Tuition Thoughts

Rabbi Teitz of JEC (Jewish Education Center in Elizabeth NJ – a MO school system that has an elementary school, a boys high school and a girls high school) recently posted a reply to a Jewish week article on opening a no frills school in Bergen County to reduce tuition. Some things to keep in mind when reading:

1) While this addresses things from a MO point of view (tuition above $10k), its really proportional to the $5k+ tuition of the yeshiva world because of number of children in a family and salary base (approximately).

2) Read the concept and please don’t take the opportunity to bash Rabbi Teitz. Whatever your feelings are of him (I don’t think he is a controversial Rabbi), please do not air any grievances you have about him here. That is not the purpose of this post.

3) This was posted as two different posts, I am combining them.

4) Do you think a sense of entitlement is a large problem with Yeshiva tuition? Are we forcing tuition raises on people who could otherwise afford tuition because of others who cannot pay? How much are we responsible for other people’s yeshiva tuition?

Allow me to put the matter into very specific terms.

In my school we have around 900 students, preK-12. Our salary budget

is around $10,000,000, or about 83% of our $12,000,000 budget.

An across-the-board 3% increase in salary, which is hardly huge,

translates into $300,000+ additional expense (the extra is the 7.65%

FICA and Medicare tax, about $23,000, which is a hidden factor but adds

up).

Assuming a balanced budget (and even if not balanced, the cash flow

must be maintained), we need to find another ~$325,000 to cover the

raise.

Dividing that out over the 900 students means raising tuition by $360

per student. Factor in scholarships (and 20% scholarship is also not

unheard of) and the real increase has to approach $450 per student.

And this is just to give the teachers a 3% raise. We’re not factoring

in overhead, programs, etc.

Cutting programs is enticing, as it can be lead to cutting staff

positions. But as others have mentioned, do we cut our social worker

or learning lab staff? The reality is that school staffs are

significantly larger than they were even a decade or two ago. We hope

that the additional staff improves our product. I would not risk

cutting the programs to find out.

One suggestion that I heard was to not give across the board raises.

There are certainly staff members, teachers and administrators, who are

earning well above what our parents earn, especially when looked at on

an hourly basis. Does everyone need an annual increase? While this is

not as difficult a matter as merit pay, which has yet to find a way to

judge the full value of a teacher’s input into the growth of a student,

one has to wonder how we would decide who needs the money most. Do we

ask staff to justify their need for a raise, as we ask parents to

justify their need for a scholarship? I’m sure many parents would see

poetic justice in that arrangement – having teachers submit their

income and expenses to a group of parents for them to divide the fixed

pot of tuition dollars allocated to salaries. I’m sure there are some

members of our staffs where only one spouse works. When looking at

parental scholarship requests, we ask parents in similar situations why

they expect the school to carry the burden of supporting such a life

style; we expect that, barring exceptional situations, both parents

will be gainfully employed. Parents can justifiably turn that back on

us and our assumptions of fair salaries and the number of wage earners

in a family.

One answer given to this challenge is to increase outside funding.

That is easier said than done. Many donors are moving away from

general donations, preferring targeted giving to specific programs.

While this is wonderful for gaining gifts of equipment that are beyond

our reach (could we really afford smartboards for all our classrooms at

$4000-5000 a pop?), it does nothing to help the bottom line. And there

is not an endless supply of outside donors either. Many of the biggest

givers are hit up by a growing number of institutions, so that even if

actual giving goes up, each school gets a smaller piece of the pie.

Finding new donors is like searching for a needle in a haystack. If

someone has enough money for a big gift, chances are others know about

the person as well, or will in short order. And the really big gift

takes years to cultivate; it is rare to get a letter in the mail from a

lawyer with a multi-million dollar check from an unknown donor’s

estate. The larger the gift, the longer the development time, the more

opportunity others have to approach the donor as well.

PEJE has tried to nudge schools into sharing costs where possible. I

think that statistics bear out that most day schools have less than 100

students. Schools such as these might be able to find ways of sharing

certain back office expenses: does each school need an executive

director? can schools share office staff? But mid-size and larger

schools have more than enough to maintain full-time executive

directors, controllers, maintenance managers, technologists, and social

workers. Joining with other schools just doesn’t work.

The only real way to stop the inexorable creep of salaries is to cap

them. That way we know that there is a maximum salalry load that we

will achieve, within reason. This does not address newly created

positions to address student needs. But schools will set different

caps, or they will lure away a prized teacher by making a salary cap

exception. I am gaining a stronger appreciation for professional

sports owners and their problems with run-away salaries. And our

salaries are hardly exorbitant. Do we go to a system where we declare

“franchise” teachers and any school poaching one has to pay a penalty

or open its protected teachers to being approached by other schools in

return? And how do we balance less affluent schools against the more

affluent? And how do we decide on a cap- a per hour rate? What about

positions that are harder to fill? Is there one rate for language arts

teachers and another for science teachers? Do limudei kodesh teachers

get a preferential rate?

Reality also has to play a role. In searching for a new principal over

the past few years, I was struck that a thirty-something applicant,

without any experience as a principal, only some limited work as an

assistant principal, expected to earn over $175,000 in salary and

benefits. Where does that leave a school moving forward? And the

number of teachers we all have that are approaching or who have

surpassed $100,000 annual salaries is increasing. In the real world,

those salaries are not common.

I am not advocating for salary caps. I am just at a loss looking to

the future for a way to continue to make ends meet. The real world

work force does not have automatic annual increases. They do not have

a 10-month a year job structure. There is increased expectation that

jobs are not 9 – 5 any more. People stay at work until the job is

done, no matter how late it gets. And they give up weekends when

needed. And there is no extra compensation for work that has to be

taken home to be completed. And vacation days get eaten up by the

chaggim. These are, increasingly, the realities faced by our parent

body. And these have been the reasons we have given for justifying our

salaries (teaching is more than just classroom time, we do research and

prepare over the summer, etc.).

Charter schools, after-school programs and no-frills schools are not

the answer. The first two will wilt as soon as final exams and other

high stakes tests are encountered. Do we really expect the same effort

from students who are in a program that does not affect their GPA when

the SAT is a month away? We need to be realistic. No-frills schools

have other, external costs, as has been discussed already. The system

we have is the one with which we must work.

We need to be much more sensitive to parental fears. The current

financial crisis has actually given us that opportunity. Cutting costs

where possible, holding staff salaries in place, making a serious drive

to increase gifts from donors, and a minimal increase in tuition shows

that we are looking to spread the burden across all stakeholder groups.

That worked this year. My real worry is what to do if next year is

equally economically dismal. Where will we cut then? I have no answer.

Not for 2010-11. Not for further down the line.

Eliyahu Teitz

My earlier comments were written from a parent’s perspective, having heard almost all of what I wrote in conversations with parents over the past year or two.

Personally, I feel many teachers (and I am lucky to count many of them on my staff) are selfless in their devotion to their students. They do not know the meaning of punching a clock. Many are the graduates of JEC that still call their rebbeim and other teachers, at times even late at night, to discuss life’s important decisions. There is no way to put a dollar figure to what that is worth.

But that does not mean that parents are not reaching a breaking point. And my post was intended to express that concern, from their point of view. We, as educators, must understand their perspective, because they are the purchasers of the service we provide. The consumers of our service, our students, probably do not stop to consider a cost/benefit analysis, but the purchasers certainly do. And they want to buy our product, but we might be placing it out of their reach.

So much for the parents’ perspective.

There is a significant flaw in that outlook. And it is a challenge that extends to the entire spectrum of Jewish living, as well as the greater world around us.

We live in a world of entitlement. Everyone feels they have things coming to them. The sense of sacrifice has mostly been lost. Yes, there are remarkable example of the opposite, but by and large, people today expect to have without having to give up to have it.

Sleep away camp has gone from being a luxury to a necessity. Pesach at a hotel. Winter vacation at Disney. Summer vacation on top of that, for those who can manage the days away. High-six and seven digit 401Ks and IRAs. A fully vested college fund.

With all of these absolute, indispensible necessities where is there room for tuition?

People purchase houses and calculate how they can manage their mortgage payments without taking into account that there are tuition payments as well. No one forgets to calculate the bite taxes take out of income in calculating available income for mortgage payments. But tuition, there’s always a scholarship for that.

In past years, people worked two jobs to pay their educational obligations. Many of us took out loans to get through college. Today’s parents won’t hear of it. Let the day schools carry me so I can put money away for my child’s college. Or, more accurately, let the day school raise tzedaka to pay for my child’s college education.

Gone is the feeling that tuition assistance is actually a request for charity. If communal rabbis would only do one thing, it should be to stress that taking a scholarship in a situation where there was not absolute need is tantamount to stealing from tzedaka.

The biggest difficulty with that message is that there are those who really do need the help and these very words might embarrass them into not asking, which would be criminal. For there is a real need in the community for help in paying tuition. The abusers of the system make it so much more difficult for those in true need.

In the long run, though, we are reaching a tipping point. Three children in day school can, and in some communities does, cost upwards of $50,000. That is, to most families, the single largest expense in their budget. And they are collapsing under the strain. And there is no end in sight. I was at a meeting the other night where the tuition crisis was discussed. One person asked that there be some sort of formula so that he would know that with an income of $150,000 there would be some maximum bill to pay for education. It is a reasonable request. Problem is, it can’t be done. Because one family earning $150,000 might be able to put away $25,000 annually into a retirement fund (I have yet to see teachers be able to put that much away regardless of their pay), while another family has unreimbursed medical expenses of $15,000. There is no valid basis for comparison based solely on the bottom line. So we can not give that relief.

But we have to talk to the issue. With compassion. With understanding. And, true to our calling, with education. We must find a way to open the eyes of our community to our feelings of entitlement. Without defensiveness. With warmth. The message we have to give is not an easy one to accept. But if we are to change this one aspect of the culture of our community, we must be understanding of the other’s perception and concern. We must also step outside ourselves and check what our feelings of entitlement are, because rare is the person who is totally selfless. We all have needs, but are some of our needs as necessary as we might like to think they are.

But even if the lesson will be learned, it will not solve the problem. We will only delay the day when parents will not be able to pay to educate their children. Large communal funds are not the panacea they seem. A well managed endowment with $100 million in it will spin off between $5 million to $7 million annually. How many donors will it take to get to the $100 million? And how many schools will get a piece of that pie? And in the era of Madoff, who will manage the fund, and how do we know it will be properly managed?

So I leave where I left last time. Just as much worry and just as few answers.

Eliyahu Teitz