A way to solve the tuition crisis

southernbubby

Sun, Jun 30 2019, 11:21 am

amother [ Green ] wrote:

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.

And here ladies is your answer. Exactly this 💯%

amother

Natural

Sun, Jun 30 2019, 11:26 am

So your solution to the "tuition crisis" is for every religious family to pony up $18,000 a year of presumably post-tax income in order to support the education of other people's kids.

Do your figures exclude the relatively large percentage of families that are already living on the edge, receiving government benefits, and just plain old don't have that kind of money. Not to mention the older families living on fixed incomes.

Is this a fixed sum, so that Malka (living in a small Jewish community with a low cost of living, who unfortunately is suffering from infertility), Chaim (widowed, no kids), Tuvia (gay), and Hirsh (millionaire, 2 kids) all pay the same?

Is this across all schools, so that the Charedim will be giving money to the MO schools, and vice versa.

Do you refuse a Jewish education to those who say no?

And since schools are already heavily subsidized, have you accounted for reduced contributions if there are mandatory contributions?

amother

Sun, Jun 30 2019, 11:33 am

amother [ Natural ] wrote:

So my solution to the tuition crisis is for every family to pay $18,000 annually INSTEAD OF $65,000 annually, to support the education of their own and other people's kids.

The same way that we ask the wealthier families to give more, a few wealthy families can give $25,000 monthly so that Malka, Chaim, and Tuvia will all be able to send their children to school and camp, and marry them off, without needing to take additional tzedakah funds.

Those who say no would be welcome to pay cash for tuition themselves. Hopefully, though, they care enough about their own grandchildren to understand that this would be a good idea to support.

The freakonomics impact of the school's bottom line if all families were paying full tuition as set now, and not necessarily donating more, is an interesting question, but try to play it out even with estimated numbers before writing it off on this point.

amother

Gold

Sun, Jun 30 2019, 11:41 am

op I'm not following.

it sounds like right now you feel that you can't afford to pay your tuition. Why do you think that on top of the tuition you can't afford you would donate this money? or are you saying of course I can't donate this money now but once my kids are no longer in school, and no longer getting married and are self sufficient themselves I'd be happy to donate. But won't you be old and looking at retirement by that point. I'm not going to go in to medical expenses....? Many frum families are having kids in to their 40s which means they are marrying off into their 60's.

or are you saying you are sure there are OTHER people who would happily donate? I can tell you my dh would definitely NOT. Based on this thread it sounds like he's not the only one either. I don't have friends who have that type of money to donate. So not really sure where you would be getting this money?

My dh would rather worry about his own family and deal with the tax ramifications. I doubt he's the only one. And yes we take maaser but we give it to whom and where we want.

amother

Green

Sun, Jun 30 2019, 11:42 am

amother [ OP ] wrote:

Amother green:

Correct, that's the advantage of index funds. They don't need management.

The only reason a community fund would be needed would be a) to get enough participants to make it work, b) to encourage more to participate, and c) to allow for structuring it to avoid excess taxes.

By all means, please enlighten me why this is foolish or naive.

I am not sure how you could avoid income tax on the gains the money makes. Is income tax what you are calling excess taxes? People are putting money in and getting money out. Tuition dollars are not tax deductible and neither are wedding expenses. I am not seeing how this benefits anyone.

Perhaps if the individual investor used a tax deferred account or an vehicle authorized under the insurance laws, there might be some advantages. But your community index fund is an index fund with no tax advantages. It would have administrative expenses. The individual family would do better on their own.

It sounds like you know a tiny bit and have little experience. At least you got a conversation going.

amother

Sun, Jun 30 2019, 12:06 pm

My tax thought would be for the fund itself to be a non-profit, and for the gains to be used to provide scholarships directly for the beneficiaries. From what I understand, scholarships are not necessarily counted as income.

Amother Gold, what you are asking is how to get over the "hump" of implementing such a plan, where the immediate needs outpace our ability to pay for the future.

I do not have kids in high school yet, so my tuition is somewhat affordable... for now. Smile

I imagine it would require something like:

1) Get a critical mass of people willing to participate, who do have the means
2) Encourage those past tuition years to begin contributing for the sake of their children/ the next generation
3) Obtain interest-free loans to begin the process for at least the newborns
4) Encourage current tuition payers to begin putting something into the fund
5) Start providing smaller scholarships to current students to begin the changeover
6) In 20 years, the majority of students are on scholarship from the fund

amother

Natural

Sun, Jun 30 2019, 12:17 pm

amother [ OP ] wrote:

18,000 a year over 45 years is $810,000. Ignoring the time value of money.

Accounting for the time value of money, each family would need to have about 10 kids to make it worth their while.

Do you really know anyone, apart from MO people with several kids in high school, paying $65,000 a year tuition?

amother

Maroon

Sun, Jun 30 2019, 12:24 pm

amother [ OP ] wrote:

I, for one, would have no interest in contributing to such a fund. If I have the means, I'd create such accounts for my kids/grandkids myself. This way I have full control of it, no matter what. I'm not beholden to any group, to any particular schools or any community & I have no worries about the fund going bankrupt.

Again, I stand by my belief, that if we teach our older teenagers the importance of budgeting & savings & we teach them how it can be done, with savings accts, etc., we'd be better off in the long run than encouraging people to be dependent on communal funds.

Such communal funds is ripe for corruption, ripe for becoming a board that controls society & ripe for been taken advantage of. It doesn't teach much in personal financial responsibility, either.

amother

Maroon

Sun, Jun 30 2019, 12:29 pm

amother [ OP ] wrote:

I knew I could count on the classic imamother pessimism!

To address some points brought up:

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.

How would this work with the vast difference in tuition costs between different communities?

amother

Maroon

Sun, Jun 30 2019, 12:31 pm

amother [ OP ] wrote:

I knew I could count on the classic imamother pessimism!

To address some points brought up:

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.

Why do you need a communal fund to do this? Set up accounts on your own, and you have full control of it to do with as you please. Why do you need someone else to be in charge of it?

(And several hundred dollars a month is a very large expense for the average young family.)

amother

Natural

Sun, Jun 30 2019, 12:37 pm

amother [ Maroon ] wrote:

Indeed.

Ploni and Plonit Almoni have been faithfully giving to this fund for years.

Their daughter, Hot Chani, lives in Lakewood; and their son, Gay Siegfried, lives in Monsey. Each wants to send their kids to the local Beis Yaakov. And ......

amother

Maroon

Sun, Jun 30 2019, 12:40 pm

amother [ Chocolate ] wrote:

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

.

The argument goes only so far only when you twist the words around.

Financial responsiblity & "Living within your means" means that when you start out married life and you know that you will need to account for tuition costs very shortly, you factor that into your financial decisions. That can either mean moving to an affordable community, having both spouses work and so on. You don't push it down the road and ignore it until it hits you in the face.

Our communities mostly ignore the concepts of financial responsibility & financial independence. If we focus on that from the get-go, when the kids are young, then I doubt we'd have many of the issues we have today.

If your words are true - that only the small number of people, the rich, can afford to send to jewish schools, then the problem is much bigger than any communal fund can override.

amother

Chocolate

Sun, Jun 30 2019, 1:14 pm

amother [ Maroon ] wrote:

I am saying that it is unrealistic to expect the average family to afford $60,000+ post-tax annually in tuition, even if they live in an affordable community with both spouses working. The numbers are just too staggeringly high. I said nothing in my previous post about cost of living, just pointed out that median household income in the US (pre-tax) is less than what this hypothetical family might pay in tuition costs (post-tax). That means that even if they live in a cardboard box, they can't afford to pay tuition. Never mind food and clothing and other (necessary, non-lavish) expenses.

I'm looking at this list of affordable cities in the US: https://www.kiplinger.com/slid......html and in almost all of them, median household income (again, pre-tax) is less than $50,000; in many cases, substantially less. Even if a family earns 1.5 x the median household income in these affordable cities, they are going to barely eke out enough to pay tuition after taxes (in some cities, not even). If they earn 2x the median household income, they may barely make enough to pay for tuition plus maybe cover rent.

Obviously, there are vocations that are well-paid and that can more comfortably afford the staggering $60,000+/year in tuition. But it is unrealistic in the extreme to expect every person in our communities to have the aptitude, skills and interest in pursuing such vocations. Expecting everyone in our community to be significantly above average is an unfair expectation.

amother

Maroon

Sun, Jun 30 2019, 1:26 pm

amother [ Chocolate ] wrote:

It's equally unrealistic to expect a communal fund to fund $60K per family in a community.

We all agree that the cost of a Jewish lifestyle has spiraled out of control and is unaffordable to the large majority. We need to come up with solutions to solve it, not try to place the burden on the small minority of the rich in the community or come up with ways to continue with the status quo. The status quo needs to go & we either need to figure out a way to bring down costs, or figure out ways where our young men & women can earn high figure incomes. Without doing either of these two options, a communal fund is merely a band-aid. With our large burgeoning societies (Baruch Hashem!), a communal fund is merely a band-aid, a pyramid scheme, with kicking the ball down the road.