The private school pinch

Note to parents who?ve always thought of private schools as a closed, clubby bastion of the silver-spoon set: There may never be a better time to storm the castle walls. From coast to coast, many of the nation?s 27,000 independent primary and secondary schools are scrambling to fill spots left by recession-struck families.

To ease the admissions process, some are waiving fees and extending deadlines. Others are even lowering the bar, taking kids with lower test scores. With the economy still roiling, many schools are working to fend off further departures by freezing or discounting tuition.

And while you won?t hear them announcing it over the intercom anytime soon, they?re also more willing to negotiate ? in some cases, allowing cash-strapped parents to literally barter services in exchange for a tuition break.

How can schools afford these moves? Most say they?re working to fill tuition shortfalls, not to mention their shrinking endowment coffers, by clamping down on administrative costs, postponing construction projects and throwing more fund-raisers.

And to be sure, not all schools are having to dig too deeply into their waiting lists to reel in replacement revenue. ?It is still extremely difficult to be admitted to choice programs,? says Steven Roy Goodman, a Washington, D.C.-based educational consultant. Indeed, private-school officials say they can?t gauge what toll the recession has taken, since enrollment figures for September usually don?t shake out until early summer.

But many are seeing worrisome signs, such as lower attendance at open houses and smaller numbers of actual applicants. And that?s on top of a demographic dip in school-age children in many areas of the country. So it?s no wonder this $25 billion industry is bracing for a downward jolt: The National Association of Independent Schools recently warned its members to create not only a financial ?contingency? plan but also a ?disaster scenario? plan ? the latter if income plummets by more than 20 percent.

All of which, ironically, spells more opportunity for education-conscious families: ?This is the best time for the consumer,? says Dennis Guilliams, head of the Chesterfield Day School in St. Louis, Mo. Gayle White won?t argue. Last fall, when she saw that her daughter was not getting what she needed at her big, impersonal high school, the Springfield, Mass., CPA set her sights on transferring her to a highly regarded boarding school nearby. Not that she was holding her breath. For one thing, it was already November, well into the academic year. For another, the MacDuffie School wasn?t exactly an easy ?in.?

The exclusive, 119-year-old college-preparatory school, with its small classes, international mix of students and bucolic New England campus, hadn?t had a single open spot in its 10th-grade class in three years. But MacDuffie?s enrollment had slid more than 10 percent from its peak of 235 just a year before. And to the Whites? surprise, within about a week of applying, their daughter Taylor was accepted. One factor that helped her nab the coveted spot?

Another family had recently withdrawn ? ?for financial reasons,? says Kathryn Gibson, MacDuffie?s head of school. For middle-class parents traditionally scared off at the schoolhouse door by nosebleed tuition costs, the new welcome-mat moves can be a little jarring.

After all, in recent decades, getting your kid access to those smaller classes, more rigorous academics and country club-like campuses usually meant enduring some serious sticker shock ? and hefty annual bumps. Sending a child to board at Phillips Exeter Academy, with its more than 450 courses and Washington, D.C., internship program, will set you back close to $38,000 this year ? up 67 percent from a decade earlier. Even the mid-priced privates have seen swelling fees.

At the Charles Wright Academy, a day school in Tacoma, Wash., tuition this fall will run, on average, $18,065 per year, 76 percent higher than a decade ago. According to Pat Bassett, president of the independent schools association, private-school tuition has outpaced inflation by an average of three points every year for the past 25 years.

Of course, having the privilege of complaining about tuition assumes that your child has gotten past private school?s ultimate velvet rope: the waiting list. According to the association, over the past five years, only about 35 percent of applicants actually enroll. In the most competitive schools in hot markets like New York, Washington and Los Angeles, the ratio of applicants to open seats is generally more like 10 to 1, says consultant Goodman.

But look around the country these days and you?ll see that admissions math is in flux. In St. Louis, Chesterfield?s Guilliams says the ?perfect storm? of demographics and the economy has many private schools in his area looking at ?survivability.? His school has lost 25 percent of its student body since 2002, and around the city, he says, ?there are a lot of empty seats.? In Hawaii, an independent-school mecca where nearly 20 percent of students traditionally take the private route, enrollment has receded for the first time in 10 years.

And in places like Greenwich, Conn., and Rockville, Md., public-school districts are reporting a sudden uptick in students transferring in from the privates.

This isn?t news to Andrew Goldberger, CEO of Smart Tuition, which oversees billing for some 200,000 families at more than 2,000 U.S. private schools. He reports seeing it all: falling enrollment, midyear withdrawals (at double the rate of a year ago), plus bounced checks and late payments (at a 20-year high). ?I wish I could say the worst is behind us,? says Goldberger. Of course, you won?t find many private-school parents complaining.

The relief in Karla Caban Yamamoto?s voice is palpable when she describes how the tiny St. Francis School in Honolulu just announced a freeze of the $7,300 tuition she pays. The impact, says the small-business owner, is huge: It allows her 12-year-old daughter to stay at a school ?that challenges her.?

And it keeps her husband from having to add extra hours ? at his second job ? to help cover not just the tuition but also essentials like textbooks and uniforms. Recession specials have also been cropping up at schools around the country, with tuition discounts reported as high as 20 percent.

(Springfield?s MacDuffie School, for one, recently rolled back sixth-grade tuition by a hefty $4,000.) And even if they aren?t trumpeting official discounts, most schools are tap dancing as fast as they can to help retain financially strapped families. Lost a job? Some schools are instituting a sliding-scale tuition based on family income, while others are offering flexible, interest-free payment plans. Did grandma?s help-with-tuition funds evaporate in the market meltdown?

That?s OK; some places now take IOUs. For the first time in at least 42 years, Saint Patrick High School in Chicago has begun accepting promissory notes so children could begin a new school year ? even if their parents still owe from the last one.

Currently, 17 families have taken it up on the deal. And while you won?t see ?bartering? listed in any of its official financial-aid literature, the Westover School in Middlebury, Conn., has allowed a couple of folks to do just that.

According to the school?s head, Ann Pollina, several parents at the all-girls college prep have traded their professional services ? as technology and business-efficiency consultants ? for a little tuition relief. Naturally, it?s not exactly a precedent the school wants set too publicly. (The services, Pollina points out, were accepted specifically because they helped the school trim administrative costs.) How much got knocked off those families? tuition bills?

That, she says, is an ?individual conversation.? In the past, of course, it?s been the parents who have had to go to great lengths to get their children into the more elite schools. But since the economy went south, the game has changed; now it?s the schools that are having to hustle ? and maybe even lower their standards. Instead of waiting for the applications to roll in, more are forced to actively beat the bushes, consultants say, to fill spots that have opened midyear. Even in the most competitive markets, there?s talk of more ?brokering? going on.

That?s where primary-school principals are reaching out to preschool directors to see how interested parents are in sending their kids to a particular private school, says Emily Glickman, president of the New York-based Abacus Guide Educational Consulting. Some schools are easing the admissions process by waiving application fees, accepting submissions after the published deadline or notching down test-score requirements.

The Kadima Hebrew Academy, in West Hills, Calif., has taken an even bigger step: eliminating one of its academic hurdles altogether. When next year?s prospective students apply, they will no longer need to take the Independent School Entrance Exam. ?It?s just one more fee,? says Michelle Starkman, co-director of admissions. ?There?s a cost associated with standardized tests.?

Of course, in this market, a family?s ability to pay in cash may trump the academic requirements altogether. Indeed, while many schools offer financial aid, Claire Law, a certified educational planner from Charleston, S.C., says ?the full-paying student has the upper hand.? Not all private schools expect the sky to fall this year. Officials at some of the most selective institutions say applications have actually risen as funding has dropped for nearby public schools.

?Budget cuts inspired many families to consider (us) who might not otherwise,? says Jane Fried, dean of admission at Phillips Academy in Andover, Mass. While many schools are expected to pad their waiting lists this year ? hedging their bets in case fewer families can commit by the time tuition deposits come due ? some are more sanguine. Elite schools say they?re more insulated from sharp economic downturns because they attract an international mix of students.

?Our market is just that much bigger,? says Jim Hamilton, admissions director at St. George?s School, a coed boarding school in Newport, R.I.

And even if demand does fall slightly at some of the country?s top schools, one veteran admissions consultant says that still means about seven (instead of 10) applicants will be competing for the same spot. Sam Jones, for one, has welcomed the new odds. The chief executive of a new-media company submitted five applications this winter to try to get his 4-year-old son into a private day school in Santa Monica, Calif.

And where other parents faced financial challenges, he saw ?opportunities.? He was encouraged by rumors (whispered by other parents and school officials) that demand had softened as more families relocated for better job prospects or considered transferring into public schools. Indeed, a number of his top choices recently got back to him with good news: His son, Samuel, had been accepted. Now, he says, comes the hefty deposit.

Copyright The New York Times Syndicate