How DOES He'atid Do It?

I think it’s a fair question to ask.  How can they sustain an all-in price of 40% less than the least expensive traditional day school in the area?  It gets asked on this blog a lot but often in such an attacking way that He’atid suppporters react angrily and the entire conversation devolves into a shouting match.  But it’s important to ask so other schools can try to emulate their model and we can have more low cost options.

He’atid claims it will reduce costs by: 

1.       Using blended learning to reduce the necessary teacher:student ratio

2.       Reducing administrative overhead

3.       Eliminating “Baked-In” scholarships in the tuition.  (Lower costs would result in less scholarship demand and remaining scholarship requirements would come from separate funds)

 My sources at Yavneh tell me that at a recent Q&A with the administration they were able to get the following information about how their tuition dollars were being spent.  I’m trying to square the He’atid claims of cost savings with Yavneh’s breakdown to see if the savings really add up.  I came up with the following:

1.       Yavneh spends about 80% of its budget on payroll and about 80% of that is on faculty.  So this is the majority of the spending & where cuts need to happen.  But at a recent He’atid meeting with Kindergarten parents they said that the class would have 20 kids with one teacher & one assistant.  If some parents double-registered & don’t send their kids to He’atid the ratio would be even lower.  So that’s a cost savings over Yavneh which has 2 teachers & an assistant in kindergarten.  But in the older grades most of the classes in Yavneh have only one teacher with a floating assistant teacher which He’atid plans on having as well.  So there are some savings to be had there but not a tremendous amount.

  

2.       Yavneh said 16% of its payroll expenses or 13% of its overall budget are for administration.  So cutting off a third of that saves about [CORRECTION:] 4.5% of the overall costs of running the school

3.       Scholarships.  Yavneh says it has a budget of $9.5m & 20% of the 695 students are on scholarship.   (Average 7K per scholarship student) On a typical year the scholarship totals about one million dollars.  The past 2 years with unemployment high its gone up to about $1.1m.  About $350K is raised in scholarship donations which means that about $1,000 of our tuition dollars funds scholarships.  This year with donations a little lower, enrollment a little down and scholarship needs still high it may go as high as $1500 per student.  (those who think that scholarship funds are fully funded from donors are wrong in Yavneh and every other Day School in the tri-state area)

Bear in mind that He’atid also has a rent expense and Yavneh’s building is paid off.  Building fund covers major capital improvements only.  Also He’atid will have tremendous technology expenses, both equipment and staff, to handle all the computers in every classroom.

All in all I can see He’atid cutting costs by 20%, but 40%?  Perhaps He’atid can give a detailed explanation of how they can do that.  Maybe I’m missing something.

Perhaps tuition will rise in the future.  If so, maybe that is all the more reason to enroll for this coming year.  If it’s a limited time offer I don’t want to miss out!