Tuition Proposals – The Time Has Come

Submitted: Yeshivas and Bais Yaakov schools serve as the bedrock of our education system, preserving our heritage and values. It is the paramount factor that sustains the continuity of our mesorah. However, recent shifts in financial dynamics have ushered in a new era of challenges that merit thoughtful consideration.

In the past VS now:

In the past, mega-donors supported yeshivas, which helped cover a significant portion of their budget. With economic decline impacting donors’ capacity, schools are facing financial pressure. In fact, I heard from one of Klal Yisroel’s largest fundraisers that times have never been so tough…

Consequently, tuition costs are being shifted to parents. While this shift seems reasonable, it raises questions about ownership and transparency.

BMG to CEO in a year

A key aspect of budgeting is trust and management. School owners are generally well-intentioned and give up years of their lives literally to raise capital, plan, and create schools where our children can flourish. They deserve all the credit and nothing less. However, transitioning from ‘starting a school’ to navigating complex financial landscapes presents challenges for school owners. Alot is required to run a ‘corporation’ with dozens of employees, massive budgets, and Gov’t compliance. It turns school owners into CFOs, CEOs, and fundraisers in short order – a bit overwhelming!

Fiscal mismanagement is almost guaranteed to occur. Transitioning from BMG to CEO & CFO in the private sector without proper training over a short period raises important questions about the ownership structure of educational institutions.


WHO OWNS THE SCHOOL?

This makes us question, Is it our children’s school and all parents must share the burden, in which case it makes sense to add the budget, divide by the number of kids, and done!

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Or is it a privately owned entity? Can the owner take a loan/lien against the property and invest in Crypto, oil, and the like? If one day the school were to ‘close down’ would the building’s donors and parents who paid for the building via their annual tuition bills which included their monstrous mortgage payment, be reimbursed like an investor in any equity structure? In the past, Bes Din has ruled schools belong to their owner – even though it was acquired with the public’s Tzedakah money.

This brings forth the next point: Why do our buildings cost more, and are more modern than many luxury commercial properties? With over 20 million dollars invested in buildings for 500-600 children, having stunning glass and exquisite structures is a luxury we can’t afford if it exceeds our budget. The relentless pursuit of architectural excellence, coupled with hiring top-tier designers for school projects, begs the question of financial prioritization. Should parents bear the financial burden of extravagant school buildings without prior consultation, or does the responsibility lie with school owners to align investments with the community’s needs and financial capabilities? Again, if someone wants to pay for it, beautiful! But if parents will foot the bill, maybe ask them first if they want to spend 25M or 9M…

The relentless pursuit of architectural excellence, coupled with hiring top-tier designers for school projects, begs the question of financial prioritization.

To reiterate, if it is a private school owned by the school owner, wouldn’t they have ‘Skin in the game’ to make the nicest building in the world? After all it’s great Chinuch to have yards, areas to run around, luxury libraries and all – when one day their great-grandchildren will live off the equity in these luxury buildings.

Again, I do not know the answers, but the questions seem fair to ask.

PRACTICAL IDEAS:

  1. Establishing a board for financial oversight can ensure transparency and fairness in decision-making, prioritizing the needs of the students over anything else. Owners deserve a nice salary, but there needs to be oversight. (Some school owners take half a million dollars a year – on the record – plus who knows how much off the record.)
  2. Tuition was not lowered after schools made hundreds of thousands on EIDL loans, PPP, and food boxes, In fact, tuition went up right after those payments. Did the revenue go to the schools or was it a ‘side business?’
  3. Buildings should not be excessively luxurious and costly. Nowadays, buildings are larger than ever before; for example, a new school building in Lakewood is likely 50-100 percent larger than most ‘traditional’ schools in New York. The mindset of “build first and figure it out later” should not be the standard practice. This approach could be acceptable only if there is a generous donor willing to fund and maintain such a massive project. Again, a board would ensure there are no ulterior motives…
  4. Can school owners refinance their buildings or take out loans against them for investments? If a school could access $5 million in equity on a $20 million building at a 10% return in a ‘secure’ investment, it could potentially generate half a million dollars annually for the school. Again a board with financial acumen can determine this.

Recap: Establishing a board could help clarify the situation at a minimum and potentially save millions in the process. The Gemorah in Bava Basra says: A Gabai Tzeddaka collecting money who finds cash on the floor, should put in the pile with the other money & remove it after he is home – to avoid any suspicions…

Digging deeper:

If the previous suggestions are not enough, we can explore more ‘intrusive’ options. It’s probably worth considering them.

  1. Why must each school have its own building? This may have to do with the previous point on who owns the school… But from the parents’ perspective, why can’t 2 or 3 schools use the same building? It would share a lot of overhead and lower building costs – dramatically. Maybe even build a 10-story building with 5 schools!
  2. Offer parents two options. 1 – Pay in full. 2- Join the School loyalty program where everyone has to do something to generate more revenue for the school. This needs its own letter, but a preliminary concept is:
  • Rewards or Loyalty Programs – Shop at specific stores, and they’ll donate 10% for example, to the school. If many parents shop within the ‘school network’ it’ll pay itself off. This may work well particularly if the schools parent body has a number of local stores, which can gain from the ‘school network.’
  • Fairs/Expos – The businesses can sponsor booths, games, food stations, and ticket sales, or a portion of the sales from these activities can contribute to the tuition fund. Similar to the YTT Expo model.
  • Advertising Ventures – Advertising on the school’s weekly sheets or memos, there are likely many opportunities for exposure within the school network.
  • Credit Card – Parents who choose to participate could be issued a specialized credit card. By using this card, they would earn points that can be redeemed to offset tuition costs. While the feasibility of this approach for a school with 500 students is uncertain, it may be worth exploring further to assess its potential impact.

Keep in mind: Implementing these measures will not only benefit the schools but also protect them from unwarranted criticism and baseless rumors.

The system has always been broken, but when the economy was good, no one noticed. Sort of like a ponzi…

Disclaimer: The views expressed in this post do not necessarily represent Metziah’s official stance. This content was submitted by a fan and reflects their personal perspective.

Comment below & share your thoughts. To submit your letters, click here


Metziahs edit: Let’s just take a moment to appreciate the dedication and hard work of school owners. Their unwavering commitment to helping out Klal Yisroel is commendable and truly makes a difference in the lives of countless families. In my neighborhood, an individual stepped in to open a school after a number of children had nowhere to go. Literally a Nachshon – and many current schools began the same way.


Comment below & share your thoughts. To submit your letters, click here

3 thoughts on “Tuition Proposals – The Time Has Come

  1. Excellent article. School owners, while well intentioned, are human like the rest of us and susceptible to the same forces and incentives. With more of the money coming from parents now, oversight is important.

    Some of the things you propose are actually done in Chicago. They have boards, they had (when I was a kid, idk now) a loyalty program for local stores and “bais Yaakov money”

  2. This is so well written! I totally understand both sides of the argument! Parents are struggling to survive the burden of the daily living and schools are drowning in their financial burdens, with teachers and staff being way underpaid. I love this fresh new outlook on how to help both sides of this issue! I hope this rlly takes off!

  3. I’ve never responded on a blog comment section in my life and usually don’t even read the blogs and definitely not the comments. However, this one I could not let pass without responding at the audacity of the above writer and question the agenda and motivation behind the article.

    The anonymous writer above is absolutely clueless what efforts it takes or cost entails in the smooth operation of a school. Asides from the actual financial costs of running a school, have you any idea the frustration, aggravation and humiliations endured fundraising for your child. Have you even thought of how many sleepiness nights and nightmares have been my lot over the approximately 3 decades as the CEO of a Yeshiva that thousands of students have gone thru its doors.
    Do you even know what the actual cost is to educate your child/grandchild?
    I assure you that you are not even in the ballpark!

    Unless one has had the great “privilege” to occupy my seat for even one day, doubtful they would write such presumptuous ideas and snarky criticism regarding what mosdos should or should not do.
    Would one presume to tell big kosher grocery chains how to run their business or how much to charge for their products? Of course not!

    Just know that when a school is raising money, be it for operations or capital campaigns, those hero’s behind the scenes are doing what is really your personal obligation paying for you children or grandchildren’s tuition.
    I question why has no one ever criticized the Kosher food industry re their constantly rising prices and kosher groceries about their designer stores etc.
    Do you have any idea how many students I’ve never sent home when their parents are years in tution arrears. The grocer would have long ago stopped delivering and electricity would have long been turned off with similar non-payments.
    I must stop here, those who get it will get it and those who don’t….wont!

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