The tuition numbers aren’t adding up

Nachlas Bais Yaakov in Lakewood is $1.3 million in debt.

Joan Dachs Bais Yaakov-Yeshiva Tiferes Tzvi in Chicago faces a $4.5 million budgetary shortfall.

Yeshiva Torah Vodaath in Brooklyn is growing at an exponential rate and needs an infusion of $8 million to cover the costs of a capital expansion.   

Mosdos are in distress as expenses soar and longtime donors, facing the financial challenges of a faltering economy, significantly curtail their contributions. School owners have resorted to refinancing their own homes or taking out hundreds of thousands of dollars in personal loans to keep students in classrooms, but are still not making ends meet.

A family of six in Far Rockaway, New York, has a tuition bill of $60,000 a year.

A middle-class family of seven in Lakewood, earning too much to qualify for a break, struggles to pay $41,000 to cover the cost of their children’s education.

Grandparents in Brooklyn fend off requests from their grandchildren’s schools to cover full tuition costs, totaling over $96,000 a year.

More than 200 years ago, Benjamin Franklin coined the adage, “Nothing is certain except death and taxes.” These days, frum families can easily add a third item: tuition increases. Tuition, a school’s biggest source of revenue, is also the biggest monthly expense for a frum family. For both schools and parents, tuition is one of the biggest sources of distress.

Today’s frum schools are collapsing under historic deficits, while families are buckling under unprecedented tuition bills.

But why has tuition, always high, somehow skyrocketed in recent years?

How are schools and parents navigating this major source of tension?

And, are both sides doomed to remain in this chokehold, or is there any sort of solution on the horizon?

Part 1: WHY IS MY TUITION SO HIGH?

THE COST OF RUNNING A SCHOOL IS SO HIGH...

OLD EXPENSES COST MORE, AND THERE ARE NEW EXPENSES IN TODAY’S WORLD

Everyone knows utilities and mortgage prices have shot up, and kosher food vendors have raised prices by 20 percent across the board since 2021. Insurance and liability coverage, which a school needs to operate, also increased by 20 percent, according to the New Jersey School Board Association, and the cost of essential school supplies like paper has tripled since 2019. For schools with transportation, the price of each individual route has increased by at least 15 percent due to driver shortages. Bottom line, schools are just as affected by inflation as you are.

“Like the average American, our overall expenses have risen at least 30 percent over a two-year span,” says the administrator for a girls’ elementary and high school in Lakewood. “A case of cream cheese that cost $32.39 in 2021-22 costs $43.20 in 2023-24: that’s a 33 percent increase. We paid $95 an hour for a bus route in 2021-22, that cost $135 per hour in 2023-24, a 42 percent increase.”

Rabbi Moshe Bernstein is the CFO of Miami’s Yeshiva Toras Chaim Toras Emes (YTCTE), the largest non-Chabad school in the state with a student body of more than 1,400 students (and growing, in large part because of the migration from the Tristate area since Covid). Inflation has hit Florida harder than in the New York metropolitan area — springtime rating agency reports rank Florida’s inflation among the top of the country — and non-payroll costs at YTCTE have doubled over a three-year period. The school, which spent $3.1 million in operating costs in 2019, is now paying $7.5 million. Their food costs have more than doubled, and the price of transportation, which wasn’t subsidized until this academic year, has been astronomical due to rising driver salaries. (In 2019, the yeshivah charged parents $1,200 for busing, and the school had a transportation deficit of $100,000. Two years ago, they charged $3,000 — a discounted rate based on their costs — and still their transportation deficit rose, to $1 million for the year.)

Some think Florida’s schools are doing well thanks to the state’s universal voucher program, but voucher reimbursement, which is based on a state funding algorithm, covers only a small percentage of the schools’ budgets — 37 percent, in YTCTE’s case. Vouchers are not the golden ticket they are made out to be, because schools don’t get funds based on their actual costs, and parents are upset about paying tuition on top of the vouchers, because they feel vouchers should cover tuition.        While transplants from other states are a welcome addition, they have driven up the prices of real estate and construction in Florida, and Rabbi Bernstein’s pre-Covid plans for a desperately needed building expansion have gone from a projected $25 million-cost to well north of $50 million.

The economy continues to struggle, and as family sizes and expenses grow, more parents cannot afford tuition — and the schools are left footing an increasing number of tuition bills.

“A parent will come to their tuition meeting and say, ‘I know it costs $11,000 to educate each of my five kids, but I can pay only $5,000 per kid per year,’ ” one director elaborates. “If schools made that family pay cost, they would owe $55,000 per year. Instead, they pay $25,000 and consider the matter closed — and then complain that we’re harassing them when we try to collect the $25,000 that they committed to. Meanwhile, the school still needs to raise $30,000 for this one family. Multiply that by the hundreds of families in a school — and by families who don’t have five children, but eleven.”

Compounding that is the fact that tuition is not a one-time charge; children can attend the same school for eight to 12 years. The lifetime tuition deficit from that one family could be in the realm of $360,000 — assuming costs don’t rise in 12 years.

There are new expenses to take into account, as well. Rabbi Joel Kaplan, Esq., the executive director of Yeshiva Darchei Torah in Far Rockaway, New York, says that one of his school’s biggest expenses is round-the-clock security, a fee they had to pass onto parents due to skyrocketing costs.

“Unfortunately, with the state of world affairs — especially after October 7 — a campus like ours, which contains an elementary school, a mesivta with dormitories, and a kollel, could chas v’shalom be a target,” he says.

Thanks to Agudath Israel, Teach-NYS, and other advocates, a generous state legislation helps with non-personnel costs like blockades, security cameras, and unarmed security while school is in session, but Darchei has to cover a substantial portion of the rest, including armed NYPD officers on paid detail.

All of these line items add up significantly, but they haven’t touched  the biggest cause of rising costs: payroll.

In a service business, salaries are always the biggest expense. As service providers, schools fall into this category, and payroll for their representatives — the teachers — makes up roughly 80 percent of the average school budget.

“There’s no real way for a school to significantly trim expenses, because its largest expense is its most important feature,” says Rabbi Michoel Bitton, founder and rosh yeshivah of Yeshivas Ohr Hachinuch, a boys’ elementary school in Lakewood.

And with salaries the way they are, payroll is not a place schools can scale back.