Day School Affordability

AJE was established to address what is commonly referred to as the Jewish day school “tuition crisis.” Simply stated, the current system leaves many families priced out of Jewish education. Financial constraints place a tremendous stress on families, compelling some of those interested in providing their children with quality Jewish day school education, to transfer their children to public schools. Parents intent on growing their families are driven to stop out of fear of skyrocketing tuition costs.

What is the tuition crisis?

There are three key ways to view the tuition crisis:

1. Price – the price of Jewish education (tuition) has been growing exponentially for close to 80 years, at a truly alarming rate, far outpacing inflation and family income. The price increases are out of control, and many are unable to shoulder the burden.
2. Financial Aid – the amount of scholarship money allocated to the average student has been rising at a rapid pace over the past few years. Financial aid spending per student has doubled in just the past 4 years. While we continue to believe that every student should be ensured a Jewish education regardless of their ability to pay, the system simply cannot sustain these trends much longer.
3. The Combination of the Two – Price increases and rising financial aid are actually related. More specifically they are part of a vicious cycle: when tuition is increased, more families need scholarships, forcing additional tuition increases.

How big is the tuition crisis?

As recently as 2007, the amount of scholarship distributed on a per-student basis in Jewish day schools ($1,400) could be paid for by the amount of donations raised on a per-student basis ($1,500). However, times have changed. Today, scholarship ($2,900 per student in 2011) has far outpaced fundraising (down to $1,300 per student), creating a significant financial gap that needs to be paid for through other means. With fundraising programs often proving to be unsuccessful in covering that gap, schools have been forced to raise tuition so full tuition payers (an increasingly rare breed) can help defray the costs of scholarship. This gap, together with the “vicious cycle” mentioned above, is the crux of the tuition crisis.

So, how big is that gap?

$2,900 per student in scholarship – $1,300 per student in fundraising = a gap of $1,600 per student.
But there are 230,000 students in the Jewish day school system, so the total gap is $1,600 x 230,000 = $368 million per year
An endowment earning a 5% return per year would have to exceed $7 billion

And those are 2011 numbers – the problem continues to get worse every year.

How do we solve a problem this big?

One thing is clear – $7 billion is a lot of money to raise, to simply sustain the existing system. Instead, we need to be innovative. We need to find ideas that we can spend money on in the short term that will pay off with tremendous returns in the long run.

In our examination of the tuition crisis, we have identified 3 key considerations:

1. It all starts with price – The tuition crisis is a price issue, and prices are determined by supply and demand. It is clear that the Jewish day school system is in a suboptimal condition with high prices, low “quantity” (i.e. enrollment), and excess capacity at many schools. So why doesn’t the price go down to equilibrium levels?
2. There’s also a cost issue – It costs a lot of money to run a school, and in this regard Jewish schools are no different than high-end public schools or other private schools. So in order to substantially reduce tuition and end the “vicious cycle” before it starts, it is critically important to reduce the cost per student to a more sustainable level.
3. Don’t forget about quality – Aside from the idealistic imperative to provide a high-quality education in Jewish day schools, there is also an economic argument to maintaining a high quality of education because we are committed to maintaining (or even increasing) the demand for Jewish day schools in order to sustain them financially.