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Friday, November 27, 2009

Yay or Nay? Suing to Recover Tuition Due

I had this argument in a more official fashion, but I want to hear your opinion. I'm not sharing mine right now. Should Jewish schools sue parents in beit din or court where warranted to force them to honor their (signed) tuition agreements?

Personally, I take my obligation to honor agreements very seriously and think it shameful that signing contracts and paying bills is treated by far too many people (and organizations) without the seriousness it deserves. I've written plenty about non-payment from the end of schools to vendors and employees. Now it is time to look at parents who sign contracts and don't honor them.

See the Jewish Star article here and the comments on VIN, most of which concentrate on a school turning to civil court.

25 comments:

Anonymous said...

Putting aside the issue of civil court v. beit din, if the school had a strong case, had made every effort to settle the matter (i.e. work out a payment plan based on the family's finances, etc.) then I don't have a problem with it. Based on the Jewsit Start article, it's not entirely clear to me that there was a contract for the family to pay a certain amount or whether there might have been a misunderstanding as to what the family was supposed to pay, complicated by the fact that it sounds like some of the discussions were with a prior administration and not reduced to writing. Assuming that there was a clear agreement as to the amount and the family is simply shirking its obligations (and its not just a matter of not being able to pay due to illness, layoffs, etc.) families should know tuition is a serious obligation. The school has to pay its teachers and its bills. If the suit is just going to force the family into bankruptcy and embarass them, I would be troubled.

Ahavah Gayle said...

If they don't have a written agreement, then they should not sue - they should, however, have one signed immediately. If there is one, then they should go to the bet din and if that doesn't work, civil court. The schools have to have their money, and parents are not entitled to free education for their kids, especially when they did promise to pay at least something.

Offwinger said...

I believe they not only can the school sue in whatever appropriate forum (whether it's beit din or court), schools owe an obligation to pursue these funds!!!

If not, the school is simply choosing to stick "another" party with the bill, whether it be employees, other parents, or other creditors. At best, it's hoping for more donors to cover the shortfall. More realistically, someone else gets stuck footing that bill.

Right now, far too many people believe that they can stiff schools when they don't have enough money or, worse, they enroll their children KNOWING that they can not pay what they've agreed to pay. This is not the same as the rare serious illness that throws an entire's family planning out of whack.

Let the schools sue. Let kids be kicked out for non-payment and parents be forced to reckon with their options. The shake-up might not be pretty, but at least it would force people to deal with the reality that the current model is not sustainable.

JS said...

From comments I left on another blog that cited to this article. I would only add that supposedly this family had an arrangement with the scholarship committee, per the article, and that the school is coming after them 5.5 years later. I also doubt they're suing everyone who owes them.

I think it's a scam that these yeshivas are running by telling everyone that yeshiva education is an absolute must and that public school is the way straight to being off the derech. The frum community completely stigmatizes those who don't do the Torah True thing by sending their kids to yeshiva - forget about the fact that this trend is maybe 20-25 years old and before that in this country talmud torah was the norm and even in Europe yeshiva education was nothing compared to what it was today for the vast majority of Jews. And it extends beyond 12th grade by the intense pressure to go to Israel for at least 1 year (because supposedly the education K-12 was not sufficient). And even in supposedly MO schools, they encourage kids to go for 2 years and drop their secular college acceptances and go to YU/Stern (or, if you must go to secular college to an acceptable college like Columbia, Penn, Tuoro, or CUNY).

The yeshivas (especially MO ones) build gigantic, expensive campuses that are completely unnecessary and then charge $12K-$16K for a kid starting in kindergarten with the prices just going up from there. It's just ridiculous. They don't even try to reduce costs. They have a million administrators and ruach counselors, and mashgichim, and all sorts of other unnecessary personnel. And then they ask the parents to buy raffle tickets and school dinner seats, and journal ads, and over-priced shabbatons and class trips. And, instead of using their size to purchase cheap supplies, they ask parents to spend hundreds on stupid supplies (only such and such brand or type is acceptable) the kids don't even use. And the model is that if you can't afford it, come and kiss our feet and then maybe we'll be generous enough to give you some tzedaka, you poor unfortunate person - but make sure you ask nicely.

And of course, another one of the reasons the price is so high is that they give these tuition breaks and refuse to give a break to any parent they think can afford it. So the supposedly wealthy (or those to proud to ask for a break) pay for everyone else. The schools punish those who worked hard, saved money, went to good schools, and work insane hours by charging them insane prices to make sure they have to keep working insane hours just to afford it. And God help you if some day you can't afford it, because they will kick you to the curb.

The fact that they're suing this woman is the height of hypocrisy. Either yeshiva is for everyone, as they claim, or just admit it's for the wealthy and stop with this charade that yeshiva is the only road to heaven.

The yeshivas have no money? Well, what did they do in good times? Why weren't they saving? Why were they building huge campuses with football fields and tracks and basketball and baseball fields? Why all the "smart boards" instead of chalkboards? The leaders and administrators couldn't run a business properly if their lives depended on it. They mismanaged for years and then take it out on parents who can no longer afford the schools they were told were essential.

What a crock.

JS said...

I want to add something else.

This woman is an immigrant. She came here knowing no English and washed floors for a living. I remember when I was younger and many Russian families had immigrated to America after finally being able to leave Communist Russia. Their parents spoke no English. Former scientists, doctors, and other professionals came here with no money and were forced to take any job to get by. The Jewish community opened its arms and insisted the families send their children to yeshiva. They all got scholarships. I remember many parents were upset that these people got a free ride while they were struggling so hard. But, the shared ideal was that every Jewish child was entitled to a yeshiva education. And that without this education, the kids would really be left with nothing as the parents didn't have any background in Russia.

It is disgusting what this yeshiva is doing and they should be ashamed.

tesyaa said...

What is disturbing about "tuition assistance" is that it is distributed so capriciously.

ProfK said...

We don't have all the facts in this case. Most of what was reported was "he said, she said" statements. Unless and until we have all the facts, any surmisal on our part is hot air being blown. We do not know what the contract was like between the parent and the school, or if there was one. We do not know if bais din was considered as an option. We don't know if the school spoke to daas Torah and what it was told. In short, for this particular case we can't come to a true conclusion.

If you want to debate a general approach, that is, should yeshivas sue parents who are in arrears with tuition, we'd have to know some basic facts: are the parents having financial problems now that render them incapable of paying their bill? What is their lifestyle? What was the tuition being charged the parents compared against tuition charged to other parents in the same school? Is there a signed contract?

It's nice to spout the philosophy that every Jewish child should be in yeshiva, but someone has to pay for that.

Just a thought, if a yeshiva is going to sue parents to recover what they consider owed monies, there is going to be a parent, probably more than one, who will counter sue to see the schools books and see the real financial picture. If you sue me and say I am destroying your financial stability then prove it, openly. Let me see who else owes you money, and then explain to me why you are coming after me and not them as well. Let me see what you have done to control costs. That is the real danger in going into court to recoup money--the courts can insist that the books be opened up. I doubt that a bais din would do the same.

Offwinger said...

I'm only speaking about the general question - should yeshivahs sue, whether in beit din or civil court when halachically permitted - not about this SPECIFIC case.

Here is what is relevant: Did the parents have a binding contract with the school for the tuition money owed? This can be written or in some case oral (though as an evidentiary matter, it becomes harder to prove).

Here is what is NOT relevant:
- the school's finances
- how much other people pay for tuition
- whether the school pursues everyone whose payment is in arrears

Here is what is not LEGALLY relevant, though you'd hope would be considered:
- whether some unique and unforseen circumstance has led to this non-payment

For all everyone complains about entitlement and culture, I am surprised at how many people are missing the basic fact that a contract is a legally binding promise. It is not optional. It is not subject to whether other people are living up to their obligation. It is something that the person who agreed to the terms is bound to pay.

The school owes you no obligation to give you all their data to prove that they are well-managed or to show you that they are pursuing other claims. Unless you can demonstrate that the school is coming after you for a bad faith reason (e.g., illegal discrimination or as retribution for something protected), it doesn't matter if they only go after you and not someone else. You have a contract. Pay up. Deal with it.

Sorry for the lack of general sympathy, but I have no idea how frum people got it in their heads that binding promises to pay are not binding.

Anonymous said...

I say Yes, send the parents to collections or sue in court.
The application to the private school where I work requires BOTH PARENTS to sign an agreement to pay tuition. If they get tuition assistance, they both must sign the agreement to accept it or the child is not admitted to school. When there is a change in the parents financial situation, we will make adjustments to the tuition payments if they come to the school & talk to the business manager.
Can these people just walk away from their other financial obligations?

Anonymous said...

The key determining factor here is how you would do it if someone owed you money and here's why. Schools don't have money. They only have the ability to collect monies from the group. Therefore, if they "forgive" Mark's obligations, what they are really doing is just demanding that the rest of the group pick up the slack.

So when framed that way, do you want to pay for this family that has not done their part of their deal? I don't think the school should be allowed to NOT sue. Barring any change in circumstances that generate additional scholarship financial review, it is unfair (though short term easier) for the school to just pass the additional cost to the other parents, but it's wrong.

As it is now, schools are frequent to be generous with scholarships, which is ulimately at the cost of other parent's money.

Let me raise the offer, if someone is on scholarship and then gets a raise / better job, or it becomes known that the family is spending funds on elaberate overseas vacations does the school need to do a mid-year scholarship needs assesment?

Tough stuff. No school wants the reputation of being tough on the needy. But then again, it is the inverse of the case being discussed. When the school is spending other people's money, do they do the hard choices or continue spending?

rosie said...

I don't think that the families that are being sued expected that to happen. I think that the yeshiva should have made it clear in advance that they used aggressive means to collect debts. Many families do exhibit a casual attitude about tuition payments and some are asked at the end of the year not to send their children back. It is obviously the menchlich thing to do to inform the yeshiva about payments that will be late and explain what is being done to meet the obligation. It creates misunderstandings when parents treat the matter as if it doesn't exist. People might sign an agreement at the time when they have the money and then if something negatively affects their income, they can no longer pay. It doesn't mean that they are irresponsible advantage takers. People ought to examine the contract before signing because some schools have clauses allowing the school to expel a student and still collect tuition. It is better to have the clause removed if the parents are not in agreement.

Orthonomics said...

Offwinger: they enroll their children KNOWING that they can not pay what they've agreed to pay

This is so true and a friend of mine told me when the going gets rough, you just throw up your hands and the school will have to help you.

I cannot speak at all to the HAFTR case, but in general it is obvious to me that many families don't take their obligation to schools, camps, and pre-schools with any seriousness. They sign on the dotted line and lack of finances doesn't give them pause. Many organizations end up pursuing these bills into the future and it isn't right.

ProfK they enroll their children KNOWING that they can not pay what they've agreed to pay

That is why I'm not discussing this case. But on that note, I will say that it must have taken some active board members to move mountains and bring families to court. This isn't the normal way things have been done. That I know! I have to believe that the school has a strong and documented case because this simply wouldn't happen on any board I've served on. (But, perhaps I'm projecting).

Just a thought, if a yeshiva is going to sue parents to recover what they consider owed monies, there is going to be a parent, probably more than one, who will counter sue to see the schools books and see the real financial picture. If you sue me and say I am destroying your financial stability then prove it, openly. Let me see who else owes you money, and then explain to me why you are coming after me and not them as well. Let me see what you have done to control costs. That is the real danger in going into court to recoup money--the courts can insist that the books be opened up. I doubt that a bais din would do the same.

There are NO legal grounds for the parents to counter sue to see who else is or is not being sued. Nor are their legal grounds to make a school come after everyone who owes money.

Businesses write off accounts all the time while going after other account holders. That is business. The school must have a reason they are going after the parents they are pursuing. If not, they are wasting their money.

Offwinger I am surprised at how many people are missing the basic fact that a contract is a legally binding promise. It is not optional

Exactly: you sign on the dotted line, you pay up! If you haven't paid up when your kids leave school, you keep paying until the bill is gone!

rosie I don't think that the families that are being sued expected that to happen. I think that the yeshiva should have made it clear in advance that they used aggressive means to collect debts.

I'm fairly certain that the schools do normally reserve the right to pursue the legal obligation in the contracts.

As of now, I know of few organizations that have followed through. I think you are right that no one expected to be sued. I guess we are seeing a change from business as usual.

JS said...

I'd like to clarify my comments above.

This specific case seems egregious given the fact that the school is going after them 5 and a half years later and the woman claims to have had an understanding with the previous administrator. It also seems terrible given the fact that she is an immigrant, didn't speak a word of English, and washed floors to afford living expenses.

Even if she really does owe the money, the school couldn't have picked a worse person to go after. They want to collect money owed to them, fine. I support being responsible for one's debts and taking seriously financial obligations whether to the electric company or one's shul. And I agree that far too many do not take these obligations seriously which hurts us all. That being said, the schools or shuls need to be very careful in selecting who they pursue and differentiate between the genuinely poor and those trying to game the system.

In general though, what bothers me the most is that the system (community pressures and norms) are set up to encourage people to sign on the dotted line knowing they can't pay back due to the pressure to conform, pressure to send to yeshiva, stigmatization of sending to public school, and the overall philosophy of the community reiterated time and again that no one will ever be turned away from a yeshiva or cast out of a synagogue for inability to pay.

When faced with all of this pressure and a true feeling that sending to public school, for example, will end in horrible consequences for your children (going off the derech, hurting shidduch chances, getting dirty looks, etc) the system doesn't leave one with much choice but to sign the contract and throw yourself on the mercy of the community.

If the community isn't willing to step up and help these people it needs to affirmatively say it will not help and that parents who can't afford it should look elsewhere. Consequently, the community needs to not stigmatize such people.

At the same time, it is disgusting to push so parents into debt and create so many cases of parents unable to pay and/or forced to beg in front of the tuition committees when the schools do absolutely nothing to rein in costs. It is beyond obscene for a school to ask for $12,000-$16,000 (as MO schools ask) for a child entering kindergarten when a big reason for that cost is that the schools are mismanaged, waste money, and build gigantic campuses that waste donor dollars and require tremendous resources for upkeep - oh, and then tack on "add on" costs like raffles, dinner obligations, journal ads, etc.

Offwinger said...

JS,

I think the points you raise are legitimate ones. At the core, I think the obligation must first fall on the individual to be responsible, though, and only then, can anyone expect to effectuate communal change. I can't agree with blaming some amorphous or monolithic "community" for selling people a false bill of goods as a way of excusing lack of personal reponsibility, even though I agree with you that the leadership and norms of the frum world do seem to have forced families into a Hobson's choice regarding chinuch.

I think what your post is really getting at, especially to the extent you raise the high cost typical of MO schools, is that the Orthodox community has set up the expectation that we must be *wealthy* to be good Torah Jews.

In another thread, someone mentioned how not earning $250,000 led to functional poverty. It *pains* me to see people toss around the term poverty so casually. Earning a 6 figure salary, let alone 2 of them, is not necessary to avoid poverty! Being shomer mitzvot also is not that expensive! So, as this blog has addressed time and time again, what is the real issue here???

It's that people want to believe that they can live a Torah true life that is *guaranteed* to be upper-middle class, at a minimum. Marry as young as you like, prior to being able to earn income, expunge some student debt or save. Have as many children as you like, the more the merrier. Home ownership in a "nice" neighborhood in a home big enough for your large family. Nice furnishings. Nice clothing. Multiple vehicles. Private school education for all. Vacations from time to time, including trip(s) to Israel. Lavish affairs for all (bar/bat mitzvahs, weddings). The ability to eat out frequently. Sleep away camps for everyone. Etc. The list is so long that people who think they've cut back on a few of these items believe that they are truly "sacrificing!."

This idea that our entire community can and *should* be wealthy is the lie. The lie being exposed now is not, "Hey, yeshivah education is so important that we'll never let you fall through the cracks, even if you don't have any money." The lie is that EVERYONE can either achieve this comfortable lifestyle (that in previous generations we'd see as flat out affluent!) or can *choose* to opt out and be supported by others who do follow the path.

It is not obscene for schools to ask for $12K-$16K for a private school education, when this is comparable to other private schools that appeal to wealthy families.

It IS obscene for people to be told or to feel that to be part of the community, they must be able to *afford* $15K per child, per year, and if they can't, well, then, they must sacrifice their dignity, because they are "too poor" to do what everyone is expected to be like.

Anonymous said...

Sorry for not being clearer about 250k to avoid poverty. In the MO community in Northern NJ, we are raising families of 3-5 children and the living standards of private Jewish school and Jewish neighborhood housing has created a situation where virtually 200- 250k income is necessary to pay the basics. Not poverty but no retirement, no vacations, very very little restaurants. It might be ok in some people's mind that scholarship becomes a necessity for many (do the math especially at the high school level), but the community leadership is not honest. The fact is that not every family will bring in that income forever. Maybe not in today's economy or maybe never in the younger generations' careers.

It doesn't have to be that way but the infrastructure (costs + scholarship needs + subsidizing inefficiencies) in the schools mandate tuitions of 14k elementary (average) and 22-25k for high school per year.

Tuition is the elephant herd in the room. All other financial planning and advice is far smaller on the budget.

rosie said...

Offwinger, you left some obligations off your list such as giving big to every cause, having lots of guests and feeding them the finest, giving nice gifts to every baal simcha, sending a tray to everyone who sits shiva, cooking for every new mother, come on Offwinger, we just got started!
I think that most of the frum world has post traumatic stress from all of this. I have a feeling that the next generation will make different choices.

Anonymous said...

As a regular lurker-reader of this blog, I am in general very much in the "take personal responsibility" camp.

However, from personal experience, I have to lean toward JS's take on this:
- In essence, my local Rosh Yeshiva / Rav make it clear that educating my children anywhere but their own affiliated institution is unacceptable (yes, there's only one Orthodox school in town) - and let's not blind ourselves to the consequences of not toeing their line (shidduchim and so on).

- Yet when tuition time comes, in my responsible way, I showed the administration very clearly what we can afford to pay (and we do NOT live luxuriously, and we have provided WAY more than the difference in extensive volunteer efforts)...yet they insist on being promised a higher number...so yes, we've signed on the dotted line for more than we can afford to pay for years, and we are officially behind.

- So the same group of people are essentially putting a gun to our heads saying, "we will ostrasize you if you don't agree to be indebted to us".

- My only consolation is that it's rather unlikely that there would ever be a lawsuit attempting to collect my accomulating indebtedness...as alluded to by others, we know too much about what goes on inside the institutions.

I wonder whether this family was targeted because they are relative outsiders and the school doesn't have much to risk due to their paucity of inside knowledge.

Miami Al said...

Offwinger, you hit the nail on the head. Basically, as the upper middle class Orthodox community moved up, they moved the expectation up. It should be acceptable to be poor and Orthodox. Your children might get free tutoring in Judaism from the Rabbi once/week with 40 other kids, instead of a day school or Yeshiva education, a small fund to provide you with meat for Shabbat might be needed, etc. You might be living in a trailer park 2 miles from Shul, etc.

However, as we've decided that everyone should wear the same clothes, attend the same Shul, and attend the same school, we've created a system where the majority cannot afford things, but since they are the majority they simply demand it and demand that it be funded by a smaller and smaller group.

$16k for provide school for upper middle class modern Orthodox Jews seems reasonable to me, the Day Schools are about 20% cheaper than the prep schools in the area, and family sizes are probably 30% - 40% bigger, so this all seems reasonable.

What isn't reasonable is offering a $5,000 education for $16,000, because you only collect $8,000/student in tuition dollars, and $3,000 is wasted is excessive administration and wasted resources that is untouchable because of "dual curriculum," whatever the hell that means. Secular principals are expected to handle running a school that include arts, dance, music, mathematics, science, history, literature, foreign language, philosophy, etc., but somehow a Day School educational administrator can only handle half the subject matters.

We don't have a dual curriculum, our foreign language is Hebrew, our random elective is Jewish in nature, and we have 1-2 more "Judaic" classes, we do NOT have two curriculums.

Miami Al said...

Offwinger, you hit the nail on the head. Basically, as the upper middle class Orthodox community moved up, they moved the expectation up. It should be acceptable to be poor and Orthodox. Your children might get free tutoring in Judaism from the Rabbi once/week with 40 other kids, instead of a day school or Yeshiva education, a small fund to provide you with meat for Shabbat might be needed, etc. You might be living in a trailer park 2 miles from Shul, etc.

However, as we've decided that everyone should wear the same clothes, attend the same Shul, and attend the same school, we've created a system where the majority cannot afford things, but since they are the majority they simply demand it and demand that it be funded by a smaller and smaller group.

$16k for provide school for upper middle class modern Orthodox Jews seems reasonable to me, the Day Schools are about 20% cheaper than the prep schools in the area, and family sizes are probably 30% - 40% bigger, so this all seems reasonable.

What isn't reasonable is offering a $5,000 education for $16,000, because you only collect $8,000/student in tuition dollars, and $3,000 is wasted is excessive administration and wasted resources that is untouchable because of "dual curriculum," whatever the hell that means. Secular principals are expected to handle running a school that include arts, dance, music, mathematics, science, history, literature, foreign language, philosophy, etc., but somehow a Day School educational administrator can only handle half the subject matters.

We don't have a dual curriculum, our foreign language is Hebrew, our random elective is Jewish in nature, and we have 1-2 more "Judaic" classes, we do NOT have two curriculums.

HearingLawyer said...

"There are NO legal grounds for the parents to counter sue to see who else is or is not being sued. Nor are their legal grounds to make a school come after everyone who owes money."
-SL

SL, just to give you some legal insight, the defendant would not actually need to countersue to try and get this information, they could simply seek it in discovery. While I hear why you might think it is irrelevant, in my experience (as a bankruptcy lawyer), a good (even decent) lawyer should be able to convince a judge to compel the school to give the defendant this kind of information, as it is very closely related to the underlying claim in the lawsuit. Put another way (and I think this is what ProfK was getting at), by suing a parent for unpaid tuition, the school is potentially opening a serious can of worms as to how their finances are run.

Hope that helps.

Miami Al said...

HearingLawyer, given that most of these schools are 501(c)3s with relatively open books and a non profit charter, it'd be hard to explain to a judge WHY these must be kept secret.

We like to violate Federal anti-discrimination law and generally accepted business practices, plus we collude with our competition, is generally a weak reason for keeping what is nominally public financials private as a secret.

Anonymous said...

Hearing Lawyer, Miami Al and ProfK: Even if a judge would allow the type of discovery you are suggesting (and I think its very questionable) explain how this family is going to pay for a lawyer to engage in fights over what discovery is appropriate and to review and try to use all the information to mount a defense? While it's possible that this family might be able to get some pro bono representation, chances are they will be going it alone.

HearingLawyer said...

Miami Al-
I don't disagree with you that, as a general matter, the information should be made available. All I was trying to explain is that, as a litigation matter, once the issue of tuition (non)payment is brought into question, the defendant should be able to force the school to disclose the info.

Anonymous-
Again, I don't disagree with you about the parent's wherewithal to push back on the school on court(and that may be part of the school's risk management decision in deciding to sue), I was just responding to ProfK's assertion that the school faced this risk in bringing the lawsuit. I will tell you that, in my experience, there is a very good chance the judge forces the school to disclose the info to the defendant if they ask for it.

MiMedinat HaYam said...

isnt this the same yeshiva that refused to pay a psak (= order) of a bet din it agreed to, and then filed papers in (secular) court opposing a bet din of their own choosing?

so why are we demanding they go to a bet din!

(i was actually going to comment that, unfortunately, no one follows a bet din today. but then i realized this is the same yeshiva that did the above!)

Ahavah Gayle said...

To Anon Nov 29th, 7:02

The readers of this blog seem to be mostly LWMO or moderate MO. They really don't understand that For most UO or Chereidi Ravs, In-Laws, and even your own parents, you and your family, even your kids, will be completely ostracized if you put your kids in public school.

That means you have to make hard choices - and most people are simply too afraid to pull up stakes and be cut off from their community, family and old friends. The only real option when given such an ultimatum is to move to a new community or to go broke and end up signing contracts nobody can afford.

For the LW or Centrist MO crowd, though, they choose to try and run with the "big boys," figuratively speaking - wanting to fit in with Chereidi and UO expectations though their specific shul or Rav may not require it. They are simply making poor choices, but many do find themselves baffled as to how to get out of it gracefully. In reality, there is no good way to do it. If they tell the administration they're taking their kids out to go to public school, they will again be shunned by most of the parents of their children's friends and peers. Nobody wants their child influenced by a public school kid. So it'll still be painful, though not a complete upheaval because they won't have to change shuls or ravs or move. For the Chereidi or UO communities, such is not an option. It's either private school or lose everything - most UO Ravs don't like homeschooling, either, because they want control of the youth's education.

But I assure you there are plenty of families who have moved away and still live faithful, fulfilled and observant Jewish lives. It can be done.