Best Business Practices

Let’s discuss best business practices today.

In most situations, the party making payments is the customer, and the party in receipt of payment is the business. American businesses are great at giving discounts – there is always a sale going on, there exists such a thing as double coupons in some places, it is win win!

On a larger scale, when it comes to large sums of money, the customer negotiates a price; a contract is drawn up and is signed. The business then receives payment based on the dollar amount in the contract. It is the business who draws up the contract, therefore one has to assume that the business agrees to receive only the amount in the contract from this customer. The business has the right to demand timely payments, and to take action if those payments are not made.

If the customer subsequently finds a way to save even more money – perhaps a manufacturer’s rebate – he pays the business, and is then reimbursed the amount of the rebate. Or in some cases, the rebate voucher is given to the business, which then is reimbursed by the manufacturer – like using coupons at the grocery store. It is the customer who benefits from the savings.

Let’s discuss schools, hypothetically, of course.

A low income family wishes to send their child to a private school. They cannot afford tuition, so they apply through the private school’s system for financial aid. They are awarded a 40% grant on a $15,000 tuition, so they are obligated to pay $9000. After receiving their contract the family hears about a program whose mission statement says that they provide K-12 scholarships to economically disadvantaged families, to give them the freedom to choose the best school for their children. The school tells the family they must apply for this grant, or they will lose their financial assistance that has been allocated.

This family is eligible for the maximum amount awarded by this program – $4000. So now, their personal obligation is only $5000. The family is ecstatic, not only because their child can now go to the school they feel is best for him, but also because they will now pay $500 per month, rather than $900 over a 10 month period. This $400 per month difference allows them to pay off their credit card debt and their student loans faster, and perhaps they can take their kids to a movie or the zoo once in a while.

The school is still getting the $9000 they agreed to for this child. With the lower payment coming from the family there is also a higher chance of it being paid on time. Everyone should be happy.

These programs exist to help low income families, not the institutions. In fact, the definition of low income families, for the purpose of this program, is for a family of 4 people (i.e a 2 parent, 2 child family) to be making less than $3500 per month.

Once a family is approved for a scholarship, a check is made out to the school, not to the parent, which must be endorsed by both the school and the parent.

But the school says “hey wait a minute! You signed a contract saying you would pay us $9000 for the year. We want YOUR $9000, AND we want the $4000 that you have been allocated by this grant program!”

Should schools encourage their families to apply for these scholarships, knowing that only a handful will qualify? Absolutely! Should they make it mandatory for all families applying for financial aid to apply? Yes! Anything that can help should be encouraged.

But if a family has already received a contract for the coming school year, and subsequently discovers that they are eligible for scholarship money through an external program, does the school have the right to ask for this money in addition to the amount stipulated in the contract? Or should that money help alleviate the burden from a family already stretched?

Legally, there is little doubt that they can ask for the money in whichever way they want. Morally, however, especially in a faith-based school, one would hope that those in power would view these scholarships as a way to assist these lowest income families to pay their portion of tuition on time.

If a school is aware of voucher-type programs that will relieve families of some of the burden of tuition, they should advertise them. In fact, I think it is fair to say that the schools should require all families asking for financial assistance to apply to any or all available programs. From an ethical standpoint, if they plan on taking that money in addition to what they think a family can pay, surely they should first find out if the family is eligible for one of these scholarships? Once established how much each family will be allocated, a contract can be drawn up by the school for the amount that the family should be responsible for, in addition to what they will receive from an external scholarship. Have them submit their grant eligibility along with all other relevant income information and “The Questionnaire”. Then the school has all the information that they need before putting together a contract.

Make information about these schemes known at the time of re-enrollment. Make it clear at the time of registration that everyone MUST apply for these grants if they are applying for aid, and that if grants are awarded, tuition contracts will be drawn up for an additional amount.

If a school wants to be treated like a business (rather than a non-profit) then they should act like a business and have good business practices.

I welcome comments to my blog, positive and negative. If you feel the need to post anonymously, go right ahead. Comments are not moderated, but I reserve the right to remove anything that is deliberately hateful.

Shabbat Shalom


6 Comments (+add yours?)

  1. Anonymous
    May 18, 2012 @ 11:06:53

    The fundamental problem is that those making the decisions have never been in a position where $300.00 a month makes any difference (after all, it’s a couple of pairs of sunglasses, right?). I do not know what the solution is, but a more economically diverse review board for tuition assistance couldn’t hurt the situation.


  2. tetisheri (@tetisheri1972)
    May 18, 2012 @ 11:16:49

    The fact that the school still wants the parents to pay $9000 even though the scholarship would pay $5000 of the parents’ share makes the school sound really greedy and very out of touch. That much of a difference in a monthly bill is huge. It sounds like some of the PTB haven’t had to make the kind of decisions an average family does. Getting a good education is good. Beggaring yourself to do it isn’t.


  3. Ari Beim
    May 18, 2012 @ 13:24:51

    Ok, this time I will disagree with you… partially.

    Firstly to correct some information, Yes the grant is “up to” $4k but they are actually paying out closer to $2500 per student. FYI that number may drop if more students qualify as the program is limited in how much TOTAL grants allowed by the state legislature. So the more the economy sinks, the more students qualify, the less they hand out in vouchers. The FCAT scoring story this week should scare people who depend on those vouchers. Currently to qualify a family of 4 must be earning $41k of income, That is why HDS only has aprox. 6-8 kids who are “bringing in” the vouchers. The methodology and logistics of the payments is to prevent fraud – this program is privately run and under tremendous scrutiny by the state.

    Yes the wording of the letter could have been better and in fact the letter should have been directed at the people who they know (based on their FACTS applications) would qualify, which is a very small percentage of the families. Therefore wasting time for 90% of those on tuition assistance who clearly cannot qualify!

    I believe that the tuition, lets use your example of $15k. You negotiated the reduction down to $9k. What happens if you win the lottery, should you not be forced to revert back to full tuition? If let’s say one of the spouses finds employment putting the family back in the “full paying” capability should they not revert the tuition level to full? If it is determined that economically someone can handle X amount and then thru various methods, whether via Step up, VPK, McKay or any other source of financial help – that money should be directed to the school and not for further discounts.

    See, with all due respect, i think you are confusing that the cost to educate a lower income famiy’s child isnt less than it is to educate an ultra wealthy family’s child, let alone those in the middle. The $9k negotiated price is set, but then the school has to turn around and find money to cover the additional expenses. So if some how more money is “found” it should be allocated back into the “pot” – because now that freeing up of resources can possibly help someone else, enabling financial aid to another child – or more likely help relieve the amount needed to be raised in capital campaign.

    The contract was designed and signed based on certain qualifications, being financial information. If those details change “significantly” then the contract can be voided. In both directions! If someone’s financial situation mid year deteriorates significantly HDS will and has “voided” a contract in order to assist these families. That would qualify as morally responsible. Likewise the fact that HDS as the “business” sells a product for $15k (whether it costs that or not) and acts morally by negotiating the price down and trying to allow a Jewish education to those who normally wouldnt be able afford their product. Apply the car dealership example…

    That being said I will recap that I do agree that their communication skills need to be improved and the coordination of this application process can be organized more efficiently and with more sensitivity. Honestly (may shock some people and no I am not a paid actor or having threats made against my family) but I think HDS is doing the best they can (“can” referencing with limitations, and leads to a whole other conversation) and with the right intentions in trying to fight this forest fire, with limited instruments and surrounded by plenty of dry tinder…and a propane distributor down the road – I am just glad I am not a fireman!


    • vanessabrooksceo
      May 18, 2012 @ 17:11:25

      I don’t disagree with your comment for the most part. Again, it’s all about communication and timing.
      I will also say, from personal experience, that the amount on a contract is not necessarily what the family CAN pay – it is what the school decides they SHOULD pay, based on a rather simplified submission of information on income and expenses. The forms submitted take into account mortgage and car payments, but not monthly grocery bills, children’s clothing and other things that are necessities, not luxuries. So often, the contract is not truly reflective of what a family can pay, but what it appears they should be able to pay. That said, had all this been done in a thoughtful manner – i.e first make people apply for the grant, then figure out how much they should get, and then send the contract out, it wouldn’t have had the same negative impact.
      One would hope that a family lucky enough to win the lottery would be thrilled to come forward and pay full tuition, and to donate a substantial amount to the scholarship fund. I know that is what we would do, and what we will do, when the Powerball comes our way. And if employment conditions change during the year, hopefully honesty will prevail, but we know it does not always work that way.


  4. Plony Almony
    May 23, 2012 @ 12:54:56


    I sympathize with your plight to provide your children with an affordable Jewish education. I do not, however, agree with the point that you are making here – that HDS is morally wrong for giving you a contract indicating that you are responsible to pay $9,000 and then expecting you to pay just that despite receiving an external scholarship. The amount of tuition set forth in the contract is based (correctly or not – and I’ll address that in a moment) on your deemed ability to pay that amount in tuition. The tuition being otherwise reduced by an outside scholarship would not, presumably, alter your deemed ability to pay the amount in the contract.

    Does HDS’s communication skills leave a lot to be desired? Absolutely. But you really raised that only as tangential issue….

    I don’t think it is a bad idea for you to petition those on the HDS finance committee to publicize details on the formula they use to determine who gets tuition assistance and in what amount such assistance will be awarded. I can’t imagine they would have any objection to revealing that. You seem concerned that groceries and clothing expenses are not taken into account because you are not asked to disclose those expenses on the scholarship application – I would imagine that there is a general assumption for those expenses taken into account, but if it isn’t, or if the assumed amount is unreasonable, then you have a legitimate concern. Determining how HDS calculates your expected contribution, I think, would go a long way to finding out whether the tuition assistance process is fair. If, once the process is publicized, there are those that feel the process is unfair or otherwise flawed, which it very well might be, there can at least be an open and honest discussion on whether and how it can be revised to be more fair and/or accurate. Of course, insight on how HDS intends to utilize the answers it receives to the questionnaire you posted a few weeks ago is something you ought to request as well.

    By the way, while I do disagree with you that HDS’s desire that you pay the amount in the contract, despite the school receiving an additional $4,000 from outside scholarship, is somehow immoral – I do not disagree that HDS, based on other things you have written on your blog, has in the past and does continue act in ways that one would not expect an institution charged with providing a Jewish education to children to behave. If the true desire of those running HDS was to provide children with a Jewish education as a result of a love and dedication to Judaism, then, of course, they would find a way to provide every Jewish child in the community with just that – without exception. While there are of course, economic realities that HDS has to face, from what I can tell, it is in a position where it would never have to turn anyone away if that was truly the goal.

    If those that pay full tuition and donate funds to the school don’t want those who are less fortunate to be a burden on them, or only want to be responsible for providing assistance to a certain people and/or only to given extent, then they should at least be open and honest about that.

    Frankly, I can afford to pay full yeshiva tuition for all of my children, but I choose not to send my children to yeshiva. I choose not to for several reasons. First, I think that the amount charged for tuition in any Yeshiva in close proximity to where I live is outrageous. Just because I can afford it doesn’t make it reasonable.

    Second, I am tired of looking around and knowing that others receiving tuition assistance and wondering why those people are driving the car they drive, eating out at the restaurant or going on vacation. I don’t want to look at my friends and neighbors in that light – and I don’t care how nice of a person you are, it is human nature to have those feelings – some may suppress those feelings better than others, and I like to think I did my best, but they exist in everyone. I wish I could describe to you how liberating it is, not only to not have to pay yeshiva tuition, but also to not have to resent anyone who is receiving tuition assistance (and I will tell you, having also received tuition assistance at a time before I could afford to pay full tuition, the feeling is even more liberating than arriving at the point where I could afford to pay full tuition and no longer feeling like a “burden” on the community). Having had, while the recipient of tuition assistance, the feelings of inadequacy, being a burden and the guilt of any pleasure I may have had from, for example, the rare visit to a restaurant, and, having also, later on, been a victim of my own resentment towards some who received tuition assistance while I paid full tuition and made donations to scholarship funds – I assure you that both sets of feelings suck in pretty much equal proportion. This is all a symptom of the outrageous, out-of-control and completely unjustified current cost of yeshiva tuition (the rise in cost of which, in many schools, including HDS from what I understand, has outpaced inflation, as well as average salary increases, by leaps and bounds).

    Many yeshivas, including HDS as I understand it, have turned their focus to becoming akin to snobby prep. schools of which the priority is no longer Jewish education, but in bells and whistles such as facilities and extra-curricular programs. Don’t get me wrong, I think that facilities and extra-curricular activities are important, but when they come at a cost so high as to contribute to the exclusion of a segment of the Jewish community, when it comes to yeshivas, I think it defeats the point. If we spent less money on a new building or if instead of buying the latest and greatest name-brand computer equipment, we bought something equally functional but much less expensive, would our children’s education suffer? I submit that it would not in any way.

    Perhaps, when times are better and more people can afford to pay more tuition and donations are up, more money can and should be dedicated to these extras, but, like it or not, as a yeshiva (and especially as a yeshiva in a community where choices are truly limited) the responsibility and priority should be, first and foremost, in providing affordable education to every Jewish child. Sadly, that is not the focus at all. This is another reason why I have generally become disillusioned with the yeshiva system.

    Fortunately, if one really wants to provide their children with a Jewish education outside of the yeshiva world, there are ways to do so. I can’t imagine, Vanessa, that in a place like Boca Raton, that those opportunities don’t exist for you. Best of luck!


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