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Sunday, June 02, 2013

Those with Less Need to Pay More

In my last post I examined the idea of [day school tuition paying] "middle-class" tuition capping and received some great comments regarding the applicability, the elasticity of the market, the complications of capping tuition or offering abatement in regards to having a strict cutoff where the stronger earner ends up with a disincentive.  Personally I don't think that abatement programs or tuition capping programs can be explored before expanding the budget via cost cutting and revenue creating programs.

In all the time I've been blogging, I've read about grand plans to court the wealthiest among us to fund "the system.".  Personally I'm convinced the wealthiest are mostly mythical characters.  But, it sure feels good to believe that they are out there, awaiting their opportunity to save us from ourselves.  I've also read commentary, much of with which I agree, regarding the spending habits of the community, implying that there is more money out there for tuition.  I completely agree that our spending as a whole is out of control.  I don't think that it necessarily follows that there would be "extra" money for tuition given that so many families are underfunded in the savings department and carry debt loads.  I've read plenty of commentary that grandparents aren't doing their part and that funding schooling should be a lifetime endeavor.  I think those with this war chant are ignoring the great contributions that so many grandparents are making to their children and grandchildren both directly and indirectly.  Perhaps the direct support isn't going to the schools in the form of a check, but money is fungible as we all know.  And the indirect support is harder to value, but when bubbe runs carpool and zaide is the emergency babysitter, please don't tell me that grandparents are recalcitrant.  When I'm in the pharmacy or the grocery store mid-afternoon, I'm running into bubbe with the grandkids.  And you can't ignore the fact that bubbe and zaide are the funders of other community functions and institutions.  Schools aren't the only function out there!

The demographic that never seems to get guilt tripped by article-writing problem solvers is those "with the least!"  As a commentator mentioned in the last post, "you can't squeeze water from a stone."  Basically, we continue to assume that this demographic is basically helpless or "tapped out" and they are not addressed in a serious way.  Given the fact that so many young people are delayed in gaining financial independent and that we generally push marriage regardless of the ability to support a family, this is a growing population and simply cannot be ignored.  I think this population is the one that actually needs addressed most urgently and I believe that addressing this population through various means (creating an anti-debt culture, financial education for all demographics but especially for young people so that they don't make major mistakes early on that are so hard to recover from, institute some serious minimum tuitions to phase in over the next decade, bring down the community standard in so many areas, putting the financial ability to support a family back the top of the shidduch questionnaire) can only strengthen the financial resolve of this demographic as well as help schools in the long run.

I'm going to stop this post right here so I can get back to my most urgent duty in life--making more money to keep paying my increasing tuition :) --and just leave you with a few thoughts:  1)  this population is far larger than many people imagine and 2) addressing this population isn't an effort for naught as many people and Rabbonim I've spoken to seem believe.

32 comments:

Dina said...

That's one thing I like about the "percentage of income" plan - it does encourage the lower-class to still pay their way, albeit within reason. Some feel like they can't afford to pay anyhow - why should they extend themselves? But 15% (or even 20%) of income as a cap feels like a fair enough sum for even the poorest.

Maybe a sliding scale, with 20% cap on the bottom up to a cap of 10% on the top?

Dina said...

AND, we need to stop allowing free tuition as a perk for teachers. They can pay the same 20%. Give them other bonuses.

G*3 said...

> Maybe a sliding scale, with 20% cap on the bottom up to a cap of 10% on the top?

Just the opposite!

A family taking home $2,000 a month is spending at least half of that on rent and a quarter on food. If 20% of what they make goes to tuition, that leaves them with only $100 for clothes, gas, household goods, medical bills, etc.

A family taking home $10,000 a month spends a much smaller percentage of its income on necessities, and so paying a higher percentage in tuition won’t hurt them as much.

It might seem unfair that the rich family is paying much, much more in dollar amount, but when you take from the poor family, your taking money they need for food and clothes. When you take from the rich family, you’re taking money they would have spent on their third cruise of the year.

The real solution, of course, is public school.

Dave said...

There isn't a way to save the Day School system as it is presently constituted.

The public schools work because the cost is spread among the entire population, and even then, if every family had 4-8 children, the public schools would look very different than they do today.

Anonymous said...

Frum Jews are not much different then the rest of Americans. They are lazy, lack most of the basic skills of life and "outsouce" everything to others! We live in a service economy. 80% of the things people did themselves are now outsourced to others!
Catering,
Washing Shirts and dry cleaners
Cleaning ladies
Car Maintenance
Car washes
Nail Salons
Sheitel cleaning, styling, etc..
Catering
House repairs
Realestate transactions
Hair cuts
Restuarants
Pesach hotels
Lawn maintenance
Building succahs
Laundry
etc.

I could go on forever. A luxury once tasted becomes necessity!

There is no more money left once you paid everyone under the sun to live your life for you!

So, I say that there is TONS of money to be had from the poor, but unfortunately, the rich assume that the poor "require" all these services just as they do and do not want to subject the "poor" to such horrible living conditions!

How dare we put people in a situation where they cant afford to send their Shabbos shirts to get dry cleaned? Or wash their own bathrooms with their bare hands instead of spending money on cleaning ladies, fancy toilet brushes, "scrub-free" toilet cleaners. Or the like. Afterall, we are not animals!

Instead, lets create more workshops on how to squeeze even more from the tax payers.

Bring on the vouchers!

Pathetic, I say.

rosie said...

A recent article in Jewish Action magazine from the OU, spoke of this problem. The rest of the world curtails their personal spending when they have less money but we in the frum community have not yet learned that we have to slow down our spending. It is interesting that an article on Aish, speaks about a practicing Jew named Dr Rick Hodes, who is a physician in Ethiopia. He saves lives on a shoestring budget but more than that, the poverty in Ethiopia is much worse than the poorest American experiences. What we spend on our "needs" could save countless lives and alleviate much suffering in Africa. We should remember this whenever we feel deprived.

mlevin said...

Asking rich to pay more for schools than poor is akin asking rich to give more tzidokah. Halochacally speaking one must give 10% of his income to tzidokah. Not more and not less. If a certain school charges more from rich than poor, than it takes money these rich people would have given to more worthy causes than the babysitting facility in question. (And that's right, I meant what I've said. Our Yeshivahs provide such poor educational services that it's hard to labels them as anything but babysitting facility).

tesyaa said...

I would modify "babysitting facility" to "babysitting and indoctrination facility". The schools are doing a good job of indoctrination.

Dina said...

I disagree, G*3. Those making $2,000 a month are on all of the federal programs. They are not spending 100% of their income on necessities. With very few exceptions (serious illnesses may be one), they can be expected to make sacrifices for tuition.

As someone who knows what it's like to make $2,000 a month, I feel that $400 a month even for the poor is a difficult but fair and attainable sum.

A nice curve that puts the lower class incomes at 20% cap, middle class at 15% cap, and top at 10% cap spreads the burden far more fairly, in my opinion.

Again, teachers must be paying the same. There are plenty of incentives we can provide for them other than letting that significant amount of children all attend school for free.

This would need to go hand in hand with more transparency - at the very least, any school wanting communal funds should be required to have a 3rd party financial auditor to ascertain how much of those funds are likely to be wasted, and to point out where spending should be curtailed.

Be'er said...

Tuition benefit, like all other faculty/employee perks should be included in the calculation of total compensation. Whether or not they should be given, is based on total compensation.

Theoretically, if a school is cash poor, but has spare capacity (and low/zero marginal cost per student), then it's good to compensate via tuition.

Our children's school does not provide free tuition. There are cases where it is part of the planned comp, but it is considered a benefit, like any other.

Anonymous said...

What I think isn't acknowledged is that we ARE getting vouchers... in the form of food stamps, etc. Parents at all income levels should be contributing meaningfully to the education of their children.

Another thing - I believe that there has to be a significant deterrent to gaming the system - severe enough that cheating just isn't worth it. Imagine going to someone and saying "We discovered that the house you claim to be renting is owned by you. As such you have forfeited your rights to the tuition cap permanently, and are responsible for repaying the school for the back tuition you owe. We have a heter from a Rav to sue you in court should you not meet your obligations."

Mark said...

If you earn $2,000 a month, you can't afford to have kids yet. Improve your skills, improve your earnings and then think about it again.

Anonymous said...

Sorry Mark, some of us have kids at $4000/month salaries, and then stuff happens.

JS said...

It's really an intractable problem because no one wants to pay more. Everyone wants a break. The rich want an abatement. The poor want scholarships. Meanwhile, everyone thinks they're getting squeezed and points their finger elsewhere saying that person should pay more.

Thing is, there isn't really more money available, and to whatever extent there is such money, people don't want to make the sacrifices necessary to make that money available to yeshivas. Maybe it's someone not wanting to part with savings or 401(k) contributions, maybe it's a Pesach hotel, or maybe it's cleaning help and eating out at restaurants. Maybe this is a cultural problem, or maybe it's just part of the human condition, but people don't want to give up whatever luxuries they have. It would take enormous efforts to change this culture in our communities to the point where people see yeshiva as their number one priority in their budgets.

And it's not just luxuries, but a basic lifestyle issue of planning to be able to pay. The attitude currently is "God will provide" (or rather, the scholarship committee will provide). Our culture pushes young marriage, having kids quickly, and doesn't push education or the ability to pay for this all. This is a problem that scales from right to left on the Orthodox spectrum.

I really see no solution beyond people continuing to borrow across generations and from their own futures to pay. How long will it last? Who knows? Maybe it will last until there's a retirement crisis for today's yeshiva paying parents.

The model is all wrong and fixing it isn't just a monetary problem. It's a cultural one as well.

Mike S. said...

One thing I see in common in all the posts on tuition is the assumption that someone else should sacrifice more for Jewish education. Depending on who is writing, that may be the administration, the staff, the rich parents, the parents on scholarship, the childless, the taxpayers or grandparents. At some point either we as individuals value the education enough to reach a little deeper in our own pockets, or the schools will close.

Baruch Hashem, I have been able to pay may kids' full tuition despite the dramatic rise (6-fold since my oldest started). Now it is not too hard for me, although when I was younger there were a few times when I bought the exact number of stamps I needed to pay my bills for the month because I didn't have enough for a whole book. But that was always extremely important for us; if educating the next generation in Torah isn't important enough to sacrifice for, we will fail to transmit out mesorah. There isn't some sugar daddy waiting to pay our bills.

kweansmom said...

I'm surprised at the attitude that grandparents should be contributing to tuition. Many grandparents like my own parents struggled to make ends meet and pay their own kids' tuition. In their later years they are entitled to enjoy their money and pay for "luxuries" that become necessities as one ages (eg travelling to see the grandchildren without having to suffer the discomforts of coach class). Furthermore many do not have adequate pensions or long-term care insurance and have to have money available for nursing care should they need it. Adult children and schools should are not entitled to view grandparents as ATM machines.
PS I am not a grandparent, but a tuition-paying parent.

tesyaa said...

Anonymous 3:59 talks of a deterrent to cheating the system, but everyone knows that no deterrent has teeth. How often, really, do yeshivot kick out kids for parental nonpayment? Sure, there will be threats, and there will be attempts to encourage such families to enroll at a different yeshiva. But bottom line, we are of a culture which states proudly "no Jewish child will be deprived of a yeshiva education for any reason". * So any deterrent effect is limited, at best.

*unless his or her mother wears the wrong kind of clothing, etc >snark

Miami said...

Cultural Problem... a trait heavily valued in the Frum World, NOT valued in the much more secular Jewish world is craftiness.

The Jewish stereotype is "my son the doctah" not "my son the car dealer" -- it's not about money, the other is more lucrative, it's about the high status professional career.

The non-Orthodox Jewish world highly values education and professional achievement.

The Orthodox Jewish world highly values craftiness, "angles," and "religiosity." -- Whenever I hear about how "great" a Yeshiva is, it's always about percentage of mothers with hair/elbows covered, never about the actual source material imparted.... and that's for the boys, for the girls I never hear anything but about socks/stockings.

This is linked to the Yeshiva system... The hardworking professional in the high status job: Doctor/Lawyer/Financier is expected to report everything, cut big checks to pay for their education (student loans), and to support the Yeshiva, because they are "lucky." Meanwhile, the less education "hustler" is expected to do what they can and not pay much.

As a result, the smart secular Jews are driven to achieve graduate degrees and highly paid careers, because their world view values that. The smart Frum Jew is driven to game the system, get a college that accepts Yeshiva credits and get a degree in less time, maybe work under the table to get benefits, etc... in the short term, the guy snaking free benefits and 30k under the table probably has more money to spend than is buddy whose making 45k as an analyst, but 5 years out the 45k analyst has moved up and the 30k hustler hasn't.

But everything with finances and the Frum universe values playing games, hiding money from the Yeshiva, the government agencies, the IRS.

It's not about fixed tuition, it's about a cultural universe that pretends its in a fantastical version of Tsarist Russia, instead of 21st Century America, and as a result is imparting values of the street instead of values of the classroom.

tesyaa said...

The smart Frum Jew is driven to game the system, get a college that accepts Yeshiva credits and get a degree in less time

This!! I've had more than one mother of a 20-year old young women tell me that their daughter is applying to graduate school with an online or similar BA, 2 years out of high school, one of those years spent at seminary.

Dina said...

Part of the reason for the cheating on tuition is the fact that paying honestly is so unattainable. Seriously, there are families with tuition bills of $60,000 a year or higher! That's more than the SALARIES of most of America.

If the numbers were at all realistic, there would be a much bigger pool of people willing to try.

To create a society where people give up luxuries, we have to stop asking them to give up EVERYTHING. Let's start asking for proportionate amounts from all families.

iTunes did this for music. People used to ONLY steal - now some do, but many more are happier to get it legally.

iStockPhoto started a revolution wherein self-employed graphic designers would start PAYING for stock photography instead of stealing it.

By charging realistically, we can restart the trend of people actually PAYING for tuition.

Dave said...

There are certainly ways to cut expenses in Day Schools.

That being said, they are always going to be expensive. Private schools and large families only go together for the extremely wealthy.

Shoshana Z. said...

@Orthonomics-

I am so thrilled that you're blogging again! :)

Miami said...

Dave,

Down here, the educational costs:

Secular Prep School: $20k/year
Jewish Day School: $15k/year
Yeshiva Day School: $13.5k/year
Catholic Diocese School:About $10k for non-Catholics, considerably less for Catholics to attend
Public School Spending: $8k in Dade, $9k in Broward/Palm Beach

So is it possible to bring down educational costs, even dramatically? Absolutely. Before you say that "Catholic Schools have unpaid nuns teaching" that hasn't been the case for nearly 40 years, they have trained staff, same as everyone else.

However, your well-off parents at Yeshivot/Day Schools want Private School Amenities, you will not have them there if you don't convince them that they are getting similar amenities as prep school, even though they aren't.

If you had a Yeshiva Option in the Catholic School range, and a Day School option in the Prep School range, I think you'd have much happier parents.

The difference is Catholic School parents may stretch to pay tuition, but they know they are choosing a religious education for their children. Day School/Yeshiva parents don't feel that they are making a choice, so they resent the expenditure.

Prep School parents may struggle to pay tuition, but they certainly don't whine about it.

Superintendant Chalmers said...

I have to say, I find Miami's vitriol-filled rant to be so downright hateful that it's nauseating.

"But everything with finances and the Frum universe values playing games, hiding money from the Yeshiva, the government agencies, the IRS."

As part of the frum universe, I'm personally offended by these disgusting comments, as should be most of the readers here.

Do you even know any frum people? All you hear about yeshivas is % that cover their hair etc.

I call BS, I think you're so full of hate toward frum people that you probably don't even know anyone in yeshivos and you're making this stuff up. So let's hear some specifics, which yeshivos and girls schools are you talking about?

Pathetic.

miriamp said...

Please, please, stop the hate! Not everyone sends clothing to the dry cleaners. Not everyone has a cleaning lady. Not everyone makes huge simchas. Yes, I pay someone to fix my car, but I let the rain wash it. I wash my own sheitels, and most of them are synthetic. (I have 1 17 yr old human hair sheitel that cost me $300.) I cut my own nails and hair, and we usually cut our children's hair ourselves as well. I even make a lot of our clothing. I really don't think I can be that abnormal. Oh, and I don't live in NY -- maybe that's the real thing taht sets me aside as different.

tesyaa said...

miriamp

I'm confused. Stop what hate? Is it OK to hate people who do use dry cleaning and send out their sheitels for a wash and set? Or to hate NYers but not OOTers?

Miami said...

Look at the two June posts on the prior thread. I loosely affiliated Jew posts about how he'd be interested in Day School at a certain price point (about half what is charged), but at the price offered, it isn't worth a discussion with his wife.

The response is, have you talked to the Day School, maybe they can work something out.

That is what I refer to as craftiness. The $19k price point isn't unfair, it's probably on the low side for private schooling in San Francisco. It's not a need based scholarship, the posted and his wife make good money.

It's just that $57k is a really expensive luxury that he'd value somewhat and his wife not at all, but at $30k, it becomes something he'd want and his wife might agree to...

Clearly this couple is well off, his wife would be interested in letting him indulge in something for $30k that she doesn't want... Yet a poster is suggesting, "hey, call them up, perhaps you can make a deal."

That's what I mean by craftiness.

This person is not entitled to charity (nor considers themselves worthy of it). It is suggested that they get a special deal, just because. That isn't how upper middle class Americans act anywhere else in their life.

My commentary on the "religiosity" in South Florida may have offended people, and for that I apologize, but this looking for an angle is simply not common in highly educated professional America.

mlevin said...

Look, people who get paid well deserve it. They invested a lot into whatever it is they are doing. Money doesn't just fall off the tree. 60K is a lot of money, so it is very wrong to say that these people who work hard to make a decent living should pay the whole amount and forgo vacations, especially since we know that many others in the same schools do not pay the full tuition.

Superintendant Chalmers said...

I still find Miami's comments abhorrent, regardless of his so-called "explanation."

So you're admitting to making broad (extremely negative) generalizations about vast amounts of frum people based on individual incidents.
Nice.

I don't know why I'm the only person here who found your remarks extremely offensive and hateful.

You still haven't responded to my question about which yeshivas it is that all you hear people talk about is the percentage of mothers who cover their hair. And which girls' schools are spoken about in terms of stockings. (Honestly, I don't even have any idea what that had to do with tuition!)

In other words, you hate frum people, all you do is spout hate, and you're full of BS.

Avi Greengart said...

mlevin wrote,

"so it is very wrong to say that these people who work hard to make a decent living should pay the whole amount and forgo vacations,"

No. A service costs what it costs. It is absolutely wrong to assume that people are entitled to expensive services at a discount simply because it is expensive. You would never expect a butler or a private driver or psychiatrist to offer discounted service because, you know, why should you have to forgo other luxuries? If private school tuition costs $60K, that's what it costs.

"...especially since we know that many others in the same schools do not pay the full tuition."

a) You don't know that. Every time I tell people how much Teaneck day schools cost, I hear, "well, of course, nobody pays that." Yes. They do. The vast majority of parents in the local schools pay full tuition. (Some of the schools publish their finances - you can see for yourself.)

Of the parents who do get tuition reduction thanks to the charity of others (aka "scholarship"), they simply cannot afford full tuition, and undergo a fairly intrusive process to determine so. Most of that group only gets a 1/3 reduction. (Do some people lie and cheat and steal in order to qualify for this reduction? I'm sure some do. That's a problem for the school and for our community at large; it should not change anyone else's calculations or expectations. Saying that you should consider lying and cheating and stealing because others do is, quite frankly, evil.)

Now, if the community would like to subsidize the cost of tuition to attract unaffiliated parents to the schools, that's fantastic, but that has to be a separate fundraising effort. You can't just go to the school and ask for discounted service.

Anonymous said...

Supernintendo Chalmers:

Your vitriolic torrent of uncivil venom directed against Miami Al is serving to indicate that you are not frum. A frum Jew who sincerely believes in obeying G-d and His Torah would engage with wit, humor, and insight when conversing with Al. Your demonstrated willingness to resort to straw-man canards such as "you hate frum people" and "all you do is spout hate" is a clear indication that you do not respect G-d or His Torah. In addition, your use of an obscenity ("you're full of BS") in a public forum is conduct unbecoming a Jew, and it shames all Children Of The Covenant to be exposed to such by you.

You owe Miami Al an apology. Al has engaged in respectful but lively discourse and you have treated him with all of the level-headed dignity of the Stasi.

Please publicly apologize and treat Al--whatever you may think of his arguments on their merits--with the same respect that he has consistently shown for other forum participants, including yourself.

Yours sincerely,
Ralph Wiggum

Anonymous said...

avi-

last year, yu put out a report (the benchmarking report). I believe the stats there say that >50% are on scholarship and the scholarship averages is greater than 50% of tuiton. not sure why you think most people are paying full (though the study was on countrywide, not state specific).

I hear asking for a small scholarship becasue the schools aren't trasnparent in their finances saying what % is for your child and what % is for other kids. I have no problem paying for my own kid, but don't have money to support others