Got Orthonomics in your Email Box?

Saturday, June 19, 2010

A Tuition Gemach?

This letter on the Lakewood Scoop showed up in my Google Alerts. This letter brings a quote of Mark Twain: "It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." Letter follows with some comments of mine in [orange]. Warning: there are a few cynical comments mixed in. My apologies. I hate to be a cynic, but the "problem that has to be recognized" is that you can't fundraise yourself out of a lack of income. Quite frankly, we already have a tuition gemach, it is called the schools the teachers who don't get paid in full each and every pay period, and those who meet their obligations! You can move the gemach outside of the school and let people default on the gemach. Ultimately, I believe you end up with the same issue: you can't accomodate **everyone** regardless of financial circumstances.
----------------------------------------------------------------------

A friend of mine recently bemoaned that he received a letter from his children’s school that stated he had to come up with $3000 if he wanted his kids to be able to attend school next year. This man isn’t the type that tries to avoid tuition with excuses. In fact, he requests that part of his paycheck go directly towards his kid’s tuition. He once told me that he is makpid to pay as much of his kid’s tuition as possible because it ensures the purity of their Torah. [Bemoaning a letter to pay up for registration or services already received? Do people "bemoan" collection letters from the phone company or utility company? I just simply can't understand being upset that the school you have agreed to pay, after signing on the dotted line, sends you a bill and expects you to pay. It doesn't matter how "makpid" you are in trying to pay tuition. If you signed the contract, you need to follow through].

I understand the fact that chedarim and yeshivas have bills to pay as well as Rabbeim. I understand that they struggle for money just as much as many members of our kehilla do. Nevertheless, the solution can’t be to demand money from people who simply don’t have it. [They are asking for money from people who agreed to pay money. Orthonomics rule of thumb: don't sign contracts for things you can't pay for].

I am not a posik, but I believe there might be halachic issues with pressing parents for tuition who simply don’t have the money. [Actually, I don't believe there is any halachic issue with collecting money from people who owe you money, as opposed to bothering someone for which you lent money to. I had a case in which someone bounced a check on me. They agreed to my price, gave me a check, and when it bounced from here to there, they told me they had no money. I spoke to our Local Rav who told me I should be smart in how I work to collect the receivable, but I could absolutely press them, but I should exercise judgment as to what was most effective. In the end, I found a creative method and dropped the client].

School vouchers could be a solution to this problem [I'm trying to hold back laughter and I'm hitting my forehead. Too much logic has clearly been lost amongst the People of the Book: you have a pressing problem on chinuch NOW and the solution is to think about what vouchers could do for the community], but the NJEA will fight tooth-and-nail to prevent Christie succeeding in this legislation. Ultimately, I don’t think the 90% of the state legislatures who depend on NJEA donations and endorsements are going to go with Christie on this issue.

I don’t know if the following is a solution, but perhaps it could relieve some of the financial burden that terrifies people like my friend. I propose Lakewood set up a tuition Gemach. Yes, I am aware that it would be a difficult task to raise the amount of money needed to get this Gemach off the ground. Furthermore, I know that many would seek to abuse the Gemach by borrowing and then defaulting do to the nature of the loans that this Gemach would be distributing. [Mi Kamocha?] Nevertheless, I believe that with the right fundraisers involved in building the Gemach and a set rule of restrictions on the loans that this idea could be implemented. [Because if we only had the right fundraisers, money would magically appear?] An example of what I mean by having the right fundraisers behind this Gemach is getting the people who have a reputation for being able to raise millions of dollars with one or two fundraiser events. [I don't even think the celebrities on an advertised national TV show what raises money for charity raise in the millions! Who are these people that raise millions in a single fundraiser or two?]

The Torah allows a person to distribute a loan with collateral taken. In light of the fact that a person might be borrowing up to 3-4 thousand dollars a year the Gemach should be granted the means to collect the loan through Beis Din and a lean [sic] on the person’s car or something else of value. [Wow! I'd love to see this. A defaulter's car is nabbed by the Beit Din, but was really collateral for a loan from a car lot for which another loan has also been defaulted on. Perhaps the Beit Din can nab sheitels off heads and silver out of cabinets? My opinion: it is far easier to send a letter asking for payment before the new year comes in than to engage in the business of repossessing.]

I admit there are still holes in this idea. Perhaps, a more practical solution is needed. One thing is for certain, this problem has to be recognized and hope in school vouchers can’t be the only solution. [I will grant you that. Now for some Swiss cheese and perhaps an afternoon snuggled up reading the Communist Manifesto].

31 comments:

Honestly Frum said...

I admit there are still holes in this idea.

Ya Think? This is one of the more humorous ideas I have seen as of late, but don't most schools give out scholarships? Perhaps a better idea from a gamach would be for the schools to give out interest free loans that are payable down the road instead of simply handing out scholarships.

Ariella said...

" Orthonomics rule of thumb: don't sign contracts for things you can't pay for." I second that. You would think it would be a fundamental point for people not to take on obligations they know they can't live up to. Signing a contract that you cannot afford to pay is tantamount to lying. And I don't think the fact that something may, possibly, happen (like an unexpected raise or bonus) to change the financial situation and enable you to pay can be relied on. The school cannot cover its operating costs with mere promises not are not delivered.
BTW the word is lien not lean I would have put a [sic] in after it.

JS said...

Reading this letter made my head hurt. I thought we were "The People of the Book" - highly educated and intelligent people. Don't we hold our heads up high and spout off statistics about the number of Nobel prize winners or how Einstein was Jewish? Has this all been eradicated in just a few generations? I think we now value clever schemes, irresponsibility, looking for loopholes, and foisting on to others.

This is really so incredibly sad to me. I think the real danger for those who think for themselves isn't how can I afford to pay the tuition bill, but will sending my kids to yeshiva make them turn out like the letter writer. How does a system become so warped that it becomes a perfectly natural question to ask where a yeshiva gets off sending a bill to a parent who agreed to pay for those services? Since when is being "makpid" but not paying up deemed to be enough?

More and more I feel not only a religious divide with my fellow "Orthodox" Jews, but a cultural and educational divide as well.

ProfK said...

Jarringly missing in this letter are any mentions of the word work, employment, job, salary etc. If they couldn't pay because of work reverses that came after they had signed the contract then the correct action would have been to go to the school and show them on paper what had happened and ask for tuition assistance for the short term. Since it's not mentioned we are talking about someone who is 1)not employed or 2)employed with a low level salary. Either way, signing a contract to pay knowing that you can't pay is fraudulent at best. If such a person is defaulting on the monies owed to the school what makes anyone think she won't default on monies owed to a gemach?

Just what we don't need--another way to weasel out of financial obligations and leave others holding the bag.

Avi said...

I think you guys are too quick to jump on this. Just look at all the good ideas here! Rather than take a loan on your credit card for an ongoing expense, this is an interest free loan for an ongoing expense. And this way the donors can provide tuition assistance to the community as a whole, rather than just the school that solicited them. Plus, the million dollar donors will only have to attend one or two fundraisers. Finally, the pressure will be off Christie, allowing him to focus on something other than fighting with the NJEA over voucher programs for religious studies.

OK, seriously: if this is what they have to deal with, why don't schools simply demand payment in advance utilizing third party billing and collection agencies?

Seriously, part 2: Sadly, there are already tuition gemachs. They're called "gemachs."

Anonymous said...

The "one or two fundraisers" comment is ludicrously funny. Did he ever hear of the Chabad telethon? They raise 5 or 6 million in pledges, with UNTOLD expenses, and this is for a "feel-good humanitarian" need (the drug rehabilitation program). Does anyone really think that celebrities are going to be jumping up and down to sponsor tuitions in Brooklyn?!

Secondly, how can a gemach help? You're just postponing the inevitable. Is this a way to ensure people pay tuition their whole lives, then pass on the remaining debt to their kids?

Scraps said...

Wow. There are so many things wrong with this letter, I hardly even know where to begin.

I think the biggest problem is the mentality of many in certain circles to take on more debt than they can afford and then say they have "emunah" that the money will somehow shower down on them from Shamayim. Not only is this attitude disingenuous at best, it is certainly fraudulent at worst, as has been pointed out by many already. If you can't afford it, you can't afford it - period. Why is the school the offender when it asks for money that is rightly its due? (Also consider that $3000 was probably not the full amount owed, but a minimum needed to ensure the children's future enrollment.) The school is the victim, time and time again, when parents cannot or will not pay tuition. The school DOES have bills to pay, as the letter writer so astutely observed. They have bills and teachers to pay, and books and supplies to buy. Why must the school suffer (not to mention those the school itself owes money to) because so many in the community are irresponsible about their financial obligations?

A "tuition gemach" would simply exacerbate the problem, in my opinion. If people know they can rely on the gemach for the funds they need to pay their tuition bill, even more will borrow and borrow and say "Hashem will pay it back." It only pushes off the financial obligations to yet another third party. And as others have already observed as well, if parents already refuse to pay the schools, what's to stop them from defaulting on a loan from the gemach? I find it laughable that the letter writer suggests batei din putting liens on people's property. Even supposing that is a practical solution (which it is not), can you imagine the outcry there would be when (there is no "if") the batei din tried to collect the collateral? "You can't take away a car from a kollel avreich with seven children!" "It is cruel to deprive an entire family of their means of transportation merely because the father defaulted on a loan!" And so on.

(School vouchers are such a non-issue that I'm not even going to address that suggestion. Anyone who thinks school vouchers are the answer to all our tuition problems is a fool, at best.)

Offwinger said...

Criticizing this letter is like shooting fish in a barrel.

Miami Al said...

I think that one of the side effects of speaking "Yidlish" is that things that are totally absurd come across as sounding like it's a religious principal.

Just about any business principal has an appropriate terminology in Hebrew, Yiddish, and English (as well as Latin, French, German, etc). However, by switching back and forth, you give yourself the impression you are talking about a religious principal, instead of a business practice.

We all see this as silly, but he no doubt finds reasonable. I bet if reread the letter in standard English (or standard Hebrew, or Yiddish for that matter) he would think that this is totally ridiculous.

Everyone else said everything that there is to say on the substance of the letter.

JLan said...

"Orthonomics rule of thumb: don't sign contracts for things you can't pay for"

SL- have you ever seen the Saturday Night Live sketch "Don't buy stuff you cannot afford?"

Orthonomics said...

JLan-A poster sent me a link. Funny and true. Definitely a classic skit.

Anonymous said...

The financial problems in the US Orthodox community are growing. The system is unsustainable. Their are two broad areas that need to be addressed:

1) Increased income: better education, higher income career choices, better investments, more working hours, job training assistance, networking etc.

2) Decreased costs: less money on tuition, simchas,housing, cars, (smaller families (if I dare)), toys, food (is steak really neccassary for shabbos),etc.

The financial situation is likely to continue to detiorate as the US economy is likely in for many years of low growth or even negative growth.

Anonymous said...

Don't forget Peak Oil which is likely to cause major economic hardhsip by 2014.

qsman said...

'Tis the season! It's been a while since I last posted.....

$3000 is the flat rate tuition at the Lakewood Cheder.

If he only got a bill for $3000, then he only has one child in school. I don't know what the other expenses are, but $300/month is doable, especially since Lakewood provides bussing and other services that other communities can only dream about.

Thinking said...

While I wholeheartedly agree with SL on this one in theory, I believe he may be trying to address the issue of registration fees and not tuition as a whole. Hence the bemoaning.

Many schools have a $1K registration fee per child that is non-negotiable. In the past many yeshivos have allowed the registration fee to be added to the agreed tuition and paid out over the year together with tuition. Due the current fiscal state of many yeshivos they are asking for the money up front this year.

So if the writers friend has 3 children to register he will need $3K now as opposed to when he was able to pay it out over a 10-12 month period.

While not great, the potential solution would be to have someone "front" the money.

So this is not necessarily about not paying up for what was agreed. It could be more of a situation where yeshivos are changing the tuition payment structure and creating some hardships.

Yoilish said...

Miami Al, it is "priniciple" in this context, not "principal". As a yeshiva guy, I just had to share that after reading all your comments over the last few years talking about the importance of education.

More substantively, I think it is in poor taste to bash a letter written by an unsophisticated and uneducated person who does not say anything awful. I agree that the letter betrays naivete and irresponsibility but I challenge you to find a religion,ethnic group or race that does not consist of 25% foolish people. It is just the bell curve at work; not everyone can be smart and some people must be dumb.

JS said...

SL,

Had an idea that you may want to turn into a post. At the very least I think it's something interesting to think about.

We see the current generation of Orthodox Jews suffering financially and making terrible financial decisions. The current generation, even those making very respectable 6 figure incomes, are struggling to pay mounting yeshiva tuition bills. The unfortunate reality is that the yeshiva bills are paid by taking on massive credit card debt, underfunding or raiding retirement accounts and savings accounts, tapping grandparents' wealth, and borrowing against equity in one's house. And of course there is the problem with simcha spending as well.

The question I had is: what will the next generation of Orthodox Jews look like? The more I think about it, the more it seems clear to me that we are reversing a trend of upward mobility in our communities. Many people have parents or grandparents that came to this country with not a penny to their names after experiencing unspeakable horrors and yet, within a generation or two, the families rose above the median income, and often far above it into the top 10% or even 5% of earners in this country. However, I fear this trend is being reversed.

Who in the next generation will be considered "wealthy" or, at least, "well off." Already, in this generation, people making 6 figure salaries complain they can't get by and that yeshiva tuition is sinking their financial ship. People have confirmed that in addition to mounting debt and lack of personal savings, they cannot save for their children's college or graduate education and that their children will be forced to go to the cheapest schools available if the children want to avoid massive student loan debt.

So, who will be the next generation's well off or wealthy? The 6 figure earners can't cut it and are bankrupting themselves to pay for K-12 private school for their kids. The kids will be forced to go to lower quality schools or face massive student loans. Whatever the likelihood is of becoming a big earner from CUNY, for example, it has to be less than if the kids went to a top-tier university (which is where the 6 figure earner's work colleagues are sending their kids). More so, will the kids even try to become big earners when they see how poorly things turned out for their parents? Further, the kids will most likely be supporting the parents instead of the other way around.

So, who will be OK in the next generation? It seems to me those who are very wealthy now and are unaffected by tuition and other "Orthodox expenses" will surely be OK. However, it's unclear if that wealth is really enough to be generational beyond maybe 1 generation. Of course there will be some who hit the jackpot financially by being entrepreneurial or networking to get the huge paying job. But, I think the largest portion of the well off and wealthy in the next generation will be those who are independent and think for themselves and opt out of yeshiva tuition before it consumes all their financial resources. It will be those people who realize that frumkeit isn't bought for $15k per year K-8 or $22k per year 9-12. It will be those who realize that investing in K-12 private school is a worse long-term investment than investing in a child's later education.

I think the latter group is more on the left of Orthodoxy (not in terms of frumkeit necessarily, but in terms of how they think in the sense that they aren't part of the herd). Those rejected by mainstream Orthodoxy have already stopped donating to Orthodox causes for the most part. I think that trend will continue with this group who left yeshiva. They won't see it as worthwhile to contribute to the system they opted out of. The next generation is in a whole lot of trouble.

Miami Al said...

Yoilish,

Oops, good catch, I wrote quickly and was sloppy. I don't edit my blog comments, I usually see at least two typos or similar mistakes when I reread.

I do believe that the Yeshiva-English dialogue often results in people saying things that they would never say in a single language.

Take postings on "Parnasah." People advocate behaviors to earn "Parnasah" that they would NEVER advocate as career or job advice. However, by switching to the Hebrew word, it becomes a religious concept, devoid of its early implications.

Purely religious concepts may be best expressed this way, but general business ones are best addressed in the language in which you are speaking, lest you ignore the common sense you would bring to the conversation and elevate it to a religious dimension.

Yoilish said...

Miami Al,
I actually agree with you on the obfuscating nature of yinglish. I have asked my chavrusah's to restrict themselves to English because I find that Yiddish is often used to cover up sloppy thinking.

Please don't take this as an indication that I agree with almost any of the other views you have espoused here. :-)

Miami Al said...

Yoilish,

Glad to agree where we agree and disagree where we disagree. :)

I definitely find that when the Yiddish comes into learning, the thinking gets sloppy from short hand. If your are fluent in Yiddish, learning in Yiddish is fine, but sprinkling words in leads to sloppiness.

Anonymous said...

"Who are these people that raise millions in a single fundraiser or two?"

I was working as a chapter volunteer with a national charitable organization that hired a new fundraiser. They INSISTED over and over again that he would be able to come to my region and raise $500,000 to $1,000,000 in ONE night, if we would JUST supply the right venue and x number of people. As I remember, I think they wanted around 1,000 people (which we'd already told them would not, could not, happen). In a private home. In a completely new, undeveloped territory (for this org). The other local volunteer and I looked at each other and just laughed. Then this person came to our region in advance of such an event, and managed to completely offend and turn off every single local person involved. $1 million suddenly became ZERO. Ah, those lovely million dollar claims!

orthofan said...

I don't think the letter writer meant a gemach which gives loans that have to be repaid. I think he wants a huge fund that will pay tuition for those who can't afford it. And that idea is even dumber than the loan idea.

RAM said...

We ought to recognize that there really are people who made financial commitments when these could be fulfilled, but later ran into parnassa-related problems. These situations need to be considered on their individual merits, also keeping in mind the financial situations of the educational institutions and of potential benefactors. No one "has it coming" but equitable arrangements can be attempted if all parties act in good faith.

Anonymous said...

Radical financial change is needed in the Orthodox community. It will either come reactively or proactively. I am betting on the former.

Dovy said...

JS: It gets even worse when you realize that Chareidim, with all their pathologies like disdain for secular laws, persecution complexes, etc. (just read the comments on VIN re Rubashkin) really start to outnumber us!

Anonymous said...

RAM: That is true and it could happen to anyone, but perhaps it also means that more people should try to save and have at least 6 months living expenses in savings, even if that means foregoing big weddings, waiting to buy a house, young couples getting used furniture and cars instead of new, etc.

G*3 said...

> "Orthonomics rule of thumb: don't sign contracts for things you can't pay for"

Good advice, but in the yeshiva world sending kids to yeshiva is seen as both a necessity and an entitlement.

Anonymous said...

G*3: I agree. It's like if your child was sick, you would take him/her to the doctor even if you didn't know how you were going to pay for it. That's why for the yeshiva system to survive, the focus needs to be on getting better educations and job training and both parents working to the best of their abilities.

Orthonomics said...

G*3-This wasn't regarding (direct) financial issues, but when my parents did not feel it was responsible to sign on a dotted line, they would revise a contract and return it with edits. As an example, my parents never signed disclaimers that included indemnifying. If we were involved in an activity that asked us to sign we would not sue in the event of an injury, they would sign. But if it also asked to indemnify, they would cross that part out of the disclaimer.

I've done the same thing.

I would recommend that if a family cannot sign a yeshiva contract in good conscious, they revist the contract to something they can agree too and submit it and hope for the best. Perhaps the school will not accept it, but perhaps they will. I have friends who have told the school this is what you are getting, take it or leave it. In one case, the father will only write one check and doesn't want to deal with any extras that just come up. He tell the school to include everything anticipated in the bill and he pays up in one lump sum.

Another family I know, just said to the school, here is what we can pay. I know some would be infurirated that they didn't go through a song and dance with the scholarship committee like others. But in their defense, they didn't sign something they would default on, leaving the school and the other parents to pick up the tab. They made an offer and they made good on that (accepted) offer.

Miami Al said...

Orthonomics,

No objection from here. The school offers education for $X, you counter for $Y, where $Y<$X, they accept.

Seems like a perfectly fair business transaction.

Why go through the degrading nonsense of the scholarship committee, either they'll educate your children for what you are able and willing to pay, or they won't.

Why the game?

JR said...

SF: How do you think orphans and children of the poor (cobblers, water carriers etc.) were educated back in Europe and in Northern African countries?

I'd like to see some Shulchan Aruch and later halachic authorities quoted on your blog regarding what obligations the community has to support the people in its midst, particularly when it comes to educating children.