13 May 2017

"Includes hot lunch"

From the "Tuition and Financial Aid" page for Sidwell Friends school in Washington, D.C.:

Middle and Upper Schools $40,840 (includes hot lunch) 

Per year...

Addendum:   After I originally posted this (brief) item, several readers have commented with queries about why this matter caught my eye, so I thought I'd elaborate a little more with an addendum.  The topic came up because of a news story about the young Trump's school tuition (the data I pulled for the above was for the school that Obama's children attended).  And the "includes hot lunch" clarification struck me as a curious item to specify - sort of like "buy this Maserati and get a free tank of gas."

But the general topic of the enormous cost of private education has been on my mind intermittently for quite a while.  Several years ago I helped several classmates as we planned our 50th high school reunion (yes, I'm that old...).  Fiftieth reunions are memoryfests for returning students, but for the schools they are major foci for fundraising.  As we prepared our reunion program, I was gobsmacked to see the current tuition, and I took the opportunity to pull some historic data from the school, then graphed it against the Consumer Price Index.  The results were startling:


I attended this school in the suburbs of Minneapolis in the 1960s, when the tuition was a bit under $1,000 per year, which was a stress for my parents, but one they considered appropriate and necessary.  When I prepared the graph, the most recent data were from 2012: $22,850 for sixth form (senior year) - a 24-fold increase from my tuition.  A quick Google today shows the 2016 data (one more box to the right) to be $25K for kindergarten and $30,000 for senior year [and I note with some bemusement that the webpage specifies "includes lunch" !!]

The school is of course way different nowadays from the school I knew.  In those days it was a "college preparatory (day)school," with a focus on rigorous academic training.   I think my class of 54 students had probably 12-15 National Merit finalists, and 800 scores on college boards were not unusual. But the only student of color was the foreign exchange student, and there were no girls.

Now it's different - the student body reflects "Diversity of race, ethnicity, national origin, geography, religion, gender, affectional or sexual orientation, age, physical ability, and marital, parental or economic status..."  The mission: "Students are expected to participate in an integrated program of academic, artistic and athletic activities in preparation for college, lifelong learning, community service and lives as responsible world citizens."

The current crop of students are preparing to enter a world different from the one I grew up in in the 1970s., so I don't expect their curriculum to include three years of Latin.  But what still strikes me is that tuition graph.  Financial assistance is offered in order to attract the proper mix of students.

But I can't understand why the graph departs so exponentially from the consumer price index.

16 comments:

  1. I'm not quite sure what you're getting at with this post. This is actually not particularly expensive for a prep school -- pretty much in line with the average. I mean, I get that people are like, "Wow, you even get hot lunch for that cost!" but it is the going rate. Boarding adds another $15K or so. (Of course, some people get financial aid to reduce out of pocket a bit, but, yeah, it's crazy expensive.)

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  2. The average is $10,000 for prep schools.
    https://www.privateschoolreview.com/tuition-stats/private-school-cost-by-state

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  3. Actually, I think you'll find that's just "private schools" which includes lower-tier parochial schools. Prep schools have much higher fees (granted, there is a lot of financial aid available, especially if you're a jock.) http://www.marketwatch.com/story/americas-top-prep-schools-cost-1-million-per-family-2014-08-13 My daughter's school will cost $57,120 this year plus books and other fees. (Non-boarding day students, grades 9-12 and postgraduate: $39,900.) College probably won't be much more, and may be less!

    It's a hell of a lot of money (and we've had help from my MIL) but I can honestly say it's been money well spent. Our son went to a PG year (about 10 years ago) because he had dyslexia and his grades and courses weren't likely to get him into college. And he turned an amazing corner in just that one year in terms of ability and confidence.

    So, when our late-in-life daughter seemed to be losing all interest in school (she had the opposite problem and was bored to tears by classes that were too easy) we bit the bullet and offered to send her to the same school. She was willing, especially after her brother told her to grab the chance. And, same thing, small classes, involved teachers, and required extracurricular activities and she blossomed. It's a sacrifice that was worth making.

    For those who think such schools are elitist -- probably true, in a way, but my daughter's K-8 classrooms were pretty much all white, middle class, with the occasional "minority." Her school now is comprised of kids from all over the world, all religions (or no religions), rich and poor alike. (One of her closest friends, who is from a poorer city in our state) confided that before this, she'd never not been to an all-black school. So this prep school is actually more diverse than she'd have had in public school in our Wonder Bread white suburbia.

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  4. My alma mater is currently at $57k/yr. Nearly half of the students receive need-based grants, however, and the average grant is over $42k. Basically, if you can get in academically they will make it affordable or free.

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  5. Elagie - see my comments newly appended to the post as an Addendum.

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  6. Thanks. I appreciate the gesture. Sorry about my epic length rant!

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    1. No apologies necessary. I appreciate it when readers take the time to leave lengthy insightful comments. :-)

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  7. So - we're surprised? Why should we be - this is what the country appears to want: Astronomically high prices for some, so others (the chosen classes of religious, race and gender preferences) can have for free. And the vast middle class? Mediocre public schools for the suckers. It's a choice we're making...the merits of which can be debated after a generation or so.

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    1. There's still a choice for those of us in the middle class. By definition of income, my family is smack in the middle of middle class. We have chosen to send our kid to an excellent (total around $20,000 per year) private school. So how do we live?

      We made extreme sacrifices early in our marriage to get out of debt and remain debt free. We quickly paid off student loans (despite very modest incomes) and were able to save for emergencies (which have included a major surgery, car loss, job loss, and 2 moves). While most people in our income range drive fancy cars and go on expensive vacations each year, I drive an 18-year-old vehicle which runs faithfully, though it is ugly as sin. We take an expensive vacation once every 2 or 3 years, depending on the destination. We don't pay for cable or satellite TV, eat out less than average, and have a very modest monthly entertainment budget.

      I don't consider us to be exceptional. We know others making the same choice. If a person believes it is worth the cost to give their child a superior educational experience and they are in the middle class, it is usually possible.

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    2. Roy, you sound like my parents.

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    3. We're hoping that our kids feel the same way that you do about the experience over the long run.

      The good thing is that our oldest (14) will graduate at 17 with quite a few college credits. And, as my wife works at the very good college, he can go there tuition-free. Three more years, and things will get a bit easier.

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  8. One of my alma mater's founding principals (in 1929) was to educate students regardless of means. For many of the students' families, the full tuition is NOT astronomical. $20k tuition wasn't a problem for a lot of them in the '90s and $57k tuition isn't a problem for them today. Those families have, essentially, been funding the tuition of lower- and middle-class students for nearly 90 years.

    In my opinion, the difference in tuition growth vs. CPI is just a reflection of growing income inequality. The amount of money that isn't a big deal to the top-earning families has far outpaced CPI, starting in the late '70s. If you smoothed the top line on this graph (http://cdn.static-economist.com/sites/default/files/imagecache/1872-width/20111029_WOC689.gif) wouldn't it look a lot like the graph you posted?

    All of that aside, "includes hot lunch" is really funny.

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  9. I am also curious about this. I think I have a rough handle on why healthcare so outpaces inflation (we do it inefficiently, we align incentives poorly, we subsidize medical advancements / drugs used by the rest of the world). But I'm not sure why education is shooting up so rapidly.

    I did learn something new looking into this:

    "When President Jimmy Carter moved to the White House in 1977, he and his wife Rosalynn did something rare: They sent nine-year-old Amy to a predominantly black D.C. public school. Amy was the first child of a president to attend a public school since 1906, when one of President Teddy Roosevelt's sons went to a school in the district." [1]

    and

    "The move was symbolic, a commitment the Democrat from Georgia had made even before securing the presidency. In his presidential-nomination acceptance speech the previous year, Carter criticized 'exclusive private schools that allow the children of the political and economic elite to avoid public schools that are considered dangerous or inferior.'" [2]

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    1. If Stan and you were asking about the cost of College, I'd say it was two primary factors: subsidies and greatly increased demand without the need for colleges to compete in terms of price.

      Perhaps demand is part of the reason, but subsidies (especially from the government) are few and far between at most private institutions. Quite puzzling indeed.

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  10. One thing I'm curious about but that's hard to pick out from the graph: what is the *ratio* like? Put another way, what does the CPI-adjusted tuition look like on a graph? If you figure "X% of median income is OK for this to cost", I can't tell how much this is diverging from that.

    Assuming it really is going up a fair bit, my first theory would be "Baumol's cost disease" - school instruction hasn't really had productivity growth (still need the same number of teachers for a classroom) but lots of other things in the economy have.

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    1. Nathan, it's been years since I created the graph, and I didn't keep the raw data (not planning to ever use it again). But IIRC the CPI line is not of the CPI per se. I believe what I did was graph the tuition, then set the CPI line at the same origin, then plotted its increase q4years, so that the purple line would represent what tuition would have been had it increased at the same rate as the overall consumer price index.

      I don't know if a "ratio" is appropriate to consider. At the start the "ratio" is 1:1, then the actual tuition becomes 2X, then 3X, then 4X the hypothetical one.

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