AVI CHAI concluded its general grant making on December 31, 2019.

Fair Share Tuition—Equitable But Not Sustainable

Posted by: dperla

November 8, 2011

By: Dan Perla

A recent article in The Forward entitled “School Tuition Should Be Based on Income” by Aurora Mendelsohn, makes the case for income-based tuition policies for Jewish day schools. The article advocates for a fair share tuition scale that would be akin to what many synagogues use in assessing dues. There is just one problem with such a program-while it may be more equitable, it isn’t sustainable.

The vast majority of school fair share or sliding scale tuition programs cap the maximum tuition at a rate  close to or just slightly higher than current full tuition rate.

So while middle and some upper middle income families will undoubtedly pay less, there isn’t enough incremental income from the top tier to offset the reduction in the middle. The Hebrew Academy of Morris County (HAMC) provides a good example. The school offers a sliding scale of tuition for families earning between $120,000 and $200,000 per year. These families pay between $6,000 and $9,500 per child for tuition depending on their exact income and number of children. Full tuition at HAMC is capped at about $18,000. The discount offered to middle income families is not offset by the highest tuition levels. In other words, absent additional outside funding, the school would likely be in worse financial shape under the fair share program. In HAMC’s case, the additional funding comes in the form of an endowment set up by local philanthropists Paula and Jerry Gottesman.

Manhattan Country Day School provides another example of how fair share systems aren’t necessarily self-sustaining. While not a Jewish day school, Manhattan Country Day School has a sliding rate program which bases tuition on a graduated percentage of parental income. The percentage ranges from 7%-12% of pre-tax income per child. The cap on tuition for this elite Manhattan school is a whopping $36,000. Even at this significantly higher overall tuition level, Manhattan Country still relies on endowments and general fundraising to sustain it financially. To quote from the school’s web site “Although 70% of our income comes from student tuition, that revenue alone cannot sustain our superior level of education”.

To be sure, in most day schools across the US and North America, a $36,000 tuition cap would create financial sustainability. But a price hike to this level would run the risk of alienating wealthy families and encouraging them to explore other options—lower priced day schools, or for the same money elite private schools. It would also have a dampening effect on voluntary giving. According to statistics compiled by Yeshiva University’s Institute for University-School Partnership (in a program funding by The AVI CHAI Foundation), the average day school raises 20% or more of its budget from fundraising.  Much of this money comes from day school parents who voluntarily give more than required.  At the SAR Academy, the day school that my children attend, there are at least a dozen families that voluntarily donate $100,000 each per year.  If we suddenly forced these wealthier families to pay 50% more in tuition by virtue of their income, I strongly believe that their voluntary giving would plummet.  I know mine would.

On the wide spectrum of day school funding solutions, I believe there are better solutions than fair share. One of them is a concept which Ms. Mendelsohn cites in her article as firmly rooted in Jewish thought.  It is communal funding for day schools. In order to achieve real financial sustainability, day schools need to be viewed as a communal obligation. There are various communal funding initiatives taking place across the country. Bergen County’s NNJKIDS program provides one example. According to its web site, in its first two years of operation, NNJKIDS distributed over one million dollars to Bergen County’s seven day schools. The money was raised from over 1,000 individuals, the majority of whom are non-day school parents. NNJKIDS is now looking at much more ambitious goals for communal funding that could more radically change today’s tuition model. It is said that a rising tide lifts all boats.  Communal funding for day schools might just be the high tide that the Jewish community has been waiting for.

Dan Perla is Program Officer of Day School Finance at The AVI CHAI Foundation.

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