When will Private Schools' bubble burst ?

[Anonymous]

Anonymous wrote:

Anonymous wrote:35k , who is paying that next year? It's now 40k( oh ,excuse me: $39,750) .35k is soooo "last year" .

http://www.maret.org/admission/affording_maret/tuition_fee_summary/index.aspx

wow, Maret seems to have joined the arms race too. The figures you link are a SIGNIFICANT increase from just two years ago. Maret used to be the best deal in town. Heck, now its "only" 32K a year.

[Anonymous]

Anonymous wrote:Remember to factor in financial aid--e.g., Sidwell gives about $6m in aid per year, so it collects closer to $31m in tuition by your numbers. I'm not saying the school is suffering in any way, but that is a significant adjustment.

Sidwell, and all other "Big 3" collect 1 million or so from parents in the annual auction to fund FA. They also earmark a small 1% endowment draw to go to FA. So, no, sorry, 6 million or 3.8 million in FA at other schools is NOT solely coming from tuition revenue.


A non-profit, by definition, and by tax law cannot earn a profit. So, where is the money being allocated to make the SIGNIFICANT profits disapear on paper ? Talk to some teachers, its not going to their salaries. There is a cap on FTE based on zoning restrictions in the neighborhoods of which these schools are a part, so thse profits are not going to ever escalating FTE ( that FTE has a HARD cap)

So, why do they need to raise tuition every friggin' year by 4-6% ?

[Anonymous]

Anonymous wrote:

Anonymous wrote:There is no doubt there are still a lot of families who can afford to pay 40k, but there are less. At 20k a year the selection would have been more on "how bright the kids are"
At 40k it is more about who can afford it.

And take in from someone who sees the effect on the classroom: it shows

+1000

[Anonymous]

It's not coming solely from the tuition revenue, but it means that tuition revenue is lower (sometimes significantly lower) than it would be if everyone were paying full freight.

[Anonymous]

I think it's possible the well-regarded independent and parochial schools could even get more/stronger applicants as a result of tuition increases at the "name" K-12s. My kids attended a well-regarded independent K-8 that cost much less than $35K. There were fewer fancy frills, of course, in the way of fabulous gyms and cafeterias serving organic vegan options, but we didn't miss these.

I do think it's more expensive to educate HS kids than ES kids because you need science labs and such. But there has to

When I went to private school in the 1970s, at the most prestigious of my city's private schools, the student population consisted mainly of 1. the rich (old money that had been doing private for generations plus new money and yes, although I'm not the car dealership poster, we had one if these), 2. Teachers' kids who were getting a discount, and 3. Kids for whom the perfectly good publics weren't working out for whatever reason. I wonder if we 're going to see a return to that.

[Anonymous]

Anonymous wrote:One poster is hovering on this thread repeatedly, and falsely claiming, that NW DC privates do not take in 40 million a year in revenue. Every time he/she posts he under-reports either the enrollment ( under-reports by say 500 students) or under-reports tuition ( ignores that this year every school hiked tuition 4-6 % again, just like they did the year before and the year before , and the year before. My point is: if this were any other business, would not the consumer balk at the price of the product DOUBLING in 6 years ? Just where , where, is the 40 million in annual revenue going ? where?

Keep in mind, these figures are based on LAST YEARS Tuition, and next year it will be $2,000- $3,000 more at every school.

Sidwell: Enrollment( from their website) : 1,075 X tuition $35,000 ( last years figure)= 37 million in tuition revenue alone ( before we get to capital campaign, annual fund)

GDS: Enrollment( from their website) : 1,075X tuition $35,000( last years figure)=37 million in tuition revenue alone ( hey, any GDS parents know what their cc raised this year?)

Cathedral Schools: Enrollment( from their website) : 1,150 studentsX $37,000( last year)=42 million in tuition revenue alone( ? capital campaign/? annual fund)

WIS: Enrollment( 850)X $32,000= 27 million in tuition revenue alone ( ? capital campaign)

All of these schools claim non-profit status. So, where do these amazing profits go ? teacher salaries ? Anyone talk to any teachers lately ?

seriously, why has tuition quintupled in last 20 years and doubled in the last 6 years? where the heck is all that money going ? Capital campaigns have paid for the building improvements and IT additions, so THAT is not where money is going.

Good god, you are tiresome. If you want to know where the money's going, just look at the 990s. You were told that several pages ago. Yet you whine and whine and whine, but you refuse to do even an ounce of work to find the answers you seek.

Here are 990s for GDS, Maret, and WIS. Each school has expenses about equal to its revenue. If you look at the detailed expense breakdowns, you'll see that for each school, about 50% of the expenses are for salaries, about 10-15% for grants and assistance (ie, financial aid), about 10-15% are for things like payroll taxes, 401k contributions, and employee benefits. The rest is for assorted boring stuff like accounting and legal fees, interest on debt, office expenses, insurance, depreciation, and tuition discounts. It's as if you think the money's going to buy cocaine and firearms for Nicaraugua. Reality is far less interesting than your conspiracy theories.
http://990s.foundationcenter.org/990_pdf_archive/530/530211355/530211355_201006_990.pdf
http://990s.foundationcenter.org/990_pdf_archive/530/530204701/530204701_201106_990.pdf
http://990s.foundationcenter.org/990_pdf_archive/520/520822077/520822077_201006_990.pdf

If you'd like to compare these to a public school budget, I've even dug up the MCPS budget for you. It seems to be an increase of 2.3% over the prior year. You can read all about how MCPS saved $43m by opting not to contribute to the Retiree Health Trust Fund, and saved another $9m by eliminating certain textbooks. Quick math suggests MCPS is spending about $14.9k per student ($2.22 billion for 149k students).
http://www.montgomeryschoolsmd.org/about/

I tried to find the DCPS budget for you, but DCPS does a better job hiding its actual numbers than many of the private schools. I find this (http://dcps.dc.gov/DCPS/About+DCPS/Budget+and+Finance), but couldn't find a clear statement of expenses. The Wiki page for DCPS says its budget is $1.22 billion for 44,000 students (a staggering $28k per student!). But I also see several news articles indicating the DCPS budget is actually just under $2 billion, which if true, means DCPS is spending $45k per student per year. I don't know about you, but if I were to suspect anyone of blowing their budget on cocaine and firearms, I'd look at DCPS first!

Please do some research before posting again.

[Anonymous]

We are a two physician family with a HHI of 450k and 3 kids. We have decided that we cannot afford private elementary. We will revisit for MS and HS. DH and I were private school kids here in DC and always assumed that our kids would follow suit, alas...

[Anonymous]

I'm sorry, PP, but of course you can afford it. What you mean is that it isn't worth it, which is a whole other topic, and a valid one.

[Anonymous]

I tried to find the DCPS budget for you, but DCPS does a better job hiding its actual numbers than many of the private schools. I find this (http://dcps.dc.gov/DCPS/About+DCPS/Budget+and+Finance), but couldn't find a clear statement of expenses. The Wiki page for DCPS says its budget is $1.22 billion for 44,000 students (a staggering $28k per student!). But I also see several news articles indicating the DCPS budget is actually just under $2 billion, which if true, means DCPS is spending $45k per student per year.

PP again. I did further research on this point because I got curious. I initially assumed the DCPS numbers had to be wrong, because they are so high. But they aren't; this is all related to how budgets are calculated. It's weirdly complicated.

It seems that what's going on here is that lots of the education costs for county students (like MCPS and FCPS) are covered by state education budgets, so we never see them in the county education budgets. Unlike MCPS and FCPS, DCPS does not have a corresponding state education budget to help cover costs, so all education costs are included in the DCPS budget. See here and here. I'm not totally positive, but I suspect these state-level costs are things like construction funds and debt servicing: cost items not directly linked to education, but rather with the underlying infrastructure supporting that education.

MCPS and FCPS budgets focus on spending per pupil (i.e., costs more directly linked to educating students). If you parse through the DCPS budget, and limit it to categories equivalent to MCPS and FCPS, DCPS spends about the same as MCPS and FCPS on students: $488m total, or $10k per DCPS student, versus $15k per MCPS student, versus $18k per FCPS student.

However, this all leaves unanswered a big question: If the "true total cost" of educating a MCPS or FCPS student is not fully reflected in local MCPS and FCPS budgets, because of the state-level budgets, then what is the actual amount of education dollars being spent per student when those state-level budgets are included? Is the "true total cost" of educating a MCPS/FCPS student closer to the $30-40k reflected by the DCPS?!? That seems nuts, but I can't find a clear answer. If anyone more informed can help me, I'd appreciate it.

Also, what does all this have to do with private school costs? Well, if you think about it, private schools don't have any state-level budget help. So when you see a private school charging $35k per student, that's an all-in cost that includes all the underlying infrastructure which seemingly is included in the DCPS budget, but not in the MCPS or FCPS budgets. In that light, the $35k/student cost of private school may be pretty similar to what it costs local public schools to operate.

I'm sure I've misunderstood some of the details here, so if someone understands these DCPS budget issues better than I do, I'd appreciate hearing your input.

[Anonymous]

Anonymous wrote:

Anonymous wrote:One poster is hovering on this thread repeatedly, and falsely claiming, that NW DC privates do not take in 40 million a year in revenue. Every time he/she posts he under-reports either the enrollment ( under-reports by say 500 students) or under-reports tuition ( ignores that this year every school hiked tuition 4-6 % again, just like they did the year before and the year before , and the year before. My point is: if this were any other business, would not the consumer balk at the price of the product DOUBLING in 6 years ? Just where , where, is the 40 million in annual revenue going ? where?

Keep in mind, these figures are based on LAST YEARS Tuition, and next year it will be $2,000- $3,000 more at every school.

Sidwell: Enrollment( from their website) : 1,075 X tuition $35,000 ( last years figure)= 37 million in tuition revenue alone ( before we get to capital campaign, annual fund)

GDS: Enrollment( from their website) : 1,075X tuition $35,000( last years figure)=37 million in tuition revenue alone ( hey, any GDS parents know what their cc raised this year?)

Cathedral Schools: Enrollment( from their website) : 1,150 studentsX $37,000( last year)=42 million in tuition revenue alone( ? capital campaign/? annual fund)

WIS: Enrollment( 850)X $32,000= 27 million in tuition revenue alone ( ? capital campaign)

All of these schools claim non-profit status. So, where do these amazing profits go ? teacher salaries ? Anyone talk to any teachers lately ?

seriously, why has tuition quintupled in last 20 years and doubled in the last 6 years? where the heck is all that money going ? Capital campaigns have paid for the building improvements and IT additions, so THAT is not where money is going.

Good god, you are tiresome. If you want to know where the money's going, just look at the 990s. You were told that several pages ago. Yet you whine and whine and whine, but you refuse to do even an ounce of work to find the answers you seek.

Here are 990s for GDS, Maret, and WIS. Each school has expenses about equal to its revenue. If you look at the detailed expense breakdowns, you'll see that for each school, about 50% of the expenses are for salaries, about 10-15% for grants and assistance (ie, financial aid), about 10-15% are for things like payroll taxes, 401k contributions, and employee benefits. The rest is for assorted boring stuff like accounting and legal fees, interest on debt, office expenses, insurance, depreciation, and tuition discounts. It's as if you think the money's going to buy cocaine and firearms for Nicaraugua. Reality is far less interesting than your conspiracy theories.
http://990s.foundationcenter.org/990_pdf_archive/530/530211355/530211355_201006_990.pdf
http://990s.foundationcenter.org/990_pdf_archive/530/530204701/530204701_201106_990.pdf
http://990s.foundationcenter.org/990_pdf_archive/520/520822077/520822077_201006_990.pdf

If you'd like to compare these to a public school budget, I've even dug up the MCPS budget for you. It seems to be an increase of 2.3% over the prior year. You can read all about how MCPS saved $43m by opting not to contribute to the Retiree Health Trust Fund, and saved another $9m by eliminating certain textbooks. Quick math suggests MCPS is spending about $14.9k per student ($2.22 billion for 149k students).
http://www.montgomeryschoolsmd.org/about/

I tried to find the DCPS budget for you, but DCPS does a better job hiding its actual numbers than many of the private schools. I find this (http://dcps.dc.gov/DCPS/About+DCPS/Budget+and+Finance), but couldn't find a clear statement of expenses. The Wiki page for DCPS says its budget is $1.22 billion for 44,000 students (a staggering $28k per student!). But I also see several news articles indicating the DCPS budget is actually just under $2 billion, which if true, means DCPS is spending $45k per student per year. I don't know about you, but if I were to suspect anyone of blowing their budget on cocaine and firearms, I'd look at DCPS first!

Please do some research before posting again.

Yes, the reference to the 990 was several pages back. my point is that those are vague figures, no specifics. When is the last time the 990's were audited? I'd like to see of the 50% going to "salaries" how much of that is going to teachers who teach in the classroom vs multiple layers of Admin. I am quite sure you yourself know that all of these schools are not down to the bare bones with EVERY dollar allocated, yet you represent that here. Why is that ? No one is that obtuse. What is your interest in this debate ? Upper middle class families are getting gauged left and right. That concerns us all.

[Anonymous]

Why don't you read the 990s? They allocate expenses between program (teachers) and administrative

[Anonymous]

12:39 has not posted the actual 990's for GDS,Maret, and WIS and he knows it. What he has posted is 4 years old or more. (Peter Branch retired several years ago). Tuition has been hiked at least 24% since these 990's submitted. Lets see the trend with the old 990's to now, and why the 24% increase in tuition.

PP, why did you deliberately post 990's that were 5 years old ?

[Anonymous]

Anonymous wrote:12:39 has not posted the actual 990's for GDS,Maret, and WIS and he knows it. What he has posted is 4 years old or more. (Peter Branch retired several years ago). Tuition has been hiked at least 24% since these 990's submitted. Lets see the trend with the old 990's to now, and why the 24% increase in tuition.

PP, why did you deliberately post 990's that were 5 years old ?

I posted the most current ones available. You should learn to do your own research. Better yet, you should thank me for helping you.

[Anonymous]

So, person who is so exercised about this, get some more current 990s on Guidestar, compare them with the 2009 990s, and report back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:23:53, I'm not going to try to argue with you point by point. I gave you a long list of expense categories and you appear to reject it in total. I wouldn't say I'm naive -- I happen to think the area independents have too many FTE positions that are not crucial to their core missions -- but I do listen, ask questions, and pay attention to the answers.

Your contention that schools in this area have $40 million in gross revenue or routinely raise $10-$20 million a year is just silly, honestly, as is your insistence that the average independent school has something like 900-1000 students. The bigger K-12s may be in that range (Sidwell, GDS), but many schools are closer to 500 (St. Albans, NCS, Georgetown Prep, Georgetown Visitation, St. Andrews) and quite a few others (such as Landon, Holton, Bullis, Maret) are between 600-650 students.

I don't disagree with the bottom line point that tuition costs are too high and have to be corralled, and that schools need to make hard choices to do that, but your "40 million a year in revenue" language will make it impossible for anyone to ever take YOU, specifically, seriously.

LOL. you prove by your need to repost each time I do, that you , in fact, take this information being posted VERY seriously. It is accurate and you know it.

Is your only come back to falsify the facts until you are called out and to engage in ad hominem attacks. You are just bringing MORE attention to the issue.

Okay, first of all, there are multiple posters who are responding to you. (I'm not the poster who is seeking to have you name the school that charges $40,000, for example.) I do not know how you can keep saying that $40 million a year in revenue is not only "accurate" but that "I know it." I've been very specific and listed nine schools with enrollment under 650 -- not one of those schools has revenue anywhere near $40 million per year. Your statements about development also lack any sort of basis in fact.

I will give a couple of very specific examples, with sourcing, where available. First, let's look at Bullis School:

1. Bullis has a stated enrollment of 645 (http://www.bullis.org/admissions/bullis-at-a-glance/index.aspx). Their tuition in 2013 will range from $31,600 - $35,000, depending upon grade (http://www.bullis.org/admissions/tuition-fees/index.aspx).
2. Total revenue from tuition, ROUNDING UP to the highest tuition figure ($35,000) for all students and NOT INCLUDING FINANCIAL AID, would be $22.575 million.
3. Bullis averages approximately $900,000 in Annual Giving, as they announce in their own magazine (http://www.bullis.org/admissions/tuition-fees/index.aspx).
4. Bullis has an endowment of approximately $9 million, as they announce in their magazine (http://issuu.com/bullisschool/docs/bullis_magazine_fall_2011_-_final_with_web_caption). A 5% draw from that endowment would yield $450,000 in revenue.
5. Total annual revenue, before financial aid is subtracted, is therefore approximately $24,000,000. (It is reasonable to assume about $1-2 million in financial aid, so the real number would be $22-23 million).

In order to meet your "40 million in yearly revenue" figure, you are saying that this school with annual giving under $1 million and an endowment under $10 million raises $17-18 million in capital contributions each year. Obviously, that is not the case.

Let's take the case of a "big three" school, St. Albans.

1. Enrollment of 575 students, at $37,000 in tuition for 2012-2013. Total potential tuition revenue: $21.3 million
2. Financial aid to 28% of students (as per St. Albans website) with the average award of $25,000, giving a financial aid total of $4 million. (http://www.stalbansschool.org/page.aspx?pid=2722)
3. Thus, the net tuition revenue is $17.3 million.
4. St. Albans has a reported endowment of $45 million (http://www.boardingschoolreview.com/school_ov/school_id/512). A 5% draw on that is $2.25 million.
5. St. Albans raises about $2.15 in annual giving each year (see their website for most recently announced total: http://www.stalbansschool.org/page.aspx?pid=2791)
6. Total annual revenue, including financial aid, comes to about $21.65 million.

So, according to your assertions, St. Albans is raising $18 million every year in capital gifts. However, according to their most recent development report on their website, they raised approximately $4.1 million in capital gifts in the most recent calendar year. (http://www.stalbansschool.org/page.aspx?pid=2791)

Even STA's largest capital campaign in its history, which ranged in length from 5-7 years, raised $67 million in capital gifts (the announced $82 million total includes $15 million in annual giving, which suggests that the campaign ran a total of 7 years given the $2 million average annual giving). That capital campaign was not business as usual for St. Albans (as you can see given this year's $4 million in capital gifts after the end of their biggest capital campaign ever), but even if you did add on $10 million in capital gifts, that would still put the revenue at $31 million in the highest capital fundraising year (and they used $44million of that capital campaign to build a building -- so you can't just dip into that extra capital money to pay the ordinary bills).

I've given you two examples, with sourcing. I'm not sure why it is so hard for you to back off your "$40 million in annual revenue" claim, honestly.