tuition and home buying

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  • #602874

    fed ben fed
    Member

    After six years of living in apartment we are ready to purchase a home. However we have many concerns.

    An accountant friend, who is a fiscal conservative, told me, his biggest regret is not buying a big house. The starter home is a myth, because any extra income that one makes simply gets taken by the schools and they can never make that jump to the nice house.

    Q:Do I even need to think about tuition when buying a home? Do I need to think about future kids/expenses?

    #869097

    EzratHashem
    Member

    It depends on who you think runs the world. If the world is run by chance, then the cheaters seem to come out ahead. If Ribbono shel olam runs the world, you should just do the honest thing and let Him worry about the heshbonos & justice for the cheaters.

    #869098

    squeak
    Participant

    Maybe Hashem just likes the cheaters better. In that case, you should try to be what Hashem likes.

    #869099

    cheftze
    Member

    How is a newlywed buying a fancy house equal cheating?

    #869100

    tina18
    Participant

    fed ben fed

    I agree with every word you said –

    take it from me as im already past that point. It makes more sense to splurge on a big house and then “cry poverty” later –

    #869101

    besalel
    Participant

    fed ben fed, i have sadly given up any hope of ever buying as house because i feel the need to meet my tuition obligations. that being said, you are incorrect in your assumption that the reason yeshiva tuition is so high is because of the cost shifting. this is simply not the case. if you simply take a look at what it costs to educate a child in the public school system you will see that the yeshiva tuition is really not much more than the actual cost. the REAL problem is that the yeshiva system is the ONLY school system that relies entirely on the parent body to financially support the education of the children.

    #869102

    shmoel
    Member

    besalel: What are potential, *realistic*, solutions to the problem you’ve identified?

    #869103

    Loyal Jew
    Member

    Torah’s needs come first.

    #869105

    fed ben fed
    Member

    besalel,

    i’ve often wondered where the tuition figures come from? i assume that its simply; cost/#of students=tuition. fundraising covers shortfall and helps fund future needs (i.e. building/endowments).

    honestly i am new to this game, but do the schools give out financials? i’d be interested in seeing any schools budgets? until we see the “total cost of a school” this is all theoretical.

    lets work backwards for a second: if a class has 20 boys, each paying 7k that equals 140k. lets subtract 50k for the rebbi’s salary and 30k for the english teacher, we’re left with 60k to cover admin/building/misc. this seems reasonable to me.

    with that said tuition shouldn’t be above 7k?

    now you may say that not everyone can afford 7k per kid (which is totally understandable if you have a large famiy) thats where the fundraising kicks in to cover the shortfall.

    the issue i have is with the cost shifting. i have no problem budgeting for a reasonable tuition, its the additional 3-4k of cost shifting funds that bother me.

    #869106

    fed ben fed, i agree with you

    many people are leasing expensive cars, buying more expensive food, and supporting their kollel children,….instead of paying more tuition

    betsalel, the schools do rely on the higher tuition paid by some families for the rest only paying a little

    yes everything is from hashem but who said ppl have the right to spend on all the things they are spending on (ex. buying a house )

    instead of paying tuition

    recently some schools closed why? 95% of the families of the children in the school have many children and the fathers are/were in kollel or just went to work making small salaries which meant that hardly anyone was paying tuition

    ex. I can’t afford to go to the Jewish stores and buy clothing there because they are double or triple the price.. but if I pay less tuition, I could shop there…. yet there are people on food stamps and then are buying in these stores

    I want to go to a rav who is understanding about this and ask him what can i spend my money on even if it means paying less tuition

    I work on my bitachon/hashkafah but this issue of what are we allowed to pay for instead of paying tuition is hard to really understand b.c we could say

    hashem gave us money to pay tuition or hashem gave us money to buy a house.clothing. good food/provide for our children and whatever little is left, we will pay tuition???

    AND YES I DO AGREE THE PARENTS SHOULD BE INVOLVED OR AT LEAST PRIVY TO THE SCHOOL’S BUDGET AS some schools also raise money by dinners … and then are so strict as to who they would accept but if they are being helped by tzedakah they should be servicing the ocmmunity= i know of a school backed by millionaire but still look with a “bad eye”if you ask for a scholarship??

    #869107

    just to clarify i am not against kollel b/c everything is from hashem but again it is confusing about how to think about it all b.c i cant help to wonder how ppl are paying for things not tuition yet others are paying tuition and not for those things???

    #869108

    mewho
    Participant

    years ago some schools had bingo as a weekly fund raising activity. parents that could not pay full tuition gladly helped at the weekly bingo night. perhaps schools should go back to doing that.

    #869109

    popa_bar_abba
    Participant

    i have no problem budgeting for a reasonable tuition, its the additional 3-4k of cost shifting funds that bother me.

    I agree. It is a bit funny that we shift the cost to the other parents. I don’t see how they are more liable than any one else in the community.

    However, I think you need to build more information into your model, thus:

    lets work backwards for a second: if a class has 20 boys, each paying 7k that equals 140k. lets subtract 50k for the rebbi’s salary and 30k for the english teacher, we’re left with 60k to cover admin/building/misc. this seems reasonable to me.

    with that said tuition shouldn’t be above 7k?

    Maybe the model should look like this:

    If a rebbi’s salary costs 50k and an english teacher costs 30k, and administration costs 60k, then the cost to run the class is 140k. If there are 10 parents who can afford to pay between 7k and 14k, and 10 parents who cannot afford anything, then the tuition will have to be 14k. Then, the only choice left is whether to have a class of 10, or allow the other 10 to come.

    But, you’ll say we have more than 10 who can afford to pay 7-14k, because we could really combine all the payers into one school, and have tuition of 7k, and leave the others out in the cold.

    So that’s where I’m holding in the cheshbon now, and that may be the correct way to view it. But, I may be missing more steps. And my model will only hold in larger cities, but not in the smaller ones.

    #869110

    nishtdayngesheft
    Participant

    If you will look at any yeshiva budget, (I am not referring to the MO Schools which charge between two and three times what yeshivos in Brooklyn or its surrounding areas charge, they have a whole different model) you will see that the tuition chrged does not cover even the average costs. A large portion has to come from elsewhere.

    Bottom line is, your tuition is likely not even covering the costs to educate your own children, let alone other’s children.

    #869111

    cherrybim
    Participant

    “Q:Do I even need to think about tuition when buying a home? Do I need to think about future kids/expenses?”

    If I had thought so long and hard about buying a house and worried about tuition, I’d never have a big house. Hashem wants you to have a large home and to fill it up with children and to pay tuitions; so why are you thinking so much, leave it up to Him to figure out how it will happen. And it will happen if you make the first move.

    It may seem hard, but it’s not up to you to make these cheshbonos when you’re doing the right thing. Some things, especially the cost of maintaining a frum lifestyle don’t make sense on paper; but Hashem comes through.

    #869112

    happyOOTer
    Participant

    On one hand, it makes sense that you should buy the house you want now, before iyH your family grows even more. OTOH, we used to be on scholarship and I felt like a neb, esp. because we knew scholarship committee members. Now we’re in a “fixer-upper” but pay full tuition. It is really a HUGE relief to not have to apply for and accept scholarships anymore. This is how I comfort myself when I look around at home. I compare prices online for what I need or shop at places like Amazing Savings. I don’t have an expensive sheitel(s). We don’t take vacations or have expensive cars. I feel like this is the responsible thing to do for the sake of our children’s chinuch both at home and for their yeshiva.

    Someone with all the materialistic trappings applying for and using food stamps is “playing the system”, no matter how you justify it. IMO it is not a matter of “if Hashem wants me to have it, what’s wrong with that”, because we choose how we spend the income Hashem provides us with. Friends and neighbors see that someone is dressed to the hilt but don’t know if they’re on scholarship, right? But is that managing what Hashem has given us responsibility? What if a scholarship could otherwise be going to a family who only has chicken on Shabbos? JMHO…

    #869113

    shmoel
    Member

    Question:

    Everyone is saying that the Yeshivos costs are NOT covered by the parents tuition alone. Not even by the parents who pay FULL tuition cover all the other children who don’t pay full tuition.

    So, if that be the case, WHO is covering the Yeshivos costs not covered by the parents?

    #869114

    2qwerty
    Participant

    If you find out the real cost of a yeshivah you can subtract the extra payments from your maaser fund.

    #869115

    seeallsides
    Participant

    Isn’t this conversation a little chancy to discuss on a public site. You have made several allegations that could potentially cause harm. I am sure that you are just trying to have a theoretical open discussion, but it’s very possible that you could be detrimental……just sayin……….

    #869116

    shmoel
    Member

    You cant take maaser for girls schools.

    #869118

    CHERRYBIM, you have answered my ques, but i do not agree or at least back yourself with chazal

    how do you know hashem wants us to have a big house?

    maybe He wants us to live in a small apartment which is small -(not as comfortable but still possible) have chicken for shabboss etc… and pay as much tuition as possible?

    #869119

    fed ben fed
    Member

    seeallsides,

    i agree that YWN-CR isn’t a great place for a tuition conversation, my intent was only to see if others had a similiar budgeting situations or rabbinic insight.

    i do plan to ask my Rav for his hasgafic guidance and will always continue to seek eitza for my life decisions

    Quick Question; where would be a better place for a serious conversation?

    #869120

    2qwerty
    Participant

    Shmoel,

    Its other way around since you aren’t obligated to teach girls their tuition can be considered maaser. But I was taking about something else… anything you pay over actual cost can be considered maaser.

    #869121

    happyOOTer
    Participant

    The difference between tuition paid (income) and total expenses must come from additional income/donations, including govt. funding if accepted, and/or (lo aleinu) not paying staff.

    #869122

    fed ben fed
    Member

    happyOOTer,

    I disagree that govt. assistance will correct our tuition crisis; if anything it will cause more issues. (For empirical evidence, has any government program ever shrunken over time?

    I am absolutely confident that Klal Yisroel can fix our tuition crisis, but raising tuitions and lobbying for govt assistance is not the way.

    #869123

    seeallsides
    Participant

    it’s the alluding to activities that you don’t want to publicize that is questionable – i think talking to friends, rabbis, cherished mentors is more useful, you know where the opinion is coming from, they will discuss it responsibly….no?

    #869124

    gavra_at_work
    Participant

    It depends on who you think runs the world. If the world is run by chance, then the cheaters seem to come out ahead. If Ribbono shel olam runs the world, you should just do the honest thing and let Him worry about the heshbonos & justice for the cheaters.

    Like This!!

    #869125

    avhaben
    Participant

    gavra: Why are you working so late on a Sunday evening?

    #869126

    besalel
    Participant

    i posted the framework for a solution but it was censored off. i am not sure why. i am not going to go through the whole thing again. bottom line: it costs $10k or so to educate a child in a typical NY area community or similar metropolis. It is unfair to expect only parents of the educated to contribute to education (thereby converting education from a right to a privilege). Even the public school system and other religious school systems rely heavily upon the general populous to fund education. If we are to take this problem seriously we need to begin considering centralized billing. Maybe all the detail i gave last time got me censored so i will just throw that concept at you. A centralized system into which everyone pays whether or not you have kids in yeshiva. most of what you pay into it ends up being tax deductible too (added benefit). its obviously complicated but i believe we are headed in that direction.

    #869127

    fed ben fed
    Member

    Besalel,

    I appreciate your response and ideas. While I disagree with your idea of making tuition a “shared sacrifice”, I enjoy having an honest discussion with people, like yourself, who understand that this is a major issue in klal yisroel.

    Out of curiosity, why do you choose to abandon the current model (that everyone should be responsible for their own kids/bills)?

    I think everyone understands that being frum, while being a huge bracha, is a very expensive lifestyle (i.e. yomim tovim, tuition, living in established communities, larger families, simchas).

    Maybe we should be pushing for more advanced degrees and stronger credentials? Maybe we should be pushing for smarter financial planning?

    #869128

    Patri
    Member

    besalel: That is a good, but impractical, solution. There is no way to enforce centralized billing (especially with those with no school-age children.)

    fed ben fed: Please specifically explain what “poor choices” you refer to.

    #869129

    fed ben fed
    Member

    Patri,

    I am going to choose to gloss over this subject because of sefira and the precarious time for klal yisroel between Pesach and Shavuos (of course the impending firestorm of comments helps too:-)

    for an extreme example: I think we can agree that being an ice-cream taste-tester may be a good job for some people but it will almost never pay enough to support a frum families needs. Thus we can agree that going into ice-cream testing was a poor choice.

    To conclude: I believe that simple planning and/or research could improve many families finances.

    #869130

    besalel
    Participant

    fed ben fed – lets first start conceptually. if you believe that jewish education is a right then that means it should be readily accessible to everyone. if you believe that it is a privilege, like say, college education is, then if you can afford it you get it and if you cannot you do not. (also see the rambam, hilchos talmud torah, who places the obligation upon the entire community).

    lets now talk chomer – i wholeheartedly agree that we should be pushing advanced degrees etc etc but practically speaking, if a person is paying 4 yeshiva tuitions, he needs to earn $70,000 or so just to cover those expenses. It is unreasonable to expect growing families to commit that much earning power to cover education. even with advanced degrees we cant expect such a thing. and when will they save for the future? and when will they buy a house? (in fact, i suspect the great hesitation we see from some sectors in joining the work force is the realization that even if they work hard they will never be able to come close to cover expenses – with tuition being a great burden).

    alternatively, we can expect frum families to limit themselves to 2 children spread many years apart. not a choice that hashem will want.

    instead, if people pay a yeshiva tax the way they do property/school tax or the way the archdiocese does it, it will place the responsibility upon the community (the way it is done among chassidic communities, the catholic school system, the public school system).

    patri: we are headed to centralized billing one way or another. it sounds impractical now but it will be the way your grandkids pay tuition. i see it maybe evolving as follows: a large endowment will be established to support paying tuition. schools will want to get some of that money. people will want to apply for that money. the larger it gets the more muscle it will have in dictating to the jewish community what it needs to do in order to be eligible. shuls add a yeshiva tax upon their high holiday seats, or something of that nature. of course there will be many that will be exempt from such a tax; the elderly living on a fixed income, for example.

    #869131

    fed ben fed
    Member

    I don’t know of any statistics done on frum families finances but if anyone has access to this knowledge please share the wealth.

    I know this is not a scientific case study and the population sample shows bias, but I fear that the tuition crisis stems from similar stories across the frum spectrum (i.e. in some yeshivas the figure is 2%, 15%, 50 %,).

    Maybe I’m naive, but I wonder if we had 100%, would we still have a tuition crisis?

    all thoughts are welcome.

    #869132

    popa_bar_abba
    Participant

    A centralized system into which everyone pays whether or not you have kids in yeshiva. most of what you pay into it ends up being tax deductible too (added benefit). its obviously complicated but i believe we are headed in that direction.

    I like this idea, especially if we can make it tax deductible.

    But, I’m getting bogged down on the details.

    The notion is to provide schools free of charge to everyone who wants it, and structure it in such a way that anyone who might want it would also be in the group who would be “forced” to pay a yearly tax into the pot.

    What is our forcing mechanism, that will actually force anyone who would want the schooling?

    Which institutions have the power to enforce such a thing?

    You might imagine something along the lines of shuls not allowing you to daven there unless you’ve paid your yearly payments to the community chest. But won’t there be shuls and shteibels which won’t care?

    So maybe we’ll refuse you other community services, like gmachs and hatzala. But some will still say it is worth it and opt out.

    So maybe we’ll refuse to marry your daughters and sons. But see where we’re going?

    #869133

    writersoul
    Member

    Centralized billing cannot work unless all schools are absolutely equal in tuition and services, which frum schools are obviously not. That’s why it works in public schools.

    How will you decide which kids will go to the more expensive and possibly better schools, and how will you decide how much each family needs to pay? Will families with more kids need to pay more? Will families with kids in better schools need to pay more? Will parents be able to choose where they want to send their children?

    There are far too many holes in this plan to work.

    If I’m misunderstanding the plan please explain, but this doesn’t seem possible in a private school system.

    #869134

    besalel
    Participant

    aaah details details details. this is not the place for such details. just remember when the system is in place that some idiot on YWN once mentioned it a long time ago.

    #869135

    popa_bar_abba
    Participant

    dachtzuch mir that chicago has as fund which fundraises from the community on this theory, which then in turn funds all the orthodox schools in the city.

    uber, this is just fundraising–there is no enforcement.

    #869136

    Bar Shattya
    Member

    dachtzuch mir there is enforcement in that they put up a list of contributors and if youre not on it then your friends may notice

    #869137

    avhaben
    Participant

    And what does that do for Chicago Yeshivos? Do they provide free education? Do they charge significantly less tuition than other cities?

    #869138

    Flatbush Guy
    Member

    I have no idea how parents can afford the high tuitions that exist in the five towns or in schools such as Rambam, Yeshiva of Flatbush, etc… Thankfully, my parents and in laws helped us with the purchase of our home.

    #869139

    fed ben fed
    Member

    popa bar abba,

    While it is encouraging to hear that the leaders in Chicago seem to be addressing the tuition costs by a shared sacrifice approach have you seen the tuition decrease? Is it in fact lower than other communities?

    Because a lot of people enjoy social engineering (at least, judging by the welcome shift to the shared sacrifice approach).

    I would like to entertain a capitalistic model.

    Hold on to your seats.

    Some of you may know about the concept of structured finance. (I.e. MBS, CDO, ABS).

    You collect numerous debt obligations, like mortgages, securitize them and sell them as a Bond to investors. Each group of similar mortgages is divided into numerous tranches with associated risk ratings. Every month cash flows from the mortgages flow into the deal as interest and principle payments. The Bonds pays the investors on a monthly basis.

    The benefit of this is that the school always gets the $9M, up front ,each year! All the default risk is held by the investors!

    (For the finance types; I know this is a simple approach. I was a financial engineer for four years so I do know a little something about securitization. We could incorporate over-collateralization, senior-sub payment structure, ration stripping, default triggers, and exchanges to help mitigate risk from the higher tranches)

    #869140

    squeak
    Participant

    Are you crazy? I mean that in the nicest way possible. Who in their right mind would buy those securities? Only idiots would buy debt from people who can’t afford to pay tuition. There is also no collateral to back the notes. Default rate around 100% I’d say…

    Just pay your tuition and be done with it. Securitizing tuition, I mean really?

    #869141

    fed ben fed
    Member

    Squeak,

    You are right, that idea is crazy. No-one would buy it.

    “Just pay your tuition and be done with it” is the ultimate goal. Except some people don’t pay; i wish we could see the data. With open books this crisis can be solved.

    The Lakewood model (from what i understand) seems to be fair; everyone pays for their kids.

    #869142

    cherrybim
    Participant

    Some young families are moving back in with their parents in order to save up for a home purchase; rent, utilities, food, etc. add up. As long as there is enough (seperate) room, it can be great for all involved.

    #869143

    popa_bar_abba
    Participant

    This makes no sense.

    That would mean the parents borrow 80k upfront, and pay interest on 80k for the term of the loan. What is the purpose of that?

    #869144

    squeak
    Participant

    I assume the intent was for a 30+ year amort.

    #869145

    squeak
    Participant

    The Lakewood model (from what i understand) seems to be fair; everyone pays for their kids./

    Thus the solution presents itself. Forget about fixing the world and move to Lakewood.

    #869146

    fed ben fed
    Member

    popa bar abba,

    To answer your question; the costs of a child from k-12 (which is thirteen years) generally for most yeshivas will probably cost the parents a lot more then 80k.

    Regardless, the idea is theoretic as Squeak pointed out, that especially after the financial crisis, these bonds wouldn’t sell. I was merely trying to bring a creative alternative to the idea of shared sacrifice.

    In hindsight bringing up the securitization piece wasn’t constructive on my part. Please refer to the previous post of people getting gainful employment to be able to support their frum lifestyles.

    #869147

    fed ben fed
    Member

    Squeak,

    three points:

    1. running is rarely a good solution

    2. my life and career are elsewhere

    3. Lakewood has its own challenges

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