can you give us a general idea what this number is in terms of % of the whole budget?
 Copiers – how often is this utilized? Do you buy new or used? What do contracts cost ?

-
-
*Repairs on items not covered by contracts.
-
 Like what? Is this something that can be fixed with newer equipment?
-
*Insurance - health insurance for employees, liability (how about those molestors!), property
-
 How often does your school shop for better deals? What kind of insurances do you offer? Why not try walgreen’s way and offer high deductible insurance, thus lowering your costs?

-
- *School books - not everything is supplied by the state, plus limudei kodesh;
 why not pass the cost on to the parents?

- *Supplies, including reams of copy paper and other classroom items
 Does your school try to buy supplies with other schools to have a better bargaining position?

-
- *IT expenses (yes, we have some labs. We can't educate kids on 386machines with 256k RAM)
 I cannot imagine this is a high amount. I am sure you also can get stuff donated; I also hope you don’t buy new systems?



please don’t take this as my questioning of your ability, I am just curious as to what a school budget board does to try to lower the costs, instead of raising tuition.

amL said...

I honestly don’t know weather to laugh or cry. 60% is no surprise to me. My husband and I crunched some numbers quickly last night. We both have master’s degrees and make a combined income of about $150k per year. We live in OOT, where the tuition is relative low (about 6k for the little ones and up to 15k for the older kids). We live in a modest home, drive used cars, we DO have student loans, but no credit card debt. We don’t see how we could realistically pay more than 3.5k/month for tuition for our kids (we have two kids now and would love to be able to afford two more, but I don’t know how this will be possible)- and that’s REALLY pushing it.

In the mean time we’re paying off our own grad school loans, funding our own retirement, and trying to save a little for the children for college.

Someone said it correctly earlier- we are middle class folks trying to achieve something that is a luxury reserved for the wealthy- giving our kids a private education. We’re also living in a generation where higher ed costs are astronomical. Even if you are hoping for those academic scholarships (profk), most won’t cover the whole costs. The average undergrad student leaves school with 8k of debt. That’s an average. Some have much more.

And tamiri- you’re wrong, folks are paying for grad school over 25 or 30 years, not 10, This is how bad its gotten- students are funding grad school the way that they’re funding a home. I don’t know that waiting to have kids to pay off those loans is a viable option. And most professional grad programs require a minimal number of years of work experience. The average graduate student in America is 37-52 years old. Yes, many employers give limited tuition remission, and yes, often the cost of grad school is worth the extra salary earned.

The bottom line is that the system is about to implode. We’re setting our own children up for failure. They’ll be paying off their own undergrad student loans, saving for retirement, paying for a home and possible grad school, caring for an aging population, and paying through the nose for day school tuition for their own kids. I don’t understand why there isn’t a national taskforce of high-level folks working on this problem. Putting our heads in the sand doesn’t make it go away.

Yes, there are folks who can’t manage their finances and there are folks who have far too many children than they can possibly afford, but we REALLY have to tackle the problem of the system itself because those of us doing everything correctly still can’t make all the ends meet.

amL said...

One correction- in my last response, I wrote that the average undergrad has $8k in debt, but my hubby didn't believe me and found a March 5th CNN article that cites the number closer to $22k (http://www.cnn.com/2008/LIVING/personal/03/05/student.loans/index.html) . Also, check out the book "Going Broke by Degree," an AEI book that came out a few years ago on the rising cost of higher ed.

Lion of Zion said...

"Most schools I am ware of will offer free or significantly reduced tuition to children of teachers as a perk"

this is no longer true of many (most?) MO schools, at least in the new york area.

Shoshana said...

Dare I open this Pandora's box again?

Homeschool!

We have been homeschooling since day one - no day care, preschool, etc. This choice is by no means a free ride as far as time or money. It is a major financial sacrifice to get by on one salary. I shop only at the Goodwill (and probably look it too!). But it has been worth it for more reasons than I can count.

I am not campaigning to close the schools, so don't jump all over me. I very strongly support professional educators and applaud them for their hard work on behalf of Jewish children.

But, this IS a valid choice and one that parents could consider if their school situations continue to spiral out of control. The number and intensity of comments to this guest post should lead us to believe that it is time to explore our alternatives.

Commenter Abbi said...

Shoshana
Homeschooling might work for you, but it is by no means an all purpose solution to the tuition problem for the simple reason that most parents aren't suited to patiently or adequately educating their children nor being with them 24/7.

I'd sooner suggest aliyah, rather then homeschooling, but I fully understand that this isn't an all purpose solution for everyone either.

Yael Aldrich said...

Shoshana,

You are beating a dead horse.

Those few who will homeschool, do it (like your family and ours as well).

We know we may not homeschool for the rest of our kids' lives. We may have to outsource some of their education (both Judaics and secular) and that's OK, and it is still cheaper than the alternative of yeshivah/day school education. We may have (many?) days when we are frustrated, angry or generally tired of our children and the great responsibility we have taken on. We know that our children can and should socialize with other Jews/people and enroll them in activities so they can be part of the greater whole during their free time.

BUT, we will have a greater amount of time with and influence on our children and probably learn a lot to boot!

Not everyone is suited to homeschool, however, I think people concerned about their finances and the direction of their children's education should seriously consider the idea and even try it...

ProfK said...

If something were to break down in our homes we would look at it analytically and ask can we fix it and will it still work fine or do we have to throw it out and buy something else. When we raise the issue of home schooling we are saying that the yeshiva education system is broken beyond repair--time to buy something else.

Before we start shopping around for other alternative educational models we ought to give full consideration to how the present model could be repaired to be functional, and will it still work as we want and need it to after it is repaired.

Someone once called ours a "throwaway" society. Are we looking to throw away yeshiva education in schools? If not, then we need to call in a repair person and start tweaking the machine.

Yael Aldrich said...

No, ProfK, I don't think that the yeshiva system is broken beyond repair -- for most people.

Most people I know figure out how much they can pay and run it through the scholarship/tuition committee (if they can't swing the full tuition) or suck it up and pay full price (we did during our time in the system) or they take a job in the system to get a reduction in tuition (although some have said it isn't done anymore in the larger cities).

Yes, everyone complains that the price of a Jewish education through this system is too high and yes, everyone says that the rebbeim/moros/teachers don't get a living wage -- all creating a ugly cycle.

All the homeschoolers (at least me) are saying is that there is another option -- it may work for YOUR family and then again, it may not. But is not considering it at all smart?

I THINK you (and others like commenter abbi on this blog) don't feel it is right for YOU. I understand -- it isn't for everyone (how many times can I say that?) But you shouldn't poo poo it for those who might consider it. Believe me, I don't think more than 2% of us could consider it (that's the figure for homeschoolers in the US) and even fewer would actually do it, so don't worry -- your kids will have classmates! :)

Have a Happy Shavuos!

JS said...

In terms of a national task force on tuition, good luck. For anyone to do anything it takes more than some grumbling on a blog or private conversations with tuition committees. Who is going to stand up in front of their community and say "I am 100K in credit card debt, I have no equity in my home, and I can no longer pay tuition" - or something similar. Because I don't think any community leaders are going to even think of doing anything until lots of people come forward publicly with such statements.

I also think that most people would say the system is not broken if people can pay in full or whatever is negotiated by the tuition committee. They don't care if the money comes from grandparents, credit cards, home equity, taking jobs in the yeshiva, etc. As far as they are concerned tuition is somehow being paid and that's enough. I think that's short-sighted, but what do I know?

JS said...

Some personal background on the subject of loans and tuition payment and salaries:

My parents always paid full tuition. They once went to the tuition committee and it was an invasive and embarassing process and they only received a pittance - I believe only a few 100 or 1000. In short, it wasn't worth it to go through the committee again next year. They just took out home equity loans and arranged to make monthly payments. Because of this, my parents are STILL paying off tuition even though my youngest sister has been out of yeshiva for 5 years (I was out 9 years ago). Also, as a result, my parents could only pay about $10K a year for our college tuition and were never able to save for our college tuition (the $10K a year is what they could pay "out of pocket" for yeshiva tuition, the rest came from home equity loans). I left college with $80K in private loans and $15K in subsidized govt loans.

My wife's grandparents paid for her (and her siblings) yeshiva tuition. Her parents took on a lot of debt to pay for her (and her siblings) college tuition. She had no college loans - but her parents are very deeply in credit card debt (also due to many poor decisions over the years). My wife's only loans are from graduate school and these are only $50K due to academic scholarships.

Through a lot of hard work, luck, and God's help, we both now make very good incomes. We also met in college which allowed us both to live at home for a while after college before we got married and save money and pay off our loans. We now have almost completely paid off our loans and been able to save money for retirement and a downpayment for a house. We also decided to wait to have children which also helped make this possible.

However, I look at our friends and community members and many have not been blessed with high incomes, they had children right away, they have loans to pay off...and I just don't see how they'll ever get out of debt or pay tuition.

Not everyone can be a doctor, a lawyer, some big executive, or a big shot on wall street. We have friends who went into education or into social work for example. These are admirable professions, but ones that simply don't pay enough for a frum lifestyle. Add in parents who are not high income, have their own debts, have been bled dry paying tuitions, and it's a very precarious situation.

I often wonder what would have happened if I hadn't met my wife in college. Out of college I was not making a good income. I probably would have felt compelled to move into the upper west side to up my chances of meeting someone. I would not be able to save anything and my loans would get refinanced to 30 years probably. I would eventually meet someone but be completely broke and probably have some credit card debt. If she has a similar background you'd have two broke people with lots of debt and no savings because they've been living in the city. We'd probably continue living in the city since our friends are all there and maybe squeek by a little savings. And if we had kids right away we'd have no choice but to move out of the city, but by then it would be too late, we'd have tons of added expenses, no money, lots of loans. We'd probably need day care and my wife going back to work right away to make ends meet. Forget about saving for a house, yeshiva tuition is right around the corner. We'd probably have to throw ourselves on our parents and grandparents to scrape together tuition and/or a downpayment.

I can't write anymore as it's getting too depressing - I'm basically writing the story of several couples I know. The scary part is that I'm very worried about our own financial stability given the costs of yeshiva tuition and college (I don't want my children to have debt like I did as they start out their lives and I don't want to be paying off my house forever like my parents or in deep credit card debt like my in laws). We want to have 4 kids (maybe more) and that just makes me think of the local MO yeshivas asking $12K for kindergarten and $22K for high school (adjust about 8% or so a year into the future and I can't sleep at night).

Honestly Frum said...

I am working on one of these "National Task Forces" and small progress is being made on local levels (Teach NYS for instance). Although the problem needs to be solved on a greater level it needs to start in seed groups in individual communities. Super funds need to blossom and for those who give MAASER (not all can afford to) THE MONEY MUST STAY WITHIN THE COMMUNITIES. How often do we see appeals in our shuls (I can only speak for the NY area) for important causes in Israel and elsewhere and people very generously open up their wallets and thousands of $$ are raised after a single speech or parlor meeting. But try telling these same people that the local yeshivas cannot meet payroll and they look at you funny. The money flowing out of our communities needs to stop. The collectors that come in the mornings should be told to find jobs (there is a job for everyone, packing groceries or the like). Local yeshivas must start acting together to purchase healthcare, supplies and the such. Try sitting down with a school administrator or a board and it's like talking to a wall. We as the tuition paying parents need to take a stand and tell the yeshivas that until they begin to reign in their costs we will not pay tuition. It seems to me that the only pain being felt is by the parents who keep getting tuition increased on them. Increase class sizes and get rid of some teachers and administrators. When a wall street firm can no longer afford to operate they lay people off, when was the last time there was a mass layoff in the Yeshiva system due to budget cuts. Lets start running our yeshivos like businesses. The power should be taken away from the principals and put in to the hands of the local business men. Perhaps setup communal oversight committees to see how the school is spending each and every dollar. 15 years ago there were 30 kids in a class with 1 teacher, now many schools have max 18 kids with 2 teachers. Time to go back to what worked for us when we were in school b/c we are currently getting a very rude awakening.

qsman said...

wannabeachossid-
I don't have direct access to the budget figures - the above list was generated based on what I remember from the questions I ask when these issues come up. I'm not trying to hide , I cannot tell you percentages on the budget but I can definitely reply to some of your questions regarding how we try to keep costs down.

No one gets a 10% raise, it's been tough even allocating COL increases. Salaries are based on seniority, I don't think ethically I can disclose actual salary figures even if I got my hands on them.

Ditto on payroll, but that you can determine based on current federal and state requirements.

Utilities - for electric/gas, the school is part of a non-profit pool/co-op which does help, and we do set thermostats and light timers to ensure energy is not wasted. We have installed some automation that helps us control these items
VoIP - good idea, but not every area in the US is within reach of DSL/cable modem, thus not an option for us. Even if it was, we'd have to budget hardware and allow for training time, figure out how to set it up, and would you want your staff learning how to operate your production phone system on company time, or making sure the teachers are getting the support they need?

(As an aside I ported my home number to VoIP and am paying less than 1/2 of what it was previously. However it took some time to tweak the settings to get it to sound decent, involving support, etc. I've also had to battle the ISP and the VoIP company pointing fingers at each other. )

Copiers - I THINK we get around this problem now by using volume printers, so you can strike that from the list. It's much cheaper cost per page

I'm lumping the general maintenance in there. I always see our maintenance head in the aisles of the local hardware mega-store buying SOMETHING.

Insurance - I'm not privy to this one, and I don't know exactly what they offer. ***MY OPINION*** Retaining good teaching talent is essential, and perhaps its better to offer a basically decent health plan than to throw a HDHP at someone who would stand to loose more $$ teaching and walk out. Then you've got to recruit new folks, not all of which are qualified despite what the yeshiva system has inoculated in them **END OPINION***

Books. We do, its a fee added on top of tuition. It doesn't cover ALL the costs, but it helps.

Computer labs - we buy from various govn't surplus auctions.

WannaBeChossid said...

Hello QsMan,

So question remains, what exactly happened to justify a 10K (140% increase) increase in tuition from 1991 to 2007? If Salaries did not increase 140%, and in any business salaries are 30%-50% of the cost, what exactly is killing a school that would justify this kind of an increase in tuition?

My guess is that Schools increase tuition because they are getting larger and larger amount of people applying to schools that cannot pay full amounts, and this is due to a number of different factors: larger families, kollel generation coming of age, kid(s) in Israel, college tuition, etc etc. So in order for them to stay on the same level where they were in 1991 they have to keep increasing the tuition so the top 5% keep paying it and thus ensuring that school stays afloat, and the rest they would get from donors.

Paradoxically, there are A LOT more schools that cater to orthodox students then ever before, see this link: http://www.simpletoremember.com/vitals/dayschool.pdf, which would dictate DECREASE in tuition, i.e. more choices/more competition etc, but this is NOT happening. I don’t want to repeat everything I said before, please see my post here: http://orthonomics.blogspot.com/2008/04/pesach-hotels-and-tuition-i-got-buried.html , please search for WannaBeChossid.


My main point in that post was that we have too many schools; everyone feels that they are entitled to their school. Instead of combining schools (trend among non orthodox schools and catholic school) we open new schools for no reason @ ALL!


Since I don’t know where you live, I don’t know how many schools are around you, but have you considered an idea of combining secular education between different jewish schools?

WannaBeChossid said...

One More,


***MY OPINION*** Retaining good teaching talent is essential, and perhaps its better to offer a basically decent health plan than to throw a HDHP at someone who would stand to loose more $$ teaching and walk out. Then you've got to recruit new folks, not all of which are qualified despite what the yeshiva system has inoculated in them **END OPINION***

Why not offer different levels of insurance? Good people get “good” insurance, new hires get HDHP?

I can only imagine what your costs are, most of the teacher body prob has what, 6 kids and up? 


VoIP - good idea, but not every area in the US is within reach of DSL/cable modem, thus not an option for us. – What about a fractional T1? Costs have dropped significantly in the last few years.

As far as training, there really is not much training involved. You could go with Skype type of a setup with 25$ a year per phone line per unlimited calling. Unless you do a lot of overseas calls it works really well. I run a support business and this is how I provide phone support. You can put a Inet based PBX in front of it, like www.aptela.com and you have an entire system setup WITHOUT any hardware beside your pcs which you have to support anyways. If something breaks, you can always ask a yeshiva bochur to help 

What about Software licensing? Is this something your school gets for free for you have to pay for it? If you do, then I recommend Open Office as replacement for the insanely expensive MS Office ( it is FREE ).

JS said...

wannabechosid,

I highly doubt the high costs of tuition or a significant budget cost of yeshivas is their copier bill, computer bill, or phone bill. The largest line items are what you would expect: salary, mortgage, maintenance. Cutting a few hundred bucks here and there isn't going to reduce your tuition bill by much.

Also, scrimping on teacher's already meager salaries and benefits is not the solution either.

In terms of what you said about raising tuition so the top 5% pay more to subsidize everyone else, this relates to my earlier question which I hope qsman will answer:

As a followup, if a family receives $5,000 in tuition assistance, for example, does that mean there is a donor who put up that $5,000? Or does the yeshiva simply have a target number for collected tuition (i.e., we need to collect a minimum of $4M, if everyone paid full we'd collect $6M, so we can "afford" to give out $2M in aid - in other words there is no donor, it's just an amount the school is willing to forgo)? Or is it some combination of the two options?

I had some other questions/comments, but those are above. Thanks.

Dave said...

Bluntly, you can't always get what you want.

First, look at what makes the public schools possible.

Everyone pays, whether they have children in school or not, and they get the benefit of an economy of scale (since there is one system). The drawback to the single system is of course that there is no direct competition with it, but it does have the benefit of not duplicating overhead after overhead.

Could something like this be done in a community? Sure, if everyone paid a communal levy, whether based on income or real estate, the costs could be amortized across the whole community. I doubt it would ever work, but it is possible.

But let's assume we can do it.

Now, I live in a small town, in a rural area. The school district has about 3,000 children over two towns, covers about 250 square males, and, taking into consideration building expenses (six schools), buses, and everything else, spends around $8500-9000 per student per year. Of this, somewhere between 75% and 89% (according to the state wide figures) is Salary and Benefits.

Some of that funding is from a local property tax levy, some of it is from sales tax, and some is from the state. Obviously, the last is from outside the community.

However, even in an area which has a lot of families with children, I would say that the average number of school aged children, amortized across the whole district (including those with no children in school, and those with many), is unlikely to be more than 3 per family.

Even with outside support, I think this system would collapse trying to handle average children-in-school numbers in the 6-9 range.

So, now we've done an outside bound -- even a publically funded system assuming a homogenous demographic (i.e. you don't have large numbers of small families to subsidize large families) isn't going to work.

So can a purely private system, without economies of scale, and without the level of financial transparency mandated for public institutions, hope to make this work?

ProfK said...

wannabechosid,
Re "My main point in that post was that we have too many schools; everyone feels that they are entitled to their school. Instead of combining schools (trend among non orthodox schools and catholic school) we open new schools for no reason @ ALL!" Not necessarily.

As I point out in my post on yichus and how to buy it, because of the large pool of students who would want a yeshiva education, schools are limiting who they will take in, particularly in the large urban areas where yeshivas are in competition with each other to be "king of the hill." They take only those students who will be a "credit" to the yeshiva. Parents who don't fit 100% into the mold may end up starting another yeshiva so that their children will have where to go.

Having said that, yes, there are too many yeshivas. Any Tom, Dick and Moishe who wants the public recognition begins a yeshiva. Then he isn't just plain Mr. Moishe, but Rosh Yeshiva Moishe.

Someone up above had a great idea--have one school which provides the secular studies for all students, who then would go to whatever yeshivas they wanted--and could afford--for Jewish studies. Okay, two schools: one male, one female. But then you would need to get everyone to agree on curriculum.

Dave said...

While I have no doubt there are in fact 250 square males in the district, that was supposed to be square miles.

qsman said...

wannabeachossid, for various reasons your idea won't work where we are (I'm in IT myself and am involved peripherally with the IT at the school). Combining schools wont work either. And "finding a yeshiva bochur" to manage a complex pbx like we would need is a rather unprofessional way to run a business based on my past experiences. Also, try telling that to a girl's high school :)

JS,

Mortgage is also part of the budget, the school had to expand a few years ago becasue of lack of capacity. I didn't mean to leave that out, sometimes the most obvious thing is right there.

I'd like to combine my answer with honestlyfrum's statement.

The problem is filling the gap between what parents can pay. We can only "get" so much, which is why fundraising is important. honestlyfrum beat me to my next posting where I was going to talk about communal responsibility. Literally millons of dollars are given to meshulachim and others who come to collect for various causes outside of our communities. While supporting the yishuv has always been a part of Jewish tradition, we're bleeding ourselves dry. NY has a very large Orthodox community, so their clout is much greater than ours.

I think *that* discussion merits it's own thread. I'll do my best to keep up with the questions, and I apologize if I missed yours. You've also given me some things to think about and question.

For some ideas on needs based tuition, see this:

http://www.sjbelementary.org/othermedia/COST-BASED-TUITION-SJB.pps

I'm also wondering if cash flow is an issue for the schools - if people are not paying and the school is running short, that could potentially piggyback from year to year. I've got to think about that one. I am aware of at least one school out there that is using some type of automatic drafting as opposed to the head checks. Kinda makes it like a mortgage or utlity payment.

JS said...

qsman,

Not sure if you were trying to address my question about how exactly $5,000 (for example), in tuition assistance works, whether it's directly from a donor, or whether it's what a school can "afford" to not collect.

Thanks. This has been a very informative and good conversation.

Tamiri said...

One thing I would like to ask SL: from your posts, I think you believe in a cost vs. profit ratio. At what point does a day school tuition cost more than it's worth? Do you have a number in mind? Do you know what such an education is "really" worth to you and your children?

V said...

Hello qsman,

"Combining schools wont work either" why not? what are the challenges?

As far as complex PBX, if you use the system like aptela + skype, there is no hardware to support. only 7.99 headsets that would go straight into your pc. And i can guarantee that any yeshiva bochur would know how to setup skype :)

Dave:
i COMPLETELY agree with you.

please see my post here where i do the math http://orthonomics.blogspot.com/2008/04/pesach-hotels-and-tuition-i-got-buried.html

it comes out to about 250$ per jew per YEAR to support all of our students.

qsman said...

Combining schools - off the top of my head: seperate genders, then multiply by parent/school educational philosophy, transportation, agreement on curriculum, differing school schedules including lunch and dismissal, large enough facility to accomodate everyone so you've got that cost, administrative overhead....

VoIP startup cost would be somewhat significant since we've got more than one physical location involved. PBX's have been invested in already, you've got to figure in that throwaway cost, plus connecting the buildings... You've planted the idea though, I will look into it. Thank you

Anonymous said...

"At what point does a day school tuition cost more than it's worth? "

I would say for the upper-middle classe its $30,000 for the middle class $20,000

at that point the kids go to public school

as a test - check out Sinai and Petach costs - at that point many parents - choose public school

Arrogant school administrators should be another post - one told me "what you pay in yeshiva tuition doesn't cover the cost of your child's education" the answer to her is - no it actually covers my child and 1/2 the kid sitting next to my kid on scholarship

Anonymous said...

qsman - are you my spouse?! i feel like this was written by my spouse who is on a tuition committee. I think the calls for transparency are a bit disingenuous (possibly unintentionally). why is the assumption that the school is overspending always prevalent? do you think you can do a better job than the school and/or Board? Most schools do have guidlines for tuition assistance, but those are usually just a starting point. such as tuition should be xx% of the familie's AGI on their tax return. then come all the other considerations, prior debt; health issues; 1 or both spouses working? if both, childcare arrangement; other assets, etc.

last year there was a family that appealed for additional tuition reduction and came to the meeting with the committe. both husband and wife were well dressed and they sat down with the two representatives to present their case. when asked about extensive real estate holdings, they stated they were illiquid, one of the members of the committee pointed out what each of the two committee members drove one a honda accord, and the other toyota landcruiser. on the family's credit check (and parked in teh school lot) was a cadillac escalade that was being paid for each month. He said, we both pay full tuition, but need to make choices to do so. he also mentioned that there were many cases of True need, and that is who looses out if the limited funds are allocated to families who "need" it only so that they can live a certain lifestyle.
Needless to say, the family paid full tuition this past year.

very few people are able to spend without thought and also come up with full tution. one way to control costs is to be very thorough in the scholarship process. our school recovered over $500k by this exercise last year, and stands to gain more this year, which will be offset by additional need based on the economy.

one thing that more schools need to consider is re-visiting class size and # of classes. it puts a tremendous strain on the school when they have to pay to keep 2 classes of each grade, when in some cases, the class should be combined into a single class unless there is a minimum of X additional students where it makes sense to open a new class. Most schools run efficiently with a class size of 20 which is not unreasonably large. there should be a minimum size for a second class of the same grade to be created. so a grade with only 28 kids would have one class.

the next question is always, well where do the other kids go. that becomes their parents choice. schools are too frequently subject to say, well, its better to get $3,500 and have the kid then to get nothing at all, and therefore take many kids for reduced tuitions that otherwise would perhaps not qualify. the theory being, well the class is running anyways and there is not much incremental cost in adding another kid to the class. if that mindset was changed, there would be a big shift in the way school budgets worked. it shouldnt be a given that there will be 2 (or more) classes per grade, none of which are trully "full" creating an environment where families that want to take advantage of the system easily can.

Effective fundraising must occur to close the gap between what it takes to run a school and what the average orthodox family with young children can afford to pay for tuition.

Dave said...

I think the calls for transparency are a bit disingenuous (possibly unintentionally).

...

Effective fundraising must occur to close the gap between what it takes to run a school and what the average orthodox family with young children can afford to pay for tuition.

That's the point. If you want to raise funds, and you aren't transparent about what money you get, and where it goes, you don't get my money.

Ever.

If things are run well, and the money is spent efficiently, transparency shows that.

If things are generally run well, but there are places where an expert could do things better, you have the option of getting expert advise (for free!) if someone who cares and knows is able to look.

If things are run with good intentions, but with mistakes, transparency shows that too.

And if things are run corruptly, with rampant nepotism, overpaid sinecures, or employees stealing, transparency shows that too.

Transparency is about both doing things right, and showing that you are doing things right. If an organization that was asking for funds got defensive when I asked to see the financial information, it would guarantee that I would have nothing to do with them (and would probably urge my friends to have nothing to do with them).

Dan said...

Because the cost of tuition is so high, both in relative terms to other household expenses, as well as in absolute terms with respect to after tax dollars, there is a natural tendency to wince and/or faint when opening the tuition bills, especially the cumulative affect of multiple children and/or mutiple schools and over decades of time.

This pain then usually translates to thoughts of how/why should I have to work so hard for my money and then be asked to part with such a significant portion of my take home pay?

This then leads to thoughts of how do I reduce this bill, especially if the premise is that the bill is overinflated to begin with due to the need to offset scholarships, teacher's children tuition reductions (or free), etc.

It becomes a case of "if I don't get a break, I'm paying more than my fair share".

If there are multiple schools to deal with, the issue is compounded by the fact that certain schools will not give a greater percentage off full tuition than the other schools you have to negotiate with.

How about the generally accepted prinicipal that each and every household should have a savings account with six months living expenses saved for emergencies, layoffs, illness R"L, etc.?

Why isn't that part of the financial analysis picture of the scholarship committees?

Will the school help parents who lose their jobs to pay their mortgage?

If not, how can they be denied a savings account with some number of months living expenses?

Overall, there are four basic categories of parents:

1. Those that are so wealthy (or grandparents, etc.) that they don't need nor apply for financial assistance whatsoever. I doubt any of these people even know that this blog exists.

2. Those that incomes exceed the average middle class, depending upon the household size and domicile, anywhere between $150 - 250k annually

3. Those that incomes are within average middle class and/or have many children

4. Those that are very young with kids and/or uneducated/unable/unlucky enough to make a decent living

Some portion of the last three categories all need tuition assistance due to each individual circumstances.

The issue is that the Mosdos all feel the need to treat all applicants as guilty of attempted fraud instead of Dan Lkav Zchus in order to weed out the cheaters.

Once again we reach the same conclusion, the system is broken with no hope in sight for repair.

Each side of the issue needs something that the other side can't give -- MONEY.

Anonymous said...

Anon 5:37 here.

dan - great post! I have to disagree though that everyone in categories 2 & 3 would need assistance. We were paying $20k/year in tuition on under $90k (combined) gross income. then came taxes, shelter, food, etc. that was when i only had 2 kids in school (I have 4 now only a few years later). No it wasnt easy, No i didnt have lots of new STUFF, No we didnt go on any exotic (or even not-exotic) vacations, and no we didnt get a DIME of help from parents/grandparents. it is doable, just not very easy (or fun!) and certainly not comfotable to be the one to say, sorry cant do that, i cant afford to.

Too often people think if it is not easy, its not doable, and feel entitled to support after all, so and so drives a new car, so should i.

the saddest thing is that that really taints the entire pool when there are so many cases of fraud, and it does make it difficult for tuition committees to not assume everyone is guilty until proven inoccent....however, from what I have seen first hand, unless there are glaring red flags the assumption is that the request for aid is genuine, and that the family is truly in need. the challenge is then the allocation of limited resources amoungst many competing priorities.

dave - i dont disagree that transparency is important, my stating that the calls for such are a bit disingenuous stem from the fact that too often that is said from the standpoint of wanting to see specific salaries (or enough that specific individual's salaries are easily calculatable) by individuals who dont really have an interest to help solve the problem. I am all for a standard operating (and capital) budget being prepared which should be available to parents and donors alike. Actual results compared to budget should be a part of that as well as a variance explanation. without both parts (budget and actuals) it is hard to see where things are going wrong.

as has been said before, there is no golden egg here, and it is going to take a combination of many changes to remedy the current situation and avoid disaster in the future.

Anonymous said...

oh - one more thing (anon 5:37 again) on a personal note.

we were blessed with no debt going into our marriage (i know that is not always the case) and put the money we got at our wedding, which i know really varies, so will state the sum - about $10k - into a mutual fund earmarked for tuition when that time came. we didnt buy new furniture (its amazing what kind of good stuff people part with) or go on a trip, or anything else. our first year of marriage we both worked (through a miserable and very difficult pregnancy) one while also going to school. we never really had much chance after that to save since childcare costs quickly ate up a large chunk or our pay, but we started putting away for the next year's tuition so that we arent faced with coming up with $30k or now $40k all at once on such a quickly escalating basis (rising tuition + more kids in school). whenever one of us gets a bonus, or any other additional money (extra paycheck for 26 paycheck calendar), we put that away and earmark at least 1/2 of it for "tuition" at times we have needed to dip into that, and it has been a big help that it is there, otherwise on some months i dont think we would be able to pay the mortgage, tuition, etc. without checks bouncing (gotta love head checks!!).

while small cuts, and prior planning is not going to solve this "crisis" it would certainly be an improvement over the current situation, and lots of small improvements can have a big impact.

Dan said...

I never wrote that everyone in categories 2 & 3 need assistance, but some do, even though it would appear on the surface that certainly category 2 should have no one in need of assistance.

Without getting into your specific situation at the time you paid 20k on 90k income, that translates to living on $3700 a month after taxes.

Depending upon where you lived and whether you rented/owned a 3 bedroom apt/home too painful/unrealistic to consider.

You must have eaten tuna and peanut butter except for Shabbos, not saved for retirement, went to parents/inlaws for Yomim Tovim, not had any emergencies, etc.

My point being, it is commendable that you went to such great lengths, but in my book, you are not required to mortgage your current life, your future life, and put your household budget on the teetering edge of bankruptcy to pay full tuition.

As for the scholarship process, when dealing with multiple schools, it is an absoloute nightmare!

Each one wants to deal with you indvidually with little to no regard to your overall tuition burden.

This causes greaty animosity on the part of parents since they are subject to this horrible process multiple times annually for decades.

Anonymous said...

dont scare me - my kids are still all in one school, although not for much longer.

I agree that as housing (and food and gas) prices have increased, living on $3,700/mth (after tuition is paid) would be difficult, but as little as 5 years ago that was doable without going to the lengths you describe above.

there is some middle ground between poor decision making and tuna/peanut butter every night, and that middle ground leaves lots of room to determine just how tight things will be if/when an emergency occurs that requires $$ over the usual monthly expenses.

while in today's economy it may take more in absolute $s to get by, and pay tuition, the point remains relevant. at the time we had friends making about the same and some making more that honestly needed tuition assistance b/c of their spending.

we were in our early/mid 20s when our kids started school, and not recieving help from either set of parents, but felt strongly about paying tuition so as not to add to the burden the school already has. I thank Hashem every day that we were able to do that, b/c i know that there are those who are unable to, and no amount of planning, budgeting, cutting would enable them to b/c they have a limited income stream.

with time, our incomes have Thank G-d increased very nicely, although we dont really have any more disposable income since we have more kids in school. People I work with dont understand how I drive what I drive, and vacations are only for an extended weekend somwhere in driving distance, since after all they assume with what i make, i should be able to do better than that.

One thing that i think would be helpful is for people to look at those in their same situtaion, people that are working with limited resources, and limiting other expenditures (furniture, cars, trips, etc.) and making it work, or even worse, those with R'L real tzuris be it health related, financial situation, or anything else. we too often (myself included!) see others who have it easy (or seem to) and live extravagent lifesyles and compare our situation to that. it is easy to be resentful when we feel taken advantage of, and it is so unfortunate that the prevailing feeling amoung parents who pay tuition is that of being a sucker for paying more than their share.

Anonymous said...

oh, and we did save for retirement, and didnt go to inlaws for yom tov! ;-)

i also believe in having emergency savings (we probably dont have as much as we should, but have been forced to use it in the past, and try to build that up when possible).

Honestly Frum said...

The question that needs to be addressed is how far must we go to pay full tuition? Should we live in apartments and not buy houses? Not buy new clothes for yom tov? Is one required to live like a pauper to pay tuition? I live in a community where there are, thank G-d, 5 MO elementary schools (I stress MO b/c they tend to be more expensive), does the community truly need this many schools or can there be some consolidation? And who is going to make the first move? Clearly it is not going to be the schools or their directors who suggest giving up their grip on the schools but something needs to give now in this system.

WannaBeChossid said...

Hello,

I am still not seeing why costs are so high? can someone please tell me what schools spend money on to justify 18k a year tuition?

18k in 2007 vs 7.5k in 1991 Please advise!!!

Mike S. said...

Wannabee:

A rough rule of thumb in industry (I am thinking of businesses that are mostly labor and unspecialized space) is that to break even you need to charge roughly 3 times the salary of the employees working directly for the customer (i.e. the teacher in a school). That is to account for benefits, physical plant and equipment and the salaries of theothers who work supporting the direct bill--in the case of the school that would include administrators, librarians, janitors, the nurse, the secretaries and the business office. If you figure a teacher makes $60K/year (I think this is not unrealistic for the MO schools that are charging $15-18K) the classroom must bring in about $180K to break even (it might be more with a new building to pay off or less with a well maintained, fully paid off building.) With 20 kids/class you have to bring in $9000/kid. My kids' school does tell you what fraction of the nominal tuition they collect (about 2/3) on average; that would correspond to a tuition of $13,500. With 15 kids/ class you need to get $12K/kid or a nominal $18K full tuition. In my kids' school they seem to run 15-20 kids per class, and charge $16K, so they are not being unreasonably extravagent.

The chareidi schools tend to be a lot less expensive because they pay a lot less.

ProfK said...

wannabechosid,

Imaginary school with only 1 class per grade and 8 classes. 20 students per class for 160 students in the school. $18K tuition per child equals $2,880,000 in income. Let's give the teachers a semi-decent wage and even include health insurance of some sort. Teachers's salaries plus the benefits, plus the school's co-pays for social security and let's say $50K per teacher times the 18 teachers (kodesh and chol), so you have $900K in expenses. Let's have a principal and a secretary and a janitor. Let's add only $150K for that. $1,150,000 in expenses, and we are being fairly restrained on these salaries. We are assuming that everyone is getting the same salary.

Let's also say that 1/3 of the students are siblings. Parents are not going to be paying the full tuition amount because of a discount for more than 2 or 3 children in the school. Let's give these kids the tuition at $14K instead of 18K. 1/3 equals 60 kids equals 240K to substract from actual income. So we have only $2,640,000 coming in and $1,150,000 going out. Someone above mentioned that about 60% of students are getting tuition reductions or going for nothing. We have already accounted for 1/3 that automatically are getting a reduction. What if the other 1/3 got even bigger tuition assistance? What if they only paid $9K per child? That would mean 60 kids would not be paying $540K expected towards expenses. Now you have only $2,100,000 coming in. And what if some of those who are getting multiple sibling discounts still need tuition assistance? Just for arguments sake let's say they get $100K in reductions.

That leaves us with $2,000,000 in income and $1,150,000 in outlay. And we have not touched any expenses but salaries. And we have not touched state mandated programs that require other personnel to be hired. And we are assuming that everyone is paying something, even if not the full amount. And we are assuming that all costs for goods and services remain the same indefinetly. And we are assuming that those parents who are at present paying full tuition will be able to continue to do so--no allowance for emergencies that can happen. And we are assuming a healthy economy with stable prices for consumers.

What happens to the school if their expenses equal the 160 students times 18k? What if their income is less then their outlay? Either they need to have a solid pool of outside money, or they are going to have to raise tuition for those who can pay, but the number who can't pay will probably grow as well.

No easy answers, but lots of hard questions.

Dan said...

Another element that is in play with regards to how much disposable income to spend on tuition is the fact that with many other expenses there are choices.

Where to shop, what to buy, what brands to buy, whether to go on vacation, if yes, where, how much to spend, etc., etc.

The fact that the tuition bill is set by the school, not well understood by the parent body as to how the figures are arrived at (I'm not one for going down the road of whether the money is being well spent), continually spiraling upwards, dealing with multiple schools, all makes parents inclined to feel trapped.

In many communities, while there may be a few schools to choose from, they are all within a certain range of astronomically high tuition prices relative to each other, effectively creating a monopoly.

Therefore, it is one of the few expenses where parents would like to save money but don't have any choice other than applying for scholarship.

Applying for scholarship can, in this way, be viewed similarly to shopping around for the cheapest price for a good or service since it is the only way to negotiate the price.

Dave said...

Private schools are able to offer what they do because they either have high tuitions, a large endowment, or both. They have historically either catered to the elite (possibly with some scholarships), or been subsidized for ideological reasons (i.e. Catholic Schools).

Public Schools are able to offer what they do to the masses, because everyone pays in, and the costs are amortized over society as a whole, and at the individual over a persons life time.

Where is the money going to come from for the Orthodox schools?

SephardiLady said...

Qsman-Are all teachers offered tuition reductions and/or free tuition automatically, or do they have to qualify based on some criteria? What if the teacher's spouse makes a very nice living, are they still offered a discount nevertheless?

Also, are there automatic discounts for kollel couples? A friend of mine complained that our community does not offer an automatic discount for kollel families. I refrained from saying anything, but personally I don't see why a kollel family can't present their budget just like friends of ours with PhD's in the sciences.

qsman said...

Yes, discounts are offered as an incentive to get qualified teachers in the door.

No automatic discount, they need to apply. Not every kollel couple is awarded a scholarship either.

To the anon tuition committee member - as I mentioned before, same issues here with fraud, thankfully over the past 2 years we've been aggressive as well. shkoyach.

ProfK, you are much more eloquent and clear than I could ever be in trying to explain what you just did

A few nights ago, I went to a science fair at the school. I got a tremendous amount of chizuk walking around and seeing wonderful, creative projects crafted by wonderful young individuals. They were very excited and proud, and the teachers and parents shared the enthusiasm. I know there's a lot of concern, but seeing these kinds of things makes you realize that its all worth it, despite the warts, worries & struggles.

Lion of Zion said...

TAMIRI:

"One thing I would like to ask SL: from your posts, I think you believe in a cost vs. profit ratio. At what point does a day school tuition cost more than it's worth? Do you have a number in mind? Do you know what such an education is "really" worth to you and your children?"

how can SL answer such a subjective question for you. every parent has a different expectation of what and how much a school should provide their kids. some parents are happy with what 8K provides, others need the equivalent of 30k

Lion of Zion said...

HONESTLY FRUM:

"Should we live in apartments and not buy houses? Not buy new clothes for yom tov?"

honestly, yes.

family A and B both make the same amount of money and have the same non-housing expenses.

family A has a house but no cash reserves (these were used for the down payment). the mortgage and other house expenses eat up the budget, so there is not enough left over for full tuition.

famliy B rents an apartment and has 50k in savings for a future house. the yeshiva sees this $ and laughs when the family claims it has no $ money to pay for full tuition.

famly B will never to get to save enough $ for a down payment because it is forced to subsidize family A's house. how is this fair? (i know more than a few people who rushed to buy a house as their first child was entering yeshivah, lest their savings be siezed.)

as far as new clothing, this is not an inalienable right.

Lion of Zion said...

HONESTLY FRUM:

also, there are houses and there are houses. most people don't really need as much house as they end up buying. (and if you live in the new york metro area you know exactly what i mean.) assuming there is even minimal equity, these people should be forced to sell and downsize before getting tuition help.

Lion of Zion said...

QSMAN:

thanks again for the post and taking the time to respond to questions.

SephardiLady said...

Tarmiri: Regarding your questions when Yeshiva/Day School tuition is no longer worth it, I am going to skip that question. But, yes, I do think there is a point where the cost of a product exceeds its benefit.

qsman said...

lion of zion, thanks. I've learned some things from the postings as well, hopefully I'll be able to translate them into something useful where I am.

I wanted to present a counterpoint to having communities combine schools. While we are all looking at the costs, and those of us on the financial pointy end have to figure things out, it is very important - nay, ESSENTIAL - that there is competition. It keeps all the schools on their toes trying to outdo each other in terms of educational excellence and attracting the best talent. The plethora of schools opening (thinking Lakewood) seems to be more due to exploding population and lack of space, based on what people who live there have told me.

anonymous mom said...

Most day schools do not offer their teaching staff free tuition for their children. Thank G-d the school in which I currently teach sees fit to do so. Of course, there are limits and we expect to pay for some of our children, but tuition discounts or one or two free tuitions for teachers is a wonderful thing. That said, I would like to reiterate a point I made on another thread and that is that many families (both starting out and later down the line) do not even consider the option seriously to have a parent (obviously, usually the mom) work in the day school which their children attend. I know many women who do so with great benefit to their families. If we are to assume and hope that young couples do a little math and planning for the needs their future children will have both emotionally and financially then they would be considering that for x number of years mom may have to work in the school part time. Preschool assistant, full teacher if she has the skills, gym/art/music, possible speech/OT services, remedial, secretarial. I know women who are OTs and work part time in their field of choice and part time in the school as preschool or middle grade assistants. This option is hardly ever discussed and should be considered.

anonymous mom said...

Also, and please don't shoot the messenger, because I usually trumpet the Rebbes and their importance, but how much do the Rebbes actually get paid. We general studies teachers have always wanted to know that. I see more and more Rebbes living rather comfortably and I know they have other jobs and summer work, but I do have to begin to wonder how much we are paying them if they are the sole or main breadwinners of large families sometimes living in nice (not fancy, but nice) homes. Also, since I work in a MO day school and most of the Rebbes don't send their children to our school (unfortunately) are their tuitions at their childrens' Yeshivos being paid for by our school? Just wondering if anyone out there knows.

Anonymous said...

"At what point does a day school tuition cost more than it's worth? "

I believe it is $20,000 for middle class and $35,000 for upper class

the proof is that we are already seeing resistance to the outragious prices of ptach and sinai - they charge $35,000 per year - many parents send their kids to public school at that price point

The MO schools try to force you into ptach/sinai - by throwing your child out of regular school or not accepting them

all this so they can preserve the prep school high level in their regular programs

I spoke to one parent who stated that she ruined her family's financial future by spending her home equity on three years of sinai

she is now putting her child in to public school

and YES she is Shomer Shabbos and her other kids go to the expensive MO schools

Anonymous said...

In response to the person who suggested mothers work in schools to get free tuition - If only it was that easy - Many women try to get such a lucrative arrangement - my wife tried for years - you need protecxia to get a job like that - those who get the one or two free tuitions - feel like they won the lottery

Anonymous said...

If tuitions continue to increase by 8-10% per year - then almost all MO kids will be in public schools in 20 years (with the exception of those that live in the bronx or brooklyn and the trust fund/pesach aruba people)

the chareidim will continue to send to yeshiva

and some will try to cobble together charter school/afterschool talmud torah style arrangement

Anonymous said...

I am recently married and do not yet have kids. I do remember a classmate bragging in HS that her parents did not include her moms income as a real estate agent on her application so they would be eligible for a break. How is this monitored?

Anonymous said...

I'm in my upper 20's and have spent most of my 20's living in Manhattan as a single person. All my friends have graduate degrees but living in Manhattan just gets by if you are not in finance or a high earning lawyer. Why don't we move? If you want to get married then you can't hibernate and commit social suicide. So g-d willing when they all get married, you may assume we have some savings but we don't.

JS said...

qsman,

Thank you for answering my questions.

I am shocked that you said 60% of families ask for tuition assistance. As a followup, if a family receives $5,000 in tuition assistance, for example, does that mean there is a donor who put up that $5,000? Or does the yeshiva simply have a target number for collected tuition (i.e., we need to collect a minimum of $4M, if everyone paid full we'd collect $6M, so we can "afford" to give out $2M in aid - in other words there is no donor, it's just an amount the school is willing to forgo)? Or is it some combination of the two options?

Also, how much aid is requested versus how much is received on average?

Lastly, 60% is undoubtedly very high, at what point do you see a total breakdown of the system? Also, at what point does the yeshiva say we have a serious problem? Would it be based on the percentage asking? The total amount being asked for? Or some other metric? Are there any contingency plans on how to handle such a breakdown?

SephardiLady said...

Do you see most applicants dotting their eyes and crossing their "t's" in regards to unreported income on their tax returns? Are small proprietors and those who rent out space in their home claiming everything or do you see a lot of hidden income?

Honestly Frum said...

"Lastly, 60% is undoubtedly very high, at what point do you see a total breakdown of the system? Also, at what point does the yeshiva say we have a serious problem?"

I believe that we are already there. The system is imploding and parents are being driven into financial ruin b/c of the skyrocketing costs of tuition. I believe that the yeshivas recognize that there is a problem but are hesitant to any fix that might effect and change status quo. Should people who scrimp and save for a house for the first years of their marriage be forced to use that money to pay for tuition? I know of plenty of families (and the number is growing) who live hand to mouth and in debt to pay full tuition to the schools. The problem is when we set personal budgets based on our earnings and expected raises (none for many in our community this year and I would venture to say that on a whole earnings contracted) and then we get a new tuition bill from the school with a 10% bump to the tuition and an increase to all the rest of the fees (script, dinner and building to name a few) and this does not fit into the budget. Fuel and food costs are through the roof, so where is all of this extra money supposed to come from. Who gets paid first the yeshiva or credit card company? Are the yeshivos looking at the economy when they set THEIR budgets?

Anonymous said...

There are five types of people in the system
1) The trust fund people who are very wealthy usually from parents or grandparents money. They insist on the highest level of education, amenities, security, and fancy building. They will pay full tuition and won’t feel it. They have no idea what it is to budget and they find all the talk about a tuition crisis strange.
2) Type 2 people are those who work hard and save money for a rainy day. They pay full tuition. When they get unemployed – they are told to pay down their savings until it reaches almost zero. They are even told to dip into their 401-k plan. They do not qualify for a scholarship. And since they are considered “full tuition parents” – they are rarely considered for a scholarship. They scrimp and send their kids for only 4 weeks of camp not 8. They deny their children extra curricular activities so they can pay tuition. They can not afford bar mitzva’s in Israel.
3) Type 3 people are those that spend with abandon, have no savings or are people who work off the books and know how to hide their assets. They qualify for scholarships. They send their kids for ballet lessons and dance recitals and piano lessons. The whole family goes to Israel for bar mitzvas. When it comes time for tuition – they can show no assets. (tuition paid by 1 and 2)
4) Truly poor people. (tuition paid by 1 and 2)
5) Yeshiva administrators earning $200,000 to $300,000 per year with annual raises. When you complain about tuition – they give you blank stares. They would be laid off in any corporate environment.

Anonymous said...

A yeshiva treasurer told me it was 40% that were on scholarship (that does not mean that 60% didn't apply)

Anonymous said...

yesterday's anon poster, not Qsman -

60% sounds in line with what we have seen here. in the past we have had years where as many as 80% of the students were receiving some form of tuition reduction (or other fee waivers) I would think that makes up about 40% of the families (obviously families with more kids in the system often require additional aid beyond the typical multi-child discount which is often small compared with the overall cost)

Our overall budget includes $xxx of tuition which takes into account $xxx of scholarships being granted. each $ that is granted then reduces the pool which is why we require all aid applications to be submitted by a certain date. that hopefully makes it possible to better prioritize the available scholarship $.

To decipher fraudulent applications, we use a number of methods which have been successful at "finding" hidden assets and/or un-reported income. we do the best we can, but i am sure that some fraud is still out there. we just hope that we limit that to a smaller % of the overall pool as time goes on.

I have heard from numerous families that they were surprised to not feel raked over the coals throughout the process as they were prepared for a drawn out "battle" to get what they felt they needed, and were not expecting such a mentchlech approach, nor the granting of what they received. Typically those are familiies that provide the requested documentation, and are not "hiding" anything (or at least not hiding anyhting that the committee is made aware of).

We had a family that came back after our initial decision quite a few years ago, and said, they had expected and budgeted for less aid than they were granted, and had thought they would need to pay $150/month more in tuition for their three kids. based on their situation, renting, student loans, etc. we told them that they were not expected to do that at the detriment of their families financial future (i am not sure how they were going to do that without going into further debt). they were very appreciative, and now 4 years later are in a better financial situtation and have not requested aid for next year.

The system is not perfect, and tuition committee members (and general board members) always hope that they are allocating resourecs most effectively. Believe me, there are many days and nights spent agonizing to try to close the gap of budget shortfalls knowing that families are for the most part stretched to the limit. appeals to the committee are often gut-wrenching, and do in some cases result in additional aid be granted based on circumstances. However, often what one thinks is the worst possible scenario is not that bad when compared with the sitution of other families in the school, and that is the job of the tuition committee to balance out. it is not fun, and as far as I know, NOONE volunteers to be on such a committee, and many board members will not do it even when asked as they do not want to be a part of that process.

Dan said...

There is another assumption that people are making which is not always the case.

Just because someone has a larger home or owns (occupies) a home at all, does not automatically mean they don't need a scholarship.

What if the home was purchased by parents/inlaws -- there are many people that would willingly contribute to children buying a home but would not be so inclined to contribute to their grandchildren's tuition payment?

What if the home was purchased prior to 9/11 when jobs were plentiful and the economy was steadily growing and now the couple's income has dropped significantly?

Should people be forced to sell their homes (if they even can sell it in this market undoubtedly losing some equity if they sell now), downsize, and use the balance of the proceeds to pay tuition?

What if they can't sell the home because they have a second mortgage or the title is not in their name?

Looks can be deceiving and it's too easy to make sweeping statements regarding this debacle that are too general.

qsman said...

anon@10:22
Kinda hard to hide that kind of official income on a tax return if she's an agent, and if she did she'd be caught on the W-2. And if she's unlicensed and doing it under the table, I suspect that other realtors or the state board would be all over her like it's happened here. If she's flipping properties, we've been able to fish that from public records.

js
I confirmed that 60% number last night.During the budget process, the "budget head" presents figures for expected collected tuition, expected funding from other sources and projected expenses. It's a fairly complex model from what I've seen put up on an advanced spreadsheet and charts, so a lot of work has gone into it. At that point some adjustment of full tuition and fundraising expectations are made, and for the in-betweeners, we've been phasing in smaller increases over the past few years (and an increase in the appeals made). The combination would be the correct answer to the question. Also see my note above regarding cash flow as being a possible problem to deal with.

the aid amounts - I did not track the results from last year (IMHO we should start tracking this in a better fashion). I honestly cannot answer that question accuratly at this point, simply becasue I don't have current access to the aggregate data. Most qualified people who apply receive assistance of some sort. And no, we don't sit them in a room and haraunge them.

For your last question, that hopefully will be addressed at the next post, honestlyfrum has touched on the communal resposibility issue.

sepharidilady
Some yes, some no. Most people who run a home business are looking for that tax deduction. So you have to file the tax forms, and it will show up there. Someone who is reporting $1000/year gross income on a sheitel business is either incompetent or is hiding something. For those who we have reasonable suspicion as hiding income, we assess a figure based on our estimated real income, bill it and see what happens. When the appeal comes in, we are frank in our assessment and give the person the opportunity to respond. In one case we sent in someone "undercover" as a customer to check things out both in the store and observe transactions.

To my anon "spouse", As they say in the CIA, it would be great to have some beers and swap stories, but then I'd have to kill you :(

Anonymous said...

Looks can be deceiving and it's too easy to make sweeping statements regarding this debacle that are too general.
---------

that is an excellent point that is not overlooked by those making the decisions, and is why once a decision is appealed it really is on an individual basis, and it is difficult to publish specific criteria. even with the initial criteria applied, on the surface to an observer, it may not look like family X is deserving of the amount they receive since others are not aware of all of the circumstances in each case.

I think we each need to worry about our own situation, and not think we are taken advantage b/c X who has Y is only paying $z in tuition. That said, i also think that it is more productive to let the school know if you are aware of, or think, that there is a situtation where the school is providing limited funds to a family that is "gaming" the system rather than complaining about it to your friends/neighbors, since that creates an air of distrust of the school, and doesnt help solve the situation at hand.

I am sure your school would welcome such information (i know we do) and would do their utmost to maintain source confidentiality. they may already be aware of the information, and have factored that into their decision, but in many cases this may be new information.

JS said...

qsman,

Thanks a lot. That helped clarify matters greatly.

In terms of greater transparency, I've heard of these types of issues in charedi schools. Issues of nepotism, mismanagement, etc. But, at least in the MO yeshivas near me, there are professional executives, accountants, fundraisers, administrators, etc running things. I'm sure there's some waste (there always is), but it seems highly doubtful there's something wrong on the level that would significantly drop tuition costs if rectified.

The problem in MO yeshivas near me is that there's overwhelming pressure to have the most modern, up-to-date, fancy facilities imaginable. These yeshivas have brand-new state-of-the-art buildings, various athletic courts both indoor and out, huge science and computer labs, gigantic libraries, the list goes on. I'm all for having the best for our children, but isn't this excessive? I don't know where the pressure is coming from for these types of buildings, whether it is from the yeshiva administration worried that they have to keep up with others or face downward enrollment, or whether parents are demanding it. But, either way, I think it's a chutzpah to be doing this when money is tight for so many families and already so many require assistance.

If the wealthy wish for their children to go to fancy, new, modern schools, fine. But why not have a more "modest" MO yeshiva which is cheaper? All MO yeshivas charge roughly the same, so there are no real choices (from an economicl standpoint).

What I also don't understand is while tuition goes up a bit for these new buildings, it doesn't go up as much as you'd think. I highly doubt donors are paying for the whole shebang. Would this mean tuition would have went down if the yeshiva didn't move to a brand new facility?

Just a random idea that occurred to me which would reduce costs: why not build a building that is a combination community shul and school/yeshiva? You'd have a main sanctuary for services for the community and students and classrooms and such as well, you'd also have the large auditorium many shuls have which they rent out for simchas, etc. This way you have just 1 building and thus fewer costs and more people are paying for the building as you have 2 revenue streams: shul membership + simchas and tuition + many other advantages (families who live in the community have reduced costs as well since they're not paying for 2 building funds or other fees both shuls and schools have in common).

Thoughts anyone?

Dan said...

Due to zoning and parking space requirements for shuls/schools, it is very costly to purchase land within the immediate town/vicinity of the local OOT neighboorhood.

Therefore, a shul, which requires considerably less space and parking spots (no driving to shul on Shabbos argument) can purchase a significantly smaller lot to build a shul on than a school would require.

Therefore, many schools are located within close proximity to the residential community but not directly within.

The schools seek out neighborhoods close by that are cheaper or have more properties that are zoned for schools/commercial to get the land necessary for a school but that is more affordable.

Just my 2¢

SephardiLady said...

qsman-

Have parents ever approached the school saying, we can pay full tuition but need to do so over 12 months instead of 10? Would such a parent need to go through the scholarship process because they are asking a favor?

Anonymous said...

I asked the school to pay over 12 months and was not given a problem since I was paying full tuition.

tdr said...

I receive tuition assistance and pay over 12 months. It was not even a discussion. Why would this be an issue? Because during summer months there is no leverage if you don't pay cause your kids aren't in school? I'm in Baltimore. Perhaps things are easier going here.

WannaBeChossid said...

qsman,

after reading all of this, it seems that there are a lot of blame going towards kollel families for the rise of tuition.

So my question to you is as follows, is that true in your school?

What are the income levels of people living in your community?

ProfK said...

chossid,
The income levels of people in a particular community are only valuable as a tool if you look at that income along with required outlay. What are real estate taxes like? State and City taxes? What are the prices for basic living expenses like? What is transportation like? (are cars "necessities" or is there a truly viable public transportation system available.) It's not just how much money you have but what you can buy for that money that needs to be looked at.

Just as one example, houses in New Jersey tend to be less expensive then comparable houses in NYC. Yet, real estate taxes are about 4 times as high in NJ as they are in NYC. Brooklyn has an easily accessible public transportation system as well as integrated shopping areas in residential areas--why are there so many cars in Brooklyn? Staten Island has very little by way of public transportation and what there is is way more expensive then the subway system. Shopping areas are not present in residential areas. If you live in SI you must figure a car as part of your "required" expenses. If you live in Brooklyn you shouldn't have to figure a car as a required expense. So it's not just how much money you have but where that money "has" to go that needs to be looked at.

Anonymous said...

kollel familes are not to blame - the prrof is that MO schools have no kollel familes and theri tuitions are more triple for chareidi schools

off course they have to pay for a lab a music room and all kind of other things that help keep tuition unaffordable

ProfK said...

Anonymous,
It's not just the physical plant of the school with all the rooms for "extras" that cost the MO schools. They also hire secular studies teachers who are not only college graduates but also trained and experienced in the fields they teach. Such teachers don't work for peanuts. The more to the right a school is, the less likelihood that the secular studies teachers have this type of training, education and experience. And rebbis and morahs in such schools won't accept "second class" salaries either.

WannaBeChossid said...

Hello,

so then if it is not kollel families that are the cause of the tuition crisis, what is it then? i still don't see how a tuition can go up 11k in 10 years..