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Private & Independent Schools
Reply to "When will Private Schools' bubble burst ?"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Health care costs; higher teacher salaries; new FTE positions for the legions of IT specialists needed to support all the technologies; constant capital expense for IT and lassroom technology; new FTE positions for expanded college counseling and educational counseling; new FTE positions for the environmental or diversity or international programs coordinator; higher insurance premiums due to more litigation against schools; higher energy costs (costs a lot to fill up the as tank on the school bus and heat and cool those big buildings); fancy new facilities. That's where the tuition money goes. Crazy rising costs in aggregate but any given piece seems very defensible.[/quote] The average It salary is about 40K a year. maybe the head IT guy gets 200K/year, so the whole department costs the school maybe 500K a year. OK, say its a million. Now where did the remaining 39 million dollars in annual revenue go ? teachers salaries ? I don't think so. Even if health care costs have tripled, that still does not get you to 40 million in expenses a year ?[/quote] 1. You seem to be focusing on just one item out of a long list of accurate items -- and even at that, remember to multiply every FTE salary figure by about 20 to cover payroll taxes and benefits. 2. If you look at a typical private school budget, something like 65-70% of costs are related to personnel. Health care premiums is a big piece of that; moreover, talk to private school teachers who've been around for 20 years or more and they will generally be able to identify a time period where they got big pay raises (in part bc the pay was so very low). 3. Your 40 million revenue per year figure is crazy. [b]A private school with 500 kids at 35k is $17.5 in tuition revenue BEFORE financial aid,[/b] so let's say $15 million. The best day school annual giving campaigns might raise $2 million per year, so that's high end. A very good endowment for this area is $40 million -- a prudent 4-5% draw gives you $1.6 - 2 million more. So you're talking about $18.5 to $20 million in yearly revenue, max. Capital campaigns by definition are raising for a specified capital expense like a building. Even if the capital campaign raises money for endowment, $10 million (NOT easy by any means for a day school to raise) still only gets you an additional $500,000 yearly income with a 5% draw. On the expense side, assume at least 100 full time employees (teachers, IT, admin, front office, buildings and grounds, some coaches, nurse, counselor, college counselor, learning specialist, librarians) for a school of that size. The economics get a little better at 1000 students, but schools are not great places for economies of scale -- small class sizes mean lots of teachers. One area independent with an enrollment of about 1000 has at least 225 full-time faculty/staff. [/quote] Wrong, check the enrollment of these schools, its more like 900 + students( nearly double what you quote), and tuition is nearly 40K, not 35K ( you keep down playing that) Why are you on this thread when you obviously are not in the know. The teachers, most without certification, are paid far less than in DCPS, and many classes are co-taught with a junior teacher who is paid very little. The parents at most of these schools have to pay for their kids lunch, which is catered in or comes packed from home for christ sake. The maitenance is out sourced to the lowest bidder. Look around, in just about every corner of our economy there is over billing , waste and deregulation allowing people to line their own pockets. This insistance that you have that Private schools are somehow immune to that trend, is ridiculously naiive.[/quote]
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