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Sunday, March 21, 2010

Overly Invasive?

The Wolf has a post up asking for reader opinion on whether it is overly invasive for a Yeshiva to ask for 3 months of bank statements and credit card statements in conjunction for application for a scholarship?

There is no question in my mind that the reason that an unaudited Balance Sheet and Income Statement won't suffice is that too many parents have, unfortunately, proven themselves to be untrustworthy. I can understand why parents paying full tuition are at the point where they want the scholarship committee to really do their homework, and this is one way of pulling information that might be omitted.

That said, I have to say that the way many a regular, perhaps even almost full tuition paying parent is being treated is despicable. While certain parents seem to have their scholarship handed to them on a golden platter, I know other parents who have basically been racked over the coals. Perhaps they shouldn't dare fly the kids down to see the grandparents while applying for a scholarship, but I simply don't see the same scrutinizing happening across the board. I can't imagine that the level of scrutinizing that the Wolf's bank and credit card statements will receive will be the same as someone else with more standing. While the Wolf worries about the $15 he might spend in a 3 month period at the florist, I see certain families that are on extremely significant reduction (perhaps even full reduction), and perhaps have other communal assistance, buying flowers on the way out of the grocery regularly.

Part of why I am more than ready to say, enough, when school tuition becomes unmanageable, is because I don't want to harbor ill feelings against those who indulge in small luxuries while in all of our years of marriage haven't even spent $5 on flowers (although I'm thinking of having the kids make some silk flower arrangements this summer to dress up the table a bit). It is very unbecoming and lacks tzniut to be scrutinizing every transaction our neighbors/students make (which is far different than examining social trends). If a parent body simply can't be trusted (and that is likely the case, because this type of process is bound to be very labor intensive when 50% + of the parents are applying for reductions) then I think it is time to revisit the entire tuition structure, from pricing to the scholarship process.

Additionally, I think it a terrible practice for parents to turn over sensitive information. What we define as sensitive is perhaps in the pudding. But most of us could probably agree that turning over bank statements and credit card statements detailing all sorts of financial transactions is over the line. Remember, these aren't be turned over to an outside agency with super duper insurance, regular reviews of internal control procedures, internal auditors, external auditors, and managers that won't be afraid to have an investigation conducted on the premises when (yes, when) sensitive financial information is leaked. This is being turned over to school administrators and people in your community who might not even think to lock the file cabinet. Also, many schools have provided all the students with the code to get into the back door. While I have yet to hear of information leaking (truly is truly impressive indeed!), I'm not one to take chances. I've had too many account numbers compromised and at this point I'm definitely very cautious regarding issues of personal identity.

I'm not quite sure what the Wolf can do as an individual besides 1) pay full tuition or 2) pull his kid out of this school. So I really don't have any answers to his personal dilemma except to say that, yes, it is overly invasive, although not without reason, and gives me more reason to believe that the pricing structure, from cost to scholarship, just isn't working and that parents need to speak up despite the risk that opening your mouth carries.

39 comments:

tesyaa said...

There are plenty of good comments on Wolf's thread, but an additional point. I'm always surprised when I hear people talk about tuition assistance as an ongoing need, not just an emergency or occasional need. If you can't afford your kids' education, it's time to look for cheaper alternatives. That might just mean a cheaper yeshiva in a different borough, or it might mean homeschooling or public school with a tutor. It might mean a second parent working more hours. Regardless of the fact that tuition is ridiculously expensive, people should take responsibility for their lives.

Especially in the case Wolf describes. If he could somehow manage without assistance when he didn't fill out the forms, maybe there would be other ways to manage without requiring charitable assistance in the future.

Anonymous said...

1) Eliminate scholarships, 2) Reduce tuitions by a third 3) open chareidi school in modern orthodox areas like bergen county to supply very low cost yeshiva education - this way no child will be denied a jewish education 4) encourage charter schools based on the florida-wexler model (not the brooklyn-steinhart model)

Anonymous said...

I don't think it is unreasonable to request the bank and credit card statements as a way to confirm if the information on the tax returns accurately reflects the
family's finances. However, the account numbers and sensitive information (i.e. names of doctor's offices) should be permitted to be blacked out first.

With respect to the potentially lax privacy procedures and protections at some private schools, they should know that they are not exempt from the new privacy rules (i.e. the FTC's red flag rule) and the new statutes/regulations in many states (i.e. the Massachusetts data privacy regulations) that recently went into effect. Those rules require things like written policies and procedures to protect confidential information, encryption, locking file cabinets and never leaving documents with certain types of data unattended on a desk.

Anonymous said...

The system is messed up - Lets have affordable yeshiva tuition and NO scholarships - it will get rid of the degrading and intrusive process and have affordable tuition for all in the form of much lower yeshiva tuitions. people will be able to afford more than two children and Am Yisrael will grow. There should be one low cost brooklyn/lakewood style yeshiva in every community so that no child is denied a jewish education if they are truely poor

Miami Al said...

Beyond that, what they will scrutinize is the silly stuff, instead of the real things.

Overpay for your house and cars, you're in the clear. Bought a MUCH smaller house so you pay $500/mo less, but you buy your wife $500/year of flowers, you have luxuries, and luxuries are prohibited.

With half the families on scholarship at most schools, it means that the scholarship committee decided where the small amounts of disposable income of half the community goes.

This is insane and immoral.

Upper West Side Mom said...

Unfortunately many parents who apply for scholarship are totally dishonest. A request to see bank account and credit card info is a legitimate way to see how much money each family has and what they are actually spending it on. All you need to do to ensure that no personal info gets into the wrong hands is black it out.

Yesterday I found out that a family who is on scholarship has a child enrolled in a gym class that cost $1150 for a year worth of classes (2 semesters at $575 each.) This information would be available to the school if they checked this families credit card statements.

I think if people were asked for sensitive, personal information when they applied for scholarships you would see an immediate decrease in people who apply for scholarships. Magically, many of these people would find a way to pay full tuition.

mchast said...

Here is a possibility that I wonder about: Simply tell the schools, this is how much I can afford, take it or leave it. Given the financial situation of most day schools, they ought to realize that any amount of money for an extra child will help them (economies of scale). They might refuse on principle, which I could understand, but if they are desparate (and from what I've heard, most of them are), they might take it.

ProfK said...

Yes, taking a look at credit card statements might keep some people honest whose tax papers are not showing all their income. Yes income and outlay could be compared. Yes, the gym class mentioned in another comment(and other expenses like it) would come to light--an expense that most I believe would agree should not be there if you are getting tuition assistance.

But we also know from very sad experience that our yeshivas are the lowest on the totem pole when it comes to fiscal responsibility, to knowing what is a need and what is a want, to being even handed in giving out tuition assistance (or even being "fair" about that assistance), to having internal controls to safeguard private information. Unless and until any private information given by parents can be guaranteed to remain strictly private, giving the yeshivas such information is taking a real risk.

And certain types of factual information the yeshiva has no business whatsoever in knowing--medical information being one type, and covered under HIPAA. A comment on Wolf's posting was really mind boggling. The commenter stated that the school should be allowed to see the medical information because if it knows that a parent is ill and possibly that could mean they would die, no tuition assistance should be given because the parent wouldn't live long enough to pay back any owed monies or to continue paying. And a comment like that is precisely why no school should be privy to medical information.

There are too many people out there who would nitpick to death some individual items on those credit card statements, depending on their own definitions of what is a want or what is a need and what parents on assistance are "allowed" to have. Don't remember if it was here or on HF's blog, but one comment ended "And God forbid those tuition assistance parents should ever have any meat in their cholent!!!" Unless we have in place a rational, secure, unbiased system then gathering all the minutae of people's spending is quite likely to end up with comments just like that one.

Anonymous said...

For anyone who thinks the requirement is a problem (assuming you can redact account numbers, medical information ,etc.), then as taxpayers would you also have no problem with people who get government benefits like Section 8, medicaid, etc. not having to produce bank statements and other detailed financial information (which they do under pains and penalties of perjury)?

tesyaa said...

Yeshiva is also the lowest on the totem pole when it comes to financial responsibility. How many people ask their cable company, internet service provider, or gas/electric utility for a break? If you God forbid lost your job, what would you stop paying: the electic bill or the yeshiva bill? I think Upper West Side mom is correct that the more detailed requests serve as a deterrent.

Lion of Zion said...

internal safeguards and privacy (with medical bills and in general) are real problems that need to be worked out. but in principle there is nothing invasive or otherwise wrong with what the school is doing. the question is why they waited so long to ask for this information. furthermore, why do they only ask for 3 months? they should be asking for 3 years.

Anonymous said...

LOZ: You are correct. One could rig the system with only 2 or three months of data -- Not that anyone would ever consider doing that, of course. The schools could also get credit reports which would show any credit cards that the parents don't disclose and the mortgage on the second home that someone forgets to mention.

Anonymous said...

I'm sure that the schools that ask for this information are equally forthcoming about their finances and happily open their books when they solicit donations and ask tuition paying parents to pay more :).

Lion of Zion said...

PROFK:

"And certain types of factual information the yeshiva has no business whatsoever in knowing--medical information being one type, and covered under HIPAA."

HIPPA doesn't say that yeshivot (or anyone else) have no business accessing medical info. what it does is give the patient the right to decide who gets access, with the default being that yeshivot (and others) don't get it. i know i'm playing semantics here, but it's an important distinction.

also, you wrote on wolf's blog:

"Schools have no "right" to medical information that parents do not voluntarily give them without coercion."

no one is "coercing" him to do anything.

as i stated above, i understand why someone would be apprehensive about sharing senstive medical info (even just billing info, which is what's under discussion here), but how do you suggest a school should react to a parent who claims $x,000 in medical expenses?

this is another reason that
"scholarship" descisions should be handled by outside agencies.

Anonymous said...

This can all be solved by eliminating scholarships and lowering tuition

1) no more invasion of privacy
2)no more degrading scholarship committees
3)no more brother fighting against brother - no more garbage about you bought flowers for $15 or you went on vacation - this is so bad for the jewisgh community's cohesion and causes loshen hora
4) everyone pays lower affordable tuitions with dignity
5) those that still can not afford the lower tuitions are directed to the very very affordable chareidi schools so that no child is denied a jewish education

Lion of Zion said...

ANON:

"The schools could also get credit reports"

i think that already is a requirement.

"I'm sure that the schools that ask for this information are equally forthcoming . . ."

i've actually tried that line of reasoning

Anonymous said...

I don't get how this will stop parents from being dishonest.

The same way that these parents can provide inaccurate income numbers on an application, they can get around the extra scrutiny by only providing some bank accounts/credit card statements and not others. How is the yeshiva supposed to know if a family has one bank account or ten?

Lion of Zion said...

ANON:

"encourage charter schools based on the florida-wexler model (not the brooklyn-steinhart model)"

what's the difference between the 2 models?

"they can get around the extra scrutiny by only providing some bank accounts/credit card statements and not others."

very simple. a credit report from one of the big 3 agencies lists all bank/cc accounts.

Anonymous said...

Why would parents who would cheat a Jewish school even care about sending their kids to a Jewish school? Its hard to believe that it is sincere religious reasons since if it was and a religious education was a priority one would think parents would make tuition a priority and be honest on the aid applications. Is it peer pressure? Do they really care about the religious education, but are angry at the schools about tuition and don't undertand that they are only hurting other families by fudging?

Anonymous said...

I have seen my credit report and IIRC it only listed the loans and credit cards that I have, not bank accounts.

Anon: I don't understand it either. It is even less understandable than cheating on taxes.

Anonymous said...

Arent't these the same schools that will need to be trusted with all sorts of confidential information about the students - grades, learning disabilities, test results, some medical information, who is on scholarship and how much, etc.?

If people can't trust the schools with some of their financial data, then why would they trust the schools with their children?

gavra@work said...

I guess I see it as very simple.

You are requesting a service below its normal cost.

The school can do whatever they want if they choose to provide it below their normal cost (i.e. full tuition), or they can choose not to provide the service. This includes both proving that you deserve the assistance and possibly providing services to the school.

If someone asked you for tzedaka, you are responsible to make sure that person needs it. Why should tuition be any different?

Granted I would block out any sensitive info (SS#, last 4 digits of CC, etc.), but this is a cost of asking for tzedaka.

P.S. I don't think the school will sweat the small stuff (unless there is a lot of it), they are looking more at the big picture.

This reminds me of the people who pay for their food on WIC & Food stamps, but then pay cash for their beer (or Mishpacha Mag!).

Bklynmom said...

Those who want to circumvent the system know exactly how to do it. A cash business hides your income very effectively. And paying cash hides your expenditures. A car can be registered in someone else's name. A vacation can be paid for a month earlier or later, to avoid it showing up on your credit card statement.
We know a family that brags about the amount of aid they are getting. They have an expensive house, which is, sadly, "too small" and drive two high end cars. The husband does home repair and gets paid in cash, and talks about to his neigbors!
Another family willingly says they are paying "very little" for their child's schooling (at a pricy yeshiva). They remodeled their kitchen with custom cabinets and granite. They sent their post-highschooler to Israel for the year and just flew him home for Pesach. They go away for Succot and Pesach! This mother does not undestand how cost can be a factor in my decision to not send my child to Israel. Even if their "very little" is not the same as everyone else's, from the looks of it they should not be getting any aid!
I agree we should not scrutinize, or be scrutinized, but these people talk about financial aid like they talk about the weather.
Another neighbor was incredulous when I said I was putting formica, not granite counters into my kitchen (we bought a fixer-upper and we were remodeling on a budget). When I said I have tuitions to pay, she said "just apply for aid."
Both the process of setting tuition and determining aid are very broken. Many good suggestions on repairing both have been suggested both here and in other forums. Only time will tell if they get put into effect.

JS said...

I have mixed feelings on the issue.

I think the best system would be to simply recognize that tuition assistance is tzedaka and to treat it as such. You give to whoever asks for as much as they ask (keeping in mind fixed resources) and you don't ask or worry about fraud.

The reason I say this, is because there's no definition of what fraud is when it comes to tuition assistance! Is fraud buying flowers every Shabbat? Is it sending the kids to camp? Going out to eat often? Cleaning help? Is it going on vacation? Heck, is it meat in the cholent? Or what about the big items? Buying too much house? Stay at home mom? Not willing to work a second job?

Fraud is just too ambiguous a concept beyond the most obvious form of telling the yeshiva I have only $500 in my bank account and you actually have $10,000 or another account with assets.

If the yeshivas came up with guidelines that parents could follow I would support these types of audits. If you put parents on notice that if they want tuition assistance they have to do X and they can't do Y, then great. Otherwise, give it out no questions asked.

The way the system is now just creates bad feelings, unfair treatment, and neighbors being overly invasive as they use their own criteria for misuse of scholarship when delving into their neighbor's affairs.

Anonymous said...

What's sauce for the goose...

Every institution that wants to see privileged information from its customers (families) ought to be equally transparent in presenting its own financial data to its donors.

tesyaa said...

Anon 11:05: the institution could not care less about seeing privileged information. They only care if someone REQUESTS a scholarship. It's not an admission requirement. It's due diligence when a request for CHARITY has been received.

Unless you think that tuition subsidy is a right, not a privilege.

jbaltz said...

I haven't parsed through all the comments yet, but I want to comment a bit on SL's original quote:
If a parent body simply can't be trusted...

If a school has to jump through 69 hoops in order to do this full financial cavity search to see if the parents are hiding something, it says one of two things:

0) The parent body is full of גנבים, and I wouldn't want my children exposed to the children of such people, or
1) The school itself thinks that the parent body is made up of גנבים, and will treat us in that fashion, which I find an affront to us, as we're not גנבים.

In either case, the way for us to deal with these issues was to vote with our feet (after many years of suffering such nonsense).

Upon reflection, I think that if more of us began to vote with our collective feet in these matters, school administrators might just be able to obtain a sliver of clue.

Orthonomics said...

Thank you jbaltz for careful reading of a concept I think it important.

Personally, I feel that when schools have anywhere from 50% to 100% on some sort of scholarship or discount, they are inviting a ridiculous "negotiating" process. At this point I think we'd all be better off with one-lower-price-fits-more than with what we have now which is causing great pitfalls in terms of observance.

HearingLawyer said...

As someone who once sat on a scholarship committee, I can tell you that, at least for my kids' school, reviewing CC and bank statements was (almost) never about trying to see if people were hiding assets. It was always about trying to balance the burden that the school (read: full paying parents) had to bear in order to provide a scholarship vs asking scholarship parents to limit that burden by being more cautious about their spending. There is no question that, if people want, they can game the system. Unfortunately, there is little that can realistically be done to prevent that (schools are not about to hire PI's to investigate parents).

Given the unique relationship among parents and schools, I am unsure of any better way to do it. Lowering tuitions and eliminating scholarships is a nice concept, but not sure it would work practically for parents that cannot afford the minimum (lowered) tuition. At best you start to minimize the number of people who need scholarships, but you do not eliminate the problem.

tesyaa said...

If Hearing Lawyer's experiences reflect realities in most schools (I don't know if they do or don't), then scholarship recipients should think twice before spending $10 at Barnes & Noble. The library is an excellent place to get books for free. Because it's not just that one book for $10; people who don't think twice about buying a book for $10 likely have other spending habits and patterns that are ingrained. I don't care what your spending patterns are; it's only when you are requesting a scholarship that it's problematic.

Anonymous said...

My children's school just mailed a (expensive, 4-color glossy) fundraising piece highlighting that 58% of the population is on financial aid. They also mentioned the full 8+ person administration (not including administrative help). They have less than 300 kids.

I don't feel it's appropriate - fiscally or emotionally - to pay the full price of over $40k for my 3 kids' education.

What other choice do I have, other than public or homeschooling or the cheap haredi school?
But I don't feel

Anonymous said...

I agree that this is intrusive, but unfortunately is probably necessary. This may be useful for the school to first determine the threshold for support on a broader basis, and then applying to individual families.

1. This information should go to an external group, i.e. SMART Tuition.

[I know an accountant who sits on a tuition review committee. He didn't even recognize his own submission when the committee was reviewing the SMART forms! It is possible to do this right: effectively while protecting privacy]

2. Guidelines/general analysis should be made available. This should not be full rules, but would go a long way to reducing the angst both of those receiving scholarships as well as those supporting them (full tuition payers, other baalei tzedaka)

3. Give notice (see #2 above) that large decisions such as mortgages and expensive cars will be a factor in the analysis. While it may be difficult to implement this for people that have already overpurchased into a bear housing market, it will have an impact and may motivate some to take a harder look at other financial decisions.

Note
I completely agree with commentors above, we do not want to have committees looking at small details, creating a perceived witch hunt for specific expenses. It should be possible for a family to choose what to spend on, i.e. eating plain pasta/rice all week to save up for a nicer cholent or Shabbos flowers. But, they should be responsible for overall actions.

Be'er

Anonymous said...

My experience for a number of years on a scholarship committee has led me to several conclusions:
1) The process is inherently dehumanizing for both the recipient and the committee. Both must make extra effort to be sensitive and minimize this.
2) There are in general two categories of people:
a) Those who voluntarily pay more than they can really afford, appreciate the help, and still feel bad taking advantage of it
b) Those who believe aid is something they deserve and that the community is responsible for the decisions they make
The people in the second category are generally far better off than those in the first. I have become resigned to the fact that the process is inherently unfair: increased vigilance may get slightly more money for the school, but a loss of mentschlichkeit is too high a price to pay. There is no changing this attitude. So we do our best, and make sure that we are ready for the day there will be a din and cheshbon- and hope those in category b are as well.
3) The demographic trends in our community are not in favor.

Our school's expenses to educate a child are 60% below what the local public school system pays, and we have to staff a dual curriculum. We have cut until there is nothing left to cut. The missing money can't come from the parents, because the parents don't have it. The only way Chinuch can be sustained is if the community decides it is a priority and treats it as such. If people continue to prioritize kiruv, kollel, and other causes ahead of Chinuch for children, then our schools will not be able to continue to operate.

As for the question at hand, we have never asked for bank or credit card statements, and I can't see us doing so. As I said before, we can't stop parents from making bad choices, and we can't stop parents from lying if they choose to. All we can do is further humiliate those who play by the rules. And that is an unacceptable outcome.

tesyaa said...

The only way Chinuch can be sustained is if the community decides it is a priority and treats it as such.

You are making the assumption that the current model of universal private school is the only way to provide Chinuch. I'd argue vociferously against that statement.

Ariella said...

It is true that many families do spend very lavishly and then shortchange the school. After paying for Pesach in a hotel, winter vacations abroad, summer homes, summer camp, maid service, gardening service, weekly manicures, eating out several times a week, etc., they don't have enough money left to pay full tuition. But the 3 months of statements would only show the real story for those who don't try to hide the money that comes in and goes out in the form of cash, bypassing the bank altogether.

Upper West Side Mom said...

As for the question at hand, we have never asked for bank or credit card statements, and I can't see us doing so. As I said before, we can't stop parents from making bad choices, and we can't stop parents from lying if they choose to. All we can do is further humiliate those who play by the rules. And that is an unacceptable outcome.

Anon12:39: There are other "victims" in this process and those are the parents who are paying full tuition. I am tired of the committee trying to make sure that no one feels bad when they are applying for tuition. Why should all the families paying full tuition have to pay for the cheaters? This makes me feel really bad (and resentful among other things).

I am more than happy to pitch in and help those who truly need help. I also am happy to have the teachers' kids attending at reduced tuition because that is one of the reasons why my kids school has so many good teachers but I am tired of paying for people who don't need scholarships because the committee does not want to insult anyone.

Anonymous said...

Upper West Side Mom-
I share your resentment. I have personally arranged my life such that I am able to pay full tuition and give money to the school on top of it. It is frustrating to see people who have made different choices "gaming" the system.

On top of that, I give a tremendous amount of my time to the school(something that I notice those who "game" the system don't tend to do or appreciate).

It'd be easy to become bitter, to emulate them. But where I sit, as Jews, we don't believe in a relative morality. I am comfortable that I am behaving in the proper way to the extent that I am able. I hope that others might follow my example and am happy to help them do so. I can never control those who don't but I can make sure that they don't influence my behavior.

Anonymous said...

tesyaa-
You're correct, that is my assumption. I believe it to be correct.

Upper West Side Mom-
We all pay for shoplifters, though we could eliminate them through draconian measures. Society has decided that a certain level of shoplifting is an acceptable price to pay in order to retain liberty and privacy.

Of course we do all we can to eliminate fraud, though, frankly, I have found it to be a small problem. The much larger problem is people who have made poor choices. This is a much more difficult problem to address. One thing we have considered is requiring financial counseling for all scholarship recipients. What do you think?

Upper West Side Mom said...

Anon 4:37 Yes we all pay for shoplifter but the scholarship committees are not even putting on security tags! As someone mentioned a credit report could be very helpful in finding out what people's true financial situations are or if there is a mortgage on a second home.

The committees also needs to figure out what is a necessity and what is a luxury. One thing that always pops into my head is camp. There is no reason for people who are on scholarship to be sending their children to camp unless camp is the only babysitting 2 working parents have or the stay at home parent is G-d forbid ill.

The administrator in charge of scholarships at my school thinks that as long as it's not an "expensive" camp then it's OK for a family on scholarship to send their kids to camp. I think that is dead wrong. There are plenty of parents out there paying full tuition who don't send their kids to camp so they can afford full tuition.

Perhaps the scholarship committees should send out a questionnaire to find out what steps full paying families take so that they can afford tuition and demand the same from families who are applying for scholarship.