Anonymous wrote:I have a quick question.

Normally if there are monopolistic practices that are detrimental to consumers you could file a claim at the federal trade commission or the office of consumer protection in dc. Is there anything similar for schools, or in essence they are free to charge anything they want. This is genuine question. Thank you.

This is subject to a higher law -- supply and demand. Don't like the price, don't pay it. If enough don't like the price, it will reduce to meet demand.

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Anonymous wrote:But the question is if all the tuition increase is justified or not. There seem to be unlimited demand for the current price, but still are the higher prices associated with better quality, or it’s just profits that are absorbed by admin staff. (For instance by expanding admin staff).

But that’s a different question.

You have to understand that monopoly cases relate to market concentration (does an entity have an unreasonable share of the market such that it can charge monopoly prices) or price fixing (collusion to fix prices across entities). The other people saying that it’s a private school so they can do whatever they want are wrong, but making a case that there is excessively concentrated market power with a given school or collusion to set prices would be next to impossible.

Agree with you. No monopoliy. The question is if the school is transparent enough about the pricing structure such that consumers can have an informed opinion if thee is fraud or waste and can move if the increase in tuition is not justified.

Many private schools’ tuition actually do not cover the full cost of attendance and are subsidized by endowments/fundraising. Most schools will share what their average cost to serve is, mine did. I make sure to exceed that amount when I donate.

The biggest expenses for schools are salary/benefits and operating costs. If you want the best teachers and administrators while keeping the students to faculty ratio low, you have to hire more qualified teachers and pay them competitively. You also have to keep pace with the market and continually adjust their pay to account for inflation and other factors. Operating expenses including debt/interest payments, insurance, utilities, grounds & facilities maintenance, and capital projects consistently increases. Can you predict exactly how all these factors will increase every year? Did you get a raise last year? Did your home and car insurance increase? Mine did.

Privates also don’t have the scale of public systems to spread many of the fixed expenses. For example, how much are the superintendents of APS, FCPS, and MCPS paid? If you want the best person to lead your school, you have to target someone with a superintendent’s skills and pay for it. Unfortunately, those costs can only be spread across 800-1,200 students instead of

Most of these expenses are disclosed if you know where to look. Finally, if you distrust your school because they won’t share this information freely, you should switch to public. I’m sure you’ll get all the transparency and good governance you desire.

When I compare dc to other countries, I realize that the issue with private education is the same with private healthcare. You get poor value for money.

I other developed counties like Canada or Germany you can find high quality health and education. And private education is mostly related to religious schools. So again, I think there is lack of competition in the education market.

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Anonymous wrote:It’s a private school. They can charge whatever they want. Only the people who can’t afford it are complaining about the cost.

Not complaining at all. The US legal system allows consumers to contest abusive practices by corporations. Nothing outrageous about that. Just curious if there was something similar in DC. In Arizona has being proposed. Nothing crazy.

The US legal system does NOT allow consumers to successfully contest private school tuition costs. Private school is not a right. If you can’t afford it or don’t want to pay…then don’t. Your children will receive a taxpayer funded public education like the rest of the masses.

Wait a second. But paying for private school is not like buying underwear that you can easily switch brands. It’s like having an operation with a doctor, then because you realize that operation is expensive you have part of the operation and then switch to another doctor. Doesn’t work like that. If you study for 12 years in place it is reasonable that tuition increase won’t be outrageous. Let’s say 20 percent per year.

No, paying private school tuition is not like having an operation with a doctor, and then being forced to switch doctors due to cost. The moment you decide you can’t afford the tuition, you can switch to public school. Your public school may be an inferior educational option, but it is not life threatening.

Sure. Fortunately I can pay for private school and I can envision some personal situations under which I could be forced to switch to public and that fine.

You are under the assumption that the corporate governance of some schools are perfedtly well, there is no waste and fraud, and just the market will be a self correcting mechanism. Again I believe for instance that in a market like dc if public schools were significantly better, private schools would have more incentives to be more efiucuemt and try to compete with customers providing value for money.

Now Demand for private is very high and there is limited completion, so you have to accept the conditions they impose.

Yes if you don’t like it you can go somewhere else. I am sympathetic to the Arizona regulation imposing caps in price increases. Somehow the state ncentives to be cost effective should be coming from somewhere and I don’t see that coming from
Anywhere.

DP. Of course waste exists. There is no perfectly oiled machinery when it comes to practice in reality, but market pressures for a private entity do limit waste in general.

I too have always wondered why no one has made use of the gap in fanciness between private and public schools, whether it be a non-profit or for-profit entity. I am envisioning a more public like campus, public-like counseling and amenities, less individualized support, but with intermediate class sizes and highly qualified, graduate degree wielding teachers (perhaps in partnership with teaching assistants who may not be as experienced or credentialed), and class sizes that are more in the range of 20-25 vs. 35+. Competitive secular newcomers to the private school business exist, but they don't seem to be that much less expensive than the established schools in the same market. This makes me wonder if offering a middling option is just not that appealing to parents, who would then just select public for free, where their kids can also find a high-performing cohort with great college outcomes. After all, if you could afford to spend $20K + per year on private school, you probably can afford to live in or move to a district that has a school with a strong academic cohort. So I actually don't believe the bolded above to be true. Instead I think having good or decent public options actually drives private school prices even higher, as the privates have to distinguish themselves from the free option by offering far nicer facilities and one-on-one attention. In general I have noticed that private schools are less expensive in cities that don't have access to decent public schools. I know that parents are always bemoaning the state of public schools in DC, but check out other cities for an honest comparison of the state of public schools.

Anonymous wrote:

Anonymous wrote:I read recently that there was a a proposal in Arizona to cap the tuition increases:

https://www.future-ed.org/legislative-tracker-2025-state-private-school-choice-bills/?utm_source=chatgpt.com

The reason I am saying this is that in my case tuition expenses have increased by 30 percent in 2 years. I understand a rate of 5 percent per year but I am experiencing higher rates. That’s all.

I understand the concept of free market. For instance doesn’t make sense to put a cap on bmws so everyone can afford a bmw. But at the same time, we are purchasing a service over 12 years, and I would expect a more stable rate increase over time.

Expenses for the school are above 5% a year, so how do you propose they fund these increases without raising tuition?

You can check in propublica the actual numbers, the data indicates that costs raises on average between 4 and 5 percent. No more than that.

I think the issue is that if you want the perfect education any raise in tuition would always be justified: better teachers, better facilities, smaller classroom sizes. The issues is how to balance excellence in education with good value for money. That last part is lacking from what I have seen, and hence I see the increase in tuition in excess of 5 percent unjustified.

Anonymous wrote:

Anonymous wrote:I read recently that there was a a proposal in Arizona to cap the tuition increases:

https://www.future-ed.org/legislative-tracker-2025-state-private-school-choice-bills/?utm_source=chatgpt.com

The reason I am saying this is that in my case tuition expenses have increased by 30 percent in 2 years. I understand a rate of 5 percent per year but I am experiencing higher rates. That’s all.

I understand the concept of free market. For instance doesn’t make sense to put a cap on bmws so everyone can afford a bmw. But at the same time, we are purchasing a service over 12 years, and I would expect a more stable rate increase over time.

Expenses for the school are above 5% a year, so how do you propose they fund these increases without raising tuition?

I am ok with the 5 percent per year. But once in a while they start to deviate and jack up the prices by 10 or 15 percent. That has happened in many elite schools. A number that is way above inflation.

Anonymous wrote:I read recently that there was a a proposal in Arizona to cap the tuition increases:

https://www.future-ed.org/legislative-tracker-2025-state-private-school-choice-bills/?utm_source=chatgpt.com

The reason I am saying this is that in my case tuition expenses have increased by 30 percent in 2 years. I understand a rate of 5 percent per year but I am experiencing higher rates. That’s all.

I understand the concept of free market. For instance doesn’t make sense to put a cap on bmws so everyone can afford a bmw. But at the same time, we are purchasing a service over 12 years, and I would expect a more stable rate increase over time.

Expenses for the school are above 5% a year, so how do you propose they fund these increases without raising tuition?

I think the society imposes regulations on a lot of prices increases in the economy like the minimum wage or allow the introduction of generics to compete with traditional medicine brands. So for private school I don’t find normal to also consider regulations to avoid abuses in pricing power. Or even better. Imporcoe public schools and private schools would lower prices or go out of business.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s a private school. They can charge whatever they want. Only the people who can’t afford it are complaining about the cost.

Not complaining at all. The US legal system allows consumers to contest abusive practices by corporations. Nothing outrageous about that. Just curious if there was something similar in DC. In Arizona has being proposed. Nothing crazy.

The US legal system does NOT allow consumers to successfully contest private school tuition costs. Private school is not a right. If you can’t afford it or don’t want to pay…then don’t. Your children will receive a taxpayer funded public education like the rest of the masses.

Wait a second. But paying for private school is not like buying underwear that you can easily switch brands. It’s like having an operation with a doctor, then because you realize that operation is expensive you have part of the operation and then switch to another doctor. Doesn’t work like that. If you study for 12 years in place it is reasonable that tuition increase won’t be outrageous. Let’s say 20 percent per year.

No, paying private school tuition is not like having an operation with a doctor, and then being forced to switch doctors due to cost. The moment you decide you can’t afford the tuition, you can switch to public school. Your public school may be an inferior educational option, but it is not life threatening.

Sure. Fortunately I can pay for private school and I can envision some personal situations under which I could be forced to switch to public and that fine.

You are under the assumption that the corporate governance of some schools are perfedtly well, there is no waste and fraud, and just the market will be a self correcting mechanism. Again I believe for instance that in a market like dc if public schools were significantly better, private schools would have more incentives to be more efiucuemt and try to compete with customers providing value for money.

Now Demand for private is very high and there is limited completion, so you have to accept the conditions they impose.

Yes if you don’t like it you can go somewhere else. I am sympathetic to the Arizona regulation imposing caps in price increases. Somehow the state ncentives to be cost effective should be coming from somewhere and I don’t see that coming from
Anywhere.

Anonymous wrote:^^ To add to this, it is extremely expensive to operate a school, which is why a lot of them still depend on donations on top of already high tuition. Why can't tuition be lower? My guess is that at a certain point that parents would consider "affordable," the product is no better, or perhaps even worse than the public option which wouldn't cost parents anything.

+1. Absolutely! It costs a lot of money to limit class sizes to roughly a dozen kids instead cramming 35 kids into a class. And the very fact that fundraising is essential just staying afloat proves that tuition is not high enough.

^^ To add to this, it is extremely expensive to operate a school, which is why a lot of them still depend on donations on top of already high tuition. Why can't tuition be lower? My guess is that at a certain point that parents would consider "affordable," the product is no better, or perhaps even worse than the public option which wouldn't cost parents anything.

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Anonymous wrote:But why is the case tuition is very similar across private schools in dc. Same average cost. Not sure.

Have you ever noticed that Mercedes BMW and Lexus all have cars in a very similar price range.? Why is it that Honda Toyota and Nissan are all in the same price category? Is this legal?

When you buy a Mercedes you don’t pay over 12 years and at the third year the price starts rising like crazy. Again. Private education is not like buying blue jeans.

On the contrary, what your jeans and your Mercedes and your private school have in common is they are all subject to the free market, and they are also subject to the very real cost of providing that product. In the case of a school, they all have to pay approximately the same salary to each of their teachers that a competing school will have to pay. There is a cost per square foot for real estate that is fairly consistent. And when school A wants to raise their tuition to 58k to cover their expenses, but they notice that school B is getting the job done for 54k, school A just might think twice and go to 56k which appears really close to the tuition from the other school. This is all free market stuff.

Yes. They are in the free market except that they don’t pay taxes like any normal corporation and they could pass those savings to the parents via lower tuition. Am I missing something?

Corporations generate profits for their shareholders. If schools are run like for-profit companies, then their goal would be to maximize profit for shareholders. Instead, private schools are non-profit. Part of the income they receive goes to the salaries to employees, but the rest can go into savings or other expenses of running and maintaining the school instead of into the pockets of investors. This means that the school doesn't have to operate with profit in mind, though obviously it is better for their survival if they do not go into debt. They do need to maintain enough of their endowment to maintain longevity. They can't just give it all away in the form of low tuition and survive, especially when parents expect nice facilities, activities, resources, etc. There are such things as private for-profit schools if you are interested, but for various reasons you can look into yourself, these are generally not considered as good an educational model as non-profit schools. If you want this route, BASIS McLean is such a school.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But why is the case tuition is very similar across private schools in dc. Same average cost. Not sure.

Have you ever noticed that Mercedes BMW and Lexus all have cars in a very similar price range.? Why is it that Honda Toyota and Nissan are all in the same price category? Is this legal?

When you buy a Mercedes you don’t pay over 12 years and at the third year the price starts rising like crazy. Again. Private education is not like buying blue jeans.

On the contrary, what your jeans and your Mercedes and your private school have in common is they are all subject to the free market, and they are also subject to the very real cost of providing that product. In the case of a school, they all have to pay approximately the same salary to each of their teachers that a competing school will have to pay. There is a cost per square foot for real estate that is fairly consistent. And when school A wants to raise their tuition to 58k to cover their expenses, but they notice that school B is getting the job done for 54k, school A just might think twice and go to 56k which appears really close to the tuition from the other school. This is all free market stuff.

Yes. They are in the free market except that they don’t pay taxes like any normal corporation and they could pass those savings to the parents via lower tuition. Am I missing something?

No, you’re missing everything. I’m sorry I couldn’t resist but yes, your calculations are misguided. There are not massive profits to pass back to the parents. There are hopefully annual surpluses, but those are kept in reserves because being a not for profit does not mean they shouldn’t run a surplus. They have a fiduciary responsibility to be financially stable. The 990 financial reports are available on Pro Publica for any non-religious private school. And by the way, normal for-profit corporations often pay little to no taxes.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s a private school. They can charge whatever they want. Only the people who can’t afford it are complaining about the cost.

Not complaining at all. The US legal system allows consumers to contest abusive practices by corporations. Nothing outrageous about that. Just curious if there was something similar in DC. In Arizona has being proposed. Nothing crazy.

The US legal system does NOT allow consumers to successfully contest private school tuition costs. Private school is not a right. If you can’t afford it or don’t want to pay…then don’t. Your children will receive a taxpayer funded public education like the rest of the masses.

Wait a second. But paying for private school is not like buying underwear that you can easily switch brands. It’s like having an operation with a doctor, then because you realize that operation is expensive you have part of the operation and then switch to another doctor. Doesn’t work like that. If you study for 12 years in place it is reasonable that tuition increase won’t be outrageous. Let’s say 20 percent per year.

No, paying private school tuition is not like having an operation with a doctor, and then being forced to switch doctors due to cost. The moment you decide you can’t afford the tuition, you can switch to public school. Your public school may be an inferior educational option, but it is not life threatening.