A way to solve the tuition crisis

amother

Emerald

Sun, Jun 30 2019, 11:55 am

Mommyg8 wrote:

Yeah, but that would be like biting the hand that feeds them.

I'm not really sure what the aveirah is of living well if you have the money?

No aveira, but it raises the bar. If wealthy kids are coming with all sorts of designer shoes, bags etc, and making fancy parties for every birthday, the other kids feel like they MUST do the same. What they do outside of school is one thing, but when it starts to affect the values of the community, it becomes an issue. This is how we end up with kollel families who live on tzedaka but their kids need every new trend that comes around - from designer strollers for infants to huge fancy bar mitzvas and weddings.

amother

Emerald

Sun, Jun 30 2019, 11:59 am

amother [ Gold ] wrote:

So I can ask my dh because different children he did different arrangements. I think he said to someone that we do 10,000 per child. We don't use it for tuition but if you don't want it be able to be used for house, and your children's retirement then that might work for school.

We started off by doing a small amount a month instead of one big lump sum. If your kids are just getting married now please keep in mind that there might be a lot of grandchildren involved and you aren't going to want to treat the later ones differently.

Even a small amount put away helps though...

My grandparents bought savings bonds for each grandchild and great grandchild for birthdays, yomim tovim, and just because. As the family grew, they gave less when it wasn't that child's birthday (yes, we each got for everyone's birthday), but it was enough to pay for most of the wedding expenses for each of my first two kids. even putting away a small amount for each child now will help a lot in the future.

Mommyg8

Sun, Jun 30 2019, 12:14 pm

amother [ Emerald ] wrote:

I disagree. If the small percentage of children from really wealthy homes wear designer shoes, bags, etc, that does NOT mean that all the other children in the class have to follow. It's time to teach our children that we DONT have to follow the Cohen's, and it's ok to live within our own income level (and maybe we can teach the parents too).

The issue, IMO, is NOT that the wealthy are living wealthy, it's that the middle class (people who really can't afford to live upper class without using credit cards, savings, etc) are living like they're really upper class. It's because everyone HAS to have the same thing, and we HAVE to follow, or surpass, our neighbors, family, and friends, that we have an issue.

No it's not the wealthy (who are living within their means) that's the issue. It's the rest of us.

amother

Green

Sun, Jun 30 2019, 12:18 pm

amother [ Emerald ] wrote:

It's not the wealthy families that are flashing their money usually. They are usually secure and don't need status gained from wearing upper middle class status symbols unless they are new money. It's the ones that want to signal they are doing well financially that are causing the problems.

A wealthy person would never ask what are the status items so my kid can be popular in camp. A wealthy person doesn't worry about what everyone else is dressing their kids in. It's not the top rung that is causing the problems in this community.

amother

Maroon

Sun, Jun 30 2019, 12:21 pm

amother [ OP ] wrote:

Please bear with my math here....

I recently started looking into investing. It turns out that index funds, without management, AVERAGE about a 7% return over time, after adjusting for inflation, although some years drop and some gain.

I tried to figure out a number that, if invested at birth, would pay for tuition + camp + chasunas.

Here's the numbers I used:
$8,000 annually for K to 4th grade
$10,000 for 5th
$11,000 for 6th
$18,000 for 7th and 8th
$22,000 for 9-12th
$25,000 for 2 years thereafter
$50,000 for chasunah

The magic number turned out to be $125,000. With a 7% annual return, that left about $0 at the end. Using actual annual gains, from a 20 year period, it left about $225,000 at the end (despite several years with severe losses).

So, if every frum child had $125,000 invested at birth, their tuition and chasunas would be paid for. If the market did well, there would be enough left over from each child to put an additional TWO children through a complete Jewish education and marry them off!

Now how do you get that kind of money?

Let's take a hypothetical 1,000 frum families. We'll give them each an average of 7 children, for a total of 7,000 children, born over a 50 year period. If each of those families would give a very generous $1,500 a month ($18,000 a year) for that same period, it would be enough to set up a fund for each baby born to that group.

Of course this only works properly if it is done before the children are born. But it does demonstrate that if a Kehillah tax of $1,500 monthly (or less, depending on number of families, average number of children, and how many are over childbearing age) was levied on families, and this amount was invested specifically to provide an education fund for each child, then there would be no more need to fundraise for tuition or for chasunahs.

And, I venture to say, $1,500 monthly is much less than most of us are paying for tuition now.

Communal programs is not the answer to problems. At most, it's a band-aid that will eventually fail to heal the wound. At worst, it will create bigger problems. I.e. causing tuition prices to skyrocket; the burden eventually falling largely on a small percentage of the community; control of the funds, etc;

What we rather need is focusing on financial sustainability for each individual. Include budgeting and financial classes in high schools & yeshivas, educate & preach about living with one's means, and include financial goals as a necessity during the engagement process. Each young couple should set up their life accordingly to what they decide, instead of just following the crowd and expecting others (gov't, parent's community) to pick up the tab for them.

If someone wants to live a kollel lifestyle - they should do whatever it takes to get them there. Whether it means living in a basement out of town, doing without some comforts, setting up Yissascher-zevulen agreements and so on. If they still can't make it like that, then perhaps they should consider that Hashem may want a different path for them. The same goes for any couple, regardless of what they choose. Teaching and preaching financial stability & living within one means, will do much more for everyone than applying band-aids.

If every couple at least tries to make ends meet within their means, the number of people asking for outside help will definitely decrease. While at the same time, there will be an increase in the number of people who can offer aid to those who truly couldn't make it on their own.

amother

Wheat

Sun, Jun 30 2019, 12:34 pm

Mommyg8 wrote:

This

Why does everyone always think they need to have everything?

When did it become a sin to say you can't afford something?

I get all the time people saying comments that I only dress my kids in clothes from Walmart

My kids are happy in Walmart clothes my husband is happy that we're not going into debt and I'm happy that everyone has what they need

amother

Emerald

Sun, Jun 30 2019, 12:34 pm

Mommyg8 wrote:

You are right that they don't need it, but they feel like they do. Peer pressure is a very powerful force.

It is true that we, as parents, need to take control and send a clear message to our children that they don't need everything that they see. Unfortunately, this is not an easy thing to do.

Where I live, there are very few people who have fancy strollers and other status symbols, so it doesn't affect my kids as much. The must haves in their schools are smaller, less expensive - and therefore harder to say no to.

But I see girls from wealthier neighborhoods, and feel like crying. Many of the families were living there before the prices went up, and can't afford the things that everyone seems to have, but they buy it anyway. We are so afraid of our kids getting upset about "mere things", since we see and hear of so many going off the derech over less.

Mommyg8

Sun, Jun 30 2019, 12:59 pm

Forgive me if I take apart your post a little:

amother [ Emerald ] wrote:

You are right that they don't need it, but they feel like they do. Peer pressure is a very powerful force.

True, it's a powerful force, but not as powerful as people think it is. Parents in the old days were not afraid to say no, what happened?

And if it would truly be only the very wealthy who are living this way, the pressure would not be as great. It's because "everyone " - and it's truly everyone - is living like they're wealthy that creates these expectations.

amother [ Emerald ] wrote:

It is true that we, as parents, need to take control and send a clear message to our children that they don't need everything that they see. Unfortunately, this is not an easy thing to do.

Since when is parenting easy? And if all parents would not be afraid to say no we wouldn't have this problem.

amother [ Emerald ] wrote:

here I live, there are very few people who have fancy strollers and other status symbols, so it doesn't affect my kids as much. The must haves in their schools are smaller, less expensive - and therefore harder to say no to.

How are expensive strollers related to peer pressure? I understand that a 15 year old feels peer pressure to fit in, but why are presumably adult women acting like adolescents?

amother [ Emerald ] wrote:

But I see girls from wealthier neighborhoods, and feel like crying. Many of the families were living there before the prices went up, and can't afford the things that everyone seems to have, but they buy it anyway. We are so afraid of our kids getting upset about "mere things", since we see and hear of so many going off the derech over less.

We are so afraid of saying "NO" because we are afraid. Afraid our children will end up angry at us. Or in therapy. Or OTD.

This is so sad.

amother

Chocolate

Sun, Jun 30 2019, 1:30 pm

amother [ Maroon ] wrote:

Unless "living with your means" means "only rich people deserve to send their children to Jewish schools," this argument only goes so far.

Using the numbers in the OP (no clue if they're accurate), a family with 5 children: 2 in K-4, 1 in 6th, 1 in 7-8th, and 1 in 9-12th would be paying a total of 2 * 8 + 11 + 18 + 22 = $67,000 annually post-tax to send their children to Jewish schools.

According to Wikipedia, the median household income in the US in 2017 was $61,372 (pre-tax). You are suggesting that everyone who wants to give their children a Jewish education needs to earn more, post-tax, just for tuition, than more than half of the country earns, pre-tax, for their entire livelihood.

Unless we all move to Lake Wobegon, or Jewish schools become a luxury only for the rich (an idea which is at odd with traditional Jewish hashkafa about our communal obligation to educate our children), living within means becomes radically insufficient.

I am all for reducing expenditures on Bugaboos, expensive vacations and lavish weddings, but that will only make a dent in solving our tuition crisis.

amother

Sun, Jun 30 2019, 2:04 pm

I knew I could count on the classic imamother pessimism!

To address some points brought up:

1. Yes this does account for inflation. Dave Ramsey points to a 12% annual gain over time. 7% is with inflation.

2. This does account for market fluctuations, I plugged in actual numbers, including a 37% drop in a single year, and 3 years straight of losses. Trust me, if the economy collapses and there are 10 stagnant years, this will be the least of your problems.

3. Of course this could not be tied to a specific community or school. Part of the "price" of enabling this on a communal level would be to agree that the moneys are earmarked for a specific child, and the parents of that child are given the freedom to choose ANY Jewish school or camp, subject to annual withdrawal limits.

4. Tax would need to be addressed, tax experts would know better than I the best way to structure such a thing (essentially a multi-year scholarship and one-time wedding grant).

5. Yes $18,000 is a lot of money. But using actual market conditions, there is a good chance that this would become a solid investment in the future, reducing this amount in the future and guaranteeing every child a Jewish education. Of course this would be beyond the abilities for many families, but for many families, a monthly $25,000 donation would not be asking too much. Again, the hopes is that this would become self-perpetuating, and the $18K would be temporary.

6. I don't consider this a band-aid. All of the excess spending, which is a separate subject, will not make up for the fact that tuition is impossible. I could eat beans and rice every day, shut off our electricity, and live in a one-room hovel, but still not be able to afford 3 kids in elementary and 2 in high school.

7. Of course it is difficult to enforce something like this. However, I would hope that most families would see the value in it - especially when for many, their monthly tuition bill far exceeds the $1,500 number.

8. Taking the 4.1 birth rate quoted by newspapers, if that is more accurate, it would be about $850 per month to set up such a fund.

9. If I knew that by giving several hundred dollars a month to a fund, I could ensure that my children and grandchildren don't suffer from tuition and wedding expenses like my parents and I do, I would do it gladly. Of course I could never pay for all of their schooling singlehandedly, but would love to do my part to keep others from going through this nightmare.

amother

Green

Sun, Jun 30 2019, 2:10 pm

southernbubby wrote:

You guys should go to themonseyview.com/June26, 2019 and go to page 116, The Money Man and see what the tuition collector has to say about the level of gashmius of those who ask for tuition breaks.

We are pretty sure we know who the money man is. The money man we know sounds just like that guy. The level of conspicuous consumption at that school is ridiculous and 3/4 of the kids are on scholarship.

I would love a system where each person paid for their own kids with those below poverty level were helped out. Giving scholarships to people living in large houses driving late model cars is ridiculous. Those living in small house with older cars end up supporting them.

I really don't care to DKLZ the entire parent population and say they all need cleaning ladies and vacationers.

Another school I worked at didn't pay their staff for a year, but over 90% of the girls went to Florida. Administration said they weren't getting their tuition payments. There's a disconnect with responsibilities and wants. It is a defective parent body that does that.

amother

Green

Sun, Jun 30 2019, 2:18 pm

amother [ OP ] wrote:

What do they need a community fund with those expenses for? The index funds have low management expenses since they mirror whatever index is set up to be the measuring one

It's not Imamother pessimism. It is your idea ita not workable. It is rather foolish and niave. It's ridiculous to blame people not embracing a bad idea on the pessimism of the people you are trying to sell your idea to.