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Sunday, February 08, 2009

Tuition Won't Decrease/Stabilize Until. . . . . .

You fill in the blank!

I have it on good word that some camps have decided not to increase prices for this summer. I also have it on good word that there are pre-schools that are not going to increase tuition either.

There are private schools that are stabilizing tuition. There are non-Orthodox schools lowering tuition across the board . MominIsrael kindly pointed me to another article about two more non-Orthodox school in the Philadelphia area that are offering large tuition reductions regardless of financial need, but only for new students. This aggressive program is being headed by a new foundation, the Kohelet Foundation. The Kohelet Foundation appears to be looking to offer similar incentive programs in all schools. To qualify for funds, a school needs to submit a 10 year plan and give a summary of how the plan will impact "one or more of the following overall objectives: (a) growth in enrollment; (b) economic efficiencies; and (c) improvement in quality." I have no idea or not if the tuition subsidy programs that non-Orthodox schools are rolling out thrive in the long run. But it is obvious that these schools are making every attempt to compete in the face of shrinking enrollments and a down economy.

I have yet to hear about an (Orthodox) school that has not raised tuition. Some schools I have been tracking raised tuition a lesser percentage than in previous years, throwing my prediction of what tuition would be off by a few hundred dollars (I wish my predictions would be off by a few thousand dollars). Sadly, tuition rates for middle school and high school have climbed so high that at this point I don't really think that it matters to me if they raise tuition in coming years by 0% or by 50%. We have officially been priced out.

Why is it that camps are stabilizing prices and offering incentives to get parents in the door, while schools continue to operate like it's business as usual? I think the answer is simple! Camps, pre-schools, and private schools know that parents have alternatives and realize that they need to be competitive. In some cases, this may be a new realization, but nonetheless the realization has set it.

Orthodox schools I believe still believe they have a captive audience and despite talk in the blogosphere about things schools might want to consider, e.g. ProfK's latest posting "Yet Another Schooling Option" which is another variation on the cheder model," the schools aren't going to start experimenting with these ideas until/unless they believe that parents have become price sensitive. And, at this point, I think the schools have good reason to believe that Orthodox parents are not yet price sensitive.

Chime in please.

21 comments:

ProfK said...

It will be interesting to see the yeshivas' reactions when they are faced with the following: 1)some of their regular donators are not going to be able to give the schools anything; 2)some of their regular donators are going to be cutting the amount they donate;3)larger numbers of parents who paid full tuition will not be able to do so, some because of job loss, some because of salary cuts, some because the raise in tuition, no matter how "small," is beyond their ability to pay; 4)larger numbers of parents who are already receiving tuition assistance will need larger amounts of that assistance for some of the reasons given in #3 and/or because they have another child going into elementary school or another one going into high school, where tuitions are higher. A friend who is in school administration mentioned that the class due to come in to the pre-school grades next fall is larger than the eighth grades that are graduating. That means there will be, at least theoretically, more children next fall to be educated using far less money. Even the yeshivas cannot play blind man's bluff forever.

Sadly, I can see the yeshivas battling tzedaka organizations for the few discretionary dollars that will be around, rather than facing the fact that they need to change and do so asap. No one is going to win until the yeshivas face financial facts.

Ezzie said...

Was talking to my sister and brother-in-law about this last night. (Sis is on admissions committee at a school.)

The general consensus was that schools and parents need to essentially strike a compromise: Schools will demonstrate clearly how much it costs them per student to run the school (showing all fixed and variable costs of the school), and then charge a set tuition around that number (one can argue for just higher to ensure covering costs or just lower on the assumption that there will be at least some fundraising) that is non-negotiable.

This would solve problems on both sides: Schools would no longer be able to waste money as the parents would be able to see this, and complain about having to pay for it; this would in turn keep costs - and tuition - low. On the flip side, schools wouldn't be asking some parents to pay even more to make up for those who cannot pay, and the lower tuition would hopefully be affordable to all. It would also force everyone in the community to be more conscious of their finances and to not waste money, knowing that a shortfall due to lack of savings would mean no education for their children.

Finally, since one can argue that there will always be a very small number who cannot pay due to no fault of their own and who do budget their expenses properly, there could be an *extensive* application for financial aid for such people that would literally go through every dollar the family spends.

David said...

Kohelet Foundation here. We're running tuition incentive programs at Orthodox schools as well: Abrams Hebrew Academy in Yardley and Torah Academy in Philadelphia. We're looking to run them at other schools besides these, even outside the Philadelphia area, if there is local support for the programs.

SephardiLady said...

David-Can I trouble you for a guest post? I'd specifically like to know what Orthodox schools can do to meet those requirements on your website, ie. (a) growth in enrollment; (b) economic efficiencies; and (c) improvement in quality.

My email is at the top of the blog. I am always seeking guest posts.

JLan said...

"Schools will demonstrate clearly how much it costs them per student to run the school (showing all fixed and variable costs of the school), and then charge a set tuition around that number "

The general rule of thumb is that the salary of a full time teacher is roughly tripled for full costs (including administrators, maintenance, etc).

A school with 70 full time teachers with an average salary of $60,000 each would have an average yearly budget of $.12.5 million.

If the student:teacher ratio is 5:1 (very good), then tuition should be $36k. If it's 10:1 (good, better than public school average), then it's $18,000/kid. And at 15:1 (equivalent or lower than public school average), it's $12k.

This is, obviously, a very rough estimate, but it tends to be around actual spending levels.

Anonymous said...

Finally, since one can argue that there will always be a very small number who cannot pay due to no fault of their own and who do budget their expenses properly, there could be an *extensive* application for financial aid for such people that would literally go through every dollar the family spends.

Who exactly would do this? Would they do it for free? And would their own biases potentially get in the way?

Mark

G said...

Tuition Won't Decrease/Stabilize Until. . . . . .people embrace capitalism.

Why should a school stop asking for more until people stop paying it or organize an alternative option.

Honestly Frum said...

I believe the Yeshivos need to make cuts, drastically reduce their overheads and consolidate. If not most of them are not going to be able to survive these next few years. It is going to take something drastic, like hundreds of parents sending their kids to Charter Schools or public schools for the Yeshivos to wake up. There was a meeting in Englewood about a Hebrew Inclusion Charter schools and nearly 400 people, mostly yeshiva parents showed up. Old methods and old administrators need to be replaced with forward thinking people. What worked 10 years ago does not work today and if the Yeshivos do not see that then perhaps they deserve to meet the fate that will befall them.

JLan said...

I still want to see someone explain to me where significant cuts can be made. Keep in mind that, especially for the high school level, students may have an equal amount of general studies subjects to what they would have in the public schools, plus the limudei kodesh teachers. Even if you keep class sizes at the same level as the public schools and even if the teachers get no tuition break at all, where is the money coming from to pay those additional teachers?

SephardiLady said...

JLan-I still have not bought into the argument that orthodox schooling is inherently more expensive than pulic schooling. I'm sure a post on the matter would be explosive to say the least. I've been promising LOZ a post for the longest time. I will see what hole I can dig myself into.

JLan said...

SL-

I'd really like to see proof of that. Even if orthodox schools don't have the special needs kids of the public schools, they have more in-school time and therefore need more staff. That leaves one of two options, unless you've found another I've never heard of: either significantly lower compensation for salary and staff than public schools or a significantly higher per student cost for Orthodox education. This is, of course, presuming a day school model: if we look at a talmud torah model, then the Jewish education cost will be lower, but obviously the total cost per student is still more expensive than public schooling because it's an add-on to the public schooling.

JLan said...

SL-

I'd really like to see proof of that. Even if orthodox schools don't have the special needs kids of the public schools, they have more in-school time and therefore need more staff. That leaves one of two options, unless you've found another I've never heard of: either significantly lower compensation for salary and staff than public schools or a significantly higher per student cost for Orthodox education. This is, of course, presuming a day school model: if we look at a talmud torah model, then the Jewish education cost will be lower, but obviously the total cost per student is still more expensive than public schooling because it's an add-on to the public schooling.

mslitt said...

Perhaps the local Orthodox schools could take advantage of the public school systems for the general education portion of the day? Join the PTA to make sure there's nothing antithetical to Judaism being taught?

JLan said...

mslitt-

That's been suggested, and in some regards isn't entirely dissimilar from the charter school model. There are, depending on community (which may see them as less or more severe), three issues with it:

1) It puts the Orthodox kids in with non-Orthodox and non-Jewish kids, along with non-Orthodox standards of dress. This one in particular is going to be more of an issue in right communities.

2) School day length. In order for the public school bit to work well, the school has to let out pretty early, essentially removing almost (if not all) break times, free periods, etc. That doesn't seem to be likely in most districts.

3) Timing: A student who has been in school for 8 hours or more reaches a point where they don't learn well. That could create problems for the teachers of limudei kodesh subjects, who will be dealing with their students at the en dof the day.

Dave in DC said...

We phrase most of our angst around cost and affordability, but I think what we're all really after is sustainability. We don't want the schools to price themselves below the rate required to provide a high-quality Jewish and secular education, and we don't want to prevent any family who wants day school education for their kid from getting one - at least not because of price. This is the fundamental Orthonomic paradox for which all other financial priorities need to bend. If the Kohelet foundation's enrollment/efficiency/quality gains are the magical way to cut this Gordian knot, then they should receive all accolades, but until there's systemic leadership and change on these issues, I doubt it will be enough.

JS said...

I think one of the bigger problems, at least in MO yeshivas, is the fact that the schools just don't get it. They keep building bigger, fancier facilities with more and more extravagances. Frisch recently built an entirely new campus. See a picture here:
http://www.frisch.org/Content.asp?Id=31

Is this really necessary? A track? Outdoor basketball and tennis courts? The old building wasn't anything to look at, but it wasn't falling apart or unusable. It simply wasn't fancy.

Also check out the donations they're still looking for:
http://www.frisch.org/Data/UploadedFiles/Free/Dedications_428_173.pdf

Gives you a sense of how much this campus has that is unnecessary.

God knows how much this cost, but it's all being passed on to the parents. See here:
http://www.frisch.org/Content.asp?Id=11

Tuition is $20,750 plus you have fees of $2,150. There is also a one time $5,000 bond due per family to pay for the new building.

I'm sure this cost could be lower without the fancy building.

JLan said...

"I'm sure this cost could be lower without the fancy building."

That's possible, but I wouldn't be so secure in that assumption. A lot of the time new buildings are in part because someone wanted to donate a lot of money so that a new building could be built and so that they could put their name on it. Then the facility puts together a ton of naming gifts: every room, office, etc is named, the mezuzot are dedicated, the books are in memory of someone, the toilets are graciously donated, etc. (Incidentally, while I don't know of any day school that actually has had toilets with a naming gift, I went to a college where the toilets in the basement of the library had "Your refreshment is provided by...". The donor owned a plumbing conglomerate).

Case in point: I work at a school where we recently installed smartboards in every room. Could they have done this cheaper? Certainly. Heck, install a projector in each room (which they did anyways), provide a wireless keyboard and mouse, and you have a lot of the smartboard functionality for a lot less cost. But someone wanted to pay tens of thousands of dollars for smartboards and wouldn't pay it for any other causes, so hey, we bought smartboards.

The danger comes when the naming gifts aren't substantially filled. That can be a big issue. But overall, building costs as a function of tuition are often less than they might seem. The only alternative that I might be able to see would be offering scholarship naming gifts, which it seems to me would be very uncomfortable for a number of people.

Anonymous said...

JLan - Timing: A student who has been in school for 8 hours or more reaches a point where they don't learn well. That could create problems for the teachers of limudei kodesh subjects, who will be dealing with their students at the en dof the day.

It can't be that bad because almost all schools have mishmar at the end of the day and schools with dormitories (like MTA where I attended) have night seder after school (and after dinner).

Also, our local school (where my children attend) have the year split into two - the first half of the year, they learn limudei kodesh in the morning and limudei chol in the afternoon, and for the second half they reverse that.

JS - I think one of the bigger problems, at least in MO yeshivas, is the fact that the schools just don't get it. They keep building bigger, fancier facilities with more and more extravagances. Frisch recently built an entirely new campus.

This is a big problem, but only part of the problem.

JLan - A lot of the time new buildings are in part because someone wanted to donate a lot of money so that a new building could be built and so that they could put their name on it.

This is almost always true. Someone donates a bunch of money to build a new building which usually gets named for them. And sometimes even an entire campus gets named for the person that donates a large amount, say to pay off the mortgage balance. But that isn't the only issue - even if someone pays for the building, there are still plenty of expenses related to furnishing the building and maintaining the building. I know of only very few cases in which a building was paid for and the maintenance was paid for by the same person.

Almost every new large donation brings with it additional recurring expenses. Those fancy electronic boards? Yes, they need the services of a qualified IT person relatively often. That costs a heck of a lot of money each year. And sometimes they break and need to be replaced. I might (might? ha, definitely is more like it) sound old fashioned, but really, what was wrong with the regular chalkboards that we learned with when we were kids?

Mark

Anonymous said...

as a parent of frisch kids, yes tuition is expensive, but having a great gym, track, outdoor bb is something high school kids want and most MO parent want their kids to have
the old school was too small and was a dump.
yes its more money, but we want torah u madda. we like having coed classes. we like having lots of sports and we like our kids learning science and math and history and even hebrew language
persoanlly, i miss the days in the 70s when we had cheerleaders in school who wore skirts and showed their legs.
the fact remains is that there is demand for MO schools out here in teaneck, ir hakodesh -as the kids from ramaz call us.
ramaz lost kids to SAR and to frisch and now they offer scholarlships
competition is a good thing you get a better product becausde of choice.
kids who would have gone into the city for ramaz or SAR and pay more than 20k not including the busses are going to frisch and it cost us the paretns less.

Anonymous said...

btw some of my kids went to ramaz as well and because of the improvement in frisch, my kids decdied to go to frisch intstead of shlepping to the city. its easier on me not to have to drive in whenm they stay late and it costs me less too

Anonymous said...

my kids school has for the first time in many years NOT raised tuition for the upcoming school year. They also moved the registration deadline up, so they have more time to assess class size, and if necessary adjust the number of classes rather than having half empty classes. They saved over $10k last year on paper and printing costs by moving to an email platform for distribution of school notes, class materials, etc. $10k isnt that much, but when added up with the other changes that have been working on, certainly helps with their ability to hold tuition at this year's level for the 2009/2010 school year.