At one Bay Area Jewish day school, tuition is about to go down.
South Peninsula Hebrew Day School, a K-8 school in Sunnyvale, announced this week it will reduce tuition costs by 14 to 43 percent starting in the 2014-15 school year.
Dubbing the new pricing program “A Thriving Community,” school leaders say the goal is to increase enrollment by offering lower tuition as an inducement.
It’s a Jewish day school version of economies of scale.
“The theory driving this indicates the school is better off at a slight reduction in price and increase in enrollment,” said Allen Selis, SPHDS head of school. “When we ran the numbers, there’s a net uptick, so the bottom line looks better.”
The school currently has 230 students, but if the lower tuition does indeed generate increased enrollment, the figure would rise to about 270, Selis said.
But, he added, the economics take a back seat to increasing access to a Jewish education for more families.
Next fall, annual tuition for kindergarten at SPHDS will drop 30 percent, from $16,950 to $11,800. Grades 1 and 2 will see the most significant drop, 43 percent, from $19,100 to $10,800.
Tuition costs for grades 3 through 5 will go down 33 percent, from $19,100 to $12,800, and tuition for grades 6 through 8 will be reduced 14 percent, from $19,900 to $17,200.
In addition to anticipated revenue from increased enrollment, the school also will ask wealthier families to increase their tax-deductible donations to the school. Moreover, financial aid will now be much harder to come by, Selis said.
“Everyone across the country talks about the middle class squeeze and affordability of Jewish day schools,” Selis said. “We see families with three kids, who are having to make the decision, ‘Will I have to move out of the Bay Area?’ That kind of crunch is really debilitating to the young Jewishly-committed households we want.”
Palo Alto resident Josh Licht considers the tuition change “a total game-changer [that] makes a Jewish education affordable.”
He and his wife have two children, an infant and a 3-year-old, and when the time comes, they intend to give them a Jewish education. The couple attended a Nov. 10 parlor meeting in San Jose organized by SPHDS for prospective school parents. They came away impressed.
“There are large numbers of families who are Jewish or Israeli, but not affiliated,” Licht said. “The school is known for its Hebrew language program, so this opens the door to that group of people. When you chop tuition almost in half, it’s a compelling proposition. Their kids can be with other Jewish kids who share similar values.”
The Licht family, and others with multiple children, could also benefit from another part of the program: a second or third child will receive a 20 percent discount, and there will be a tuition cap of $32,000 per family regardless of how many children the family has enrolled at SPHDS.
Amy Katz, executive director of the Boston-based Partnership for Excellence in Jewish Education, applauds SPHDS for taking what she calls “a bold step, because bold steps are needed. But so are outcomes.”
Katz pointed out a reduction of tuition is not without economic risk.
“There are numbers of schools that have lowered tuition to increase enrollment,” she added. “The data are not in to see if there’s a plan to increase lost revenue. What [SPHDS] needs to think about is how they are going to make up the costs they are reducing.”
She cited the example of the Jewish day schools in the Cleveland area; collectively they cut tuition costs a few years ago. Katz says the plan worked initially, but over time much of the gains were lost due to student attrition.
Selis and the SPHDS board are prepared to take that chance.
Selis described pricing as an inexact science, but said the decision to go forward with the new tuition plan stemmed from “a combination of understanding the resources our families have and the kinds of revenues needed to sustain a quality program.”
He expressed confidence that the more affluent SPHDS families will voluntarily make more donations to the school.
Time will tell if the new tuition plan works, but no matter what, Selis said he is convinced plenty of families fervently want what his school offers.
A Jewish education “is not a luxury,” he said. “It’s a necessity. We have seen people devoting an incredible amount of disposable income to Jewish education. It’s a tremendous act of dedication.”