Harry Bloom (hbloom1@yu.edu) is Director of Planning and Performance Improvement at Yeshiva University’s Institute for University-School Partnership. Following a 25 year career in industry and consulting, he now helps Jewish day schools strengthen their governance and finances. He has an MBA from Columbia University and is a doctoral candidate at YU’s Azrieli Graduate School. The following article is abridged from a larger study, available at www.yu.edu/schoolpartnership. To read the accompanying article, “Does Better Governance Correlate with Better Day Schools”, go here.

Yeshiva University’s Institute for University‐School Partnership believes that informed action can make a huge difference in tackling the affordability crisis. The following FAQ is an abridged version of an article available at www.yu.edu/schoolpartnership. Asterisks (*) indicate areas in which YU has initiatives designed to address the issue.

1) What does it actually cost to educate a Jewish day school student?

• Operating costs nationally range from $7,500 to $35,000 per student.
• Average operating cost per student in elementary schools and schools with elementary through middle school grades is $15,600, and in schools with middle and high school grades and high school grades alone it is $16,900.

2) What are the key components of day school budgets?

Personnel costs (most of which are related to educational services) account for 80%. Purchased services account for 15%. Purchased goods make up the remaining 5%.

3) What causes schools to differ so markedly in their operating costs per student?

There are many factors driving cost differences among schools but three of the most important are capacity utilization, student-faculty ratios, and compensation levels.

Capacity Utilization

• The majority of day school costs are fixed in nature. Thus, they do not vary much within a reasonable range of student enrollment. Schools that have excess capacity in (a) facilities, (b) administrative staff, and/or (c) teacher capacity, cost more than they need to.

Case Example: a regional high school with the capacity for 150 students currently has 100 students. The current operating cost per student of $18,000 would be closer to $12,000 at full enrollment.

Case example: two small high schools in the same region have significantly differing operating costs per student. One has its own campus. The second school shares space with a K‐8 school, thereby saving over $1,500 per student on facility‐related expenses relative to the first school.

• Potential Investment in Teacher Capacity: an elementary school that maintains a maximum class size of 21, could aggressively recruit more students if there is capacity, or could increase the maximum class size to 23 (still within the range for good outcomes according to research on class size) while investing in the professional development of the teacher to increase teacher capacity by advancing his/her ability to differentiate instruction*.

Student-faculty

• One major reason Jewish day school expenses have outpaced inflation is the decreasing student-faculty ratios due, in part, to an increased the number of specialists.
• It is more financially efficient to train existing staff to take on added responsibilities than to hire new specialists. In one sample, seven day schools combined had an average student-faculty ratio of 6.5:1, as compared to an independent school average ratio of 9:1.

Case example: A day school with 1000 students recently identified a $1 million (15%) savings potential through increasing its student to faculty ratio from 7.2:1 to 9:1. This school is in the process of developing strategies to achieve this ratio through a combination of intensified student recruitment to fill classes and re-evaluating the number of specialists within the school.

• It is worthwhile to consider administrator to faculty and administrator to student ratios and related expense ratios as well. Future research will focus on these areas.

Compensation levels

• Faculty compensation can vary within a region by as much as 2:1, depending on hiring experience standards, benefits, and strategies. However, caution is necessary in making comparisons because qualified teachers will often accept lower base salaries to take advantage of total compensation packages that include generous tuition remission policies.
• Quality teachers are clearly worth investing in and are not overpaid by any objective standard. Indeed, efficient schools partner with staff members to expand their roles in the school.

4) What else can be done to significantly improve the affordability of day schools?

• Increase economies of scale through joint purchasing of goods and services with other schools and institutions, including insurance, books, heating oil, transportation services, security, etc. 20% of a school’s expense reduced by 15% can yield 3% savings annually. This estimate is less than what other industries have achieved by similar means.*
• Communal fundraising, including planned giving.
• Promote and advocate changing the funding model from only day school parents to one of 100% communal participation in day school fundraising appeals.
• Promote Planned Giving to appeal to new donors via “products” that take advantage of IRS approved tax savings and can build endowment income (e.g., bequests and paid up life insurance policies, real property donations, etc.) to support scholarships and/or reduce tuition.*
• Communal advocacy with legislators for increased government support for general studies. Some communities and schools already benefit from government support for books, transportation and special needs teachers, as well as other services.