Thursday, January 7, 2010

How My Sibling And I Are Paying For Yeshiva Even Though We Don't Have Kids

By the time my siblings and I reached college, my parents were completely tapped out financially and were unable to help us pay college tuition. Actually, I take that back, they were able to help out - just not very much. My parents paid a portion of room and board, but nothing else.

In fact, and ironically, us going from yeshiva to college was the best thing that ever happened, financially, for my parents. Their "tuition cost per child" went down about 50%, which was a number far more affordable for them. The main difference? FAFSA is available for college, but not yeshiva. Student loans are available for college, but not for yeshiva. Merit-based scholarships are available for college, but not for yeshiva.

The downside of course is that my siblings and I were saddled by huge student loan debts. Each of us graduated college with approximately $90K in student loan debt, almost all of which is private loans and therefore subject to higher interest rates which starts accruing immediately, and cannot be "locked in." One of my siblings who is in graduate school will likely have an additional $200K+ in student loans by the time graduation arrives.

The point is, that yeshiva tuition has a multi-generational effect. It affects the parents that are paying tuition for many years after their last child has left yeshiva. And, it also affects those who have attended yeshiva by saddling them with debt before they even have children.

The situation today is dramatically different from when I was younger and in yeshiva. Although my grandparents had no disposable income to help my parents pay tuition, many kids I grew up with did have grandparents who chipped in a bit. These grandparents were able to do so because they and their children either didn't attend yeshiva or the cost was far lower and more affordable. Today's grandparents are likely still paying off their own children's yeshiva tuition in the form of home equity loans and credit card debt. Or, perhaps they are being asked to shell out tens of thousands for weddings (this is another difference, many people my parents' generation were married for a few hundred dollars). Even if children wanted to ask their parents to help pay for the grandchildren's yeshiva tuition, many grandparents are just not able to do so. It is yet another factor that makes the current crisis so acute.

13 comments:

Anonymous said...

Year ago, when someone started a Yeshiva, it wasn't a business. Anyone staring a Yeshiva knew that it meant he had to go and find outside funding as tuition that reflected actual cost was out of the question. Most people simply couldn't do it and would just send to public school.
Today it's looked at as a business with each child a customer who is expected to pay the full cost and the heads of the school make a nice living.
It's ironic that every government throughout the world recognizes that many parents cannot afford these vast sums and supplies free schooling, while we Jews are expected to pay full freight.

Orthonomics said...

Massive student loans are a huge problem. People like to think of them as "good debt," but on my end I see them as extremely crippling to the current generation.

Tuition Talk said...

Orthonomics,

I agree. I don't think there really is such a thing as "good debt." After all, the definition of "good debt" is that you can write off a portion of the interest on your taxes. Whoop de doo. One of the ironies is that you "save" more the more you make (and thus the higher your marginal rate), but if you make too much the interest deduction is eliminated. Another problem is that calling it "good debt" encourages people to keep it around longer as they feel they're doing the right thing financially and are actually saving money through the tax deduction. I've had people advise me to pay off my mortgage as slowly as possible so I can keep writing off the mortgage interest.

In a future post perhaps I'll address how this "good debt" has affected me and my siblings.

Tuition Talk said...

Anonymous (I hope you keep coming by, but please pick some pseudonym),

You raise two interesting points.

1) I think RW yeshivas still understand this. They actively fundraise outside the community and many MO give to their charities. I believe that even if there were MO shlichim to RW communities they wouldn't give.

2) Administrators do in some cases make exorbitant salaries. I feel this is wrong to a certain extent, but we need to realize cutting $50K or even $100K off a salary isn't going to solve the problem, though perhaps it is a step in the right direction. Definitely will have posts on this issue.

LeahGG said...

You're not paying massive amounts of college loans because your parents paid yeshiva tuition. You're paying massive college loans because you went to private colleges. If you'd gone to state colleges, you'd be paying less. If you'd come to Israel, the government would have paid your tuition for you and you could have managed with no debt. It's not the yeshivas' fault.

Everything we do in life is a choice.

Taking on debt is a choice. You may have thought it was the best decision at the time, and you may have been misled, which is unfair to do to an 18-year-old kid, but the reality is that the system is unsustainable because people want it all, not *only* because yeshiva tuition is so high.

Tuition Talk said...

Leah,

I went into college with eyes wide open. I was under no illusions that college would magically pay for itself. I chose to go to the best college I got into because it offered superior education and the name would help me down the road. In the end, I was right. Having that college on my resume has been a large boon. Having been on the interviewing side of the table, I had to say that when you have say 100 resumes to go through and pick say 5 people to interview, where a person went to college is a big factor. It's not so simple to say "Go to a state college and have less debt."

I would note that even if I went to an in-state college, I would still have had debt. Maybe not $90K, but closer to half that - maybe $45K.

The whole point is that by paying for yeshiva tuition, my parents were unable to save or help me with tuition for college. One of the reasons I chose to go to a "big name" college was because I knew I needed to get a job that paid significantly more than the jobs my parents had if I were to live comfortably. And now, with that debt, I will be unable to save more before having kids.

It is a vicious cycle if you want to "do the right thing" and try to earn as much as possible to pay for the various expenses frum life entails (and no, I don't mean "extras").

LeahGG said...

TT: I'm not sure that's true. First, your schooling really only counts heavily in your first 3-5 years in the job market. If you graduate magna cum laude from Penn State and have a good internship or two along the way, do you really think that someone who graduates without honors and internships from U of P stands out ahead of you in the stack of potential interviewees?

I notice you've ignored the other elephant I keep pointing at that's sitting in your living room.

Tuition Talk said...

I'll address Israel first then. Before I begin, let me clarify that I don't believe any option should be off the table both on an individual basis or on a community basis.

For me and my wife though, Israel is not an option. Our Hebrew language skills are poor (a product of excellent yeshiva education). But, more importantly, we make very good salaries here which we couldn't do in Israel. Our degrees are non-transferable and our skills are only applicable in the US. The companies we work for do not have an Israeli presence and do not do business in Israel. Additionally, we are both very close with our small families, all of whom live not just in the US, but close by. The answer is more complicated than that, of course, but that's it in a nutshell.

All that being said, I welcome a guest post on living in Israel in terms of tuition and colleges, etc. If you are interested, email me at tuitiontalk at gmail dot com.

Tuition Talk said...

As to your other point, one of my siblings did go to a state university, albeit one out of state (so the savings weren't great). Getting magna cum laude is certainly not easy and not everyone can do it. Personally, going to a well-known and highly-ranked university for my field has served me very well even though my GPA from this school was nothing to write home about. It would have served even better if I had been magna cum laude from this university. Now, several years out of college, people only see the name and don't ask about the GPA, so I find the name has value far beyond the 3-5 years when people asked about the GPA.

Additionally, I took summer classes at the in-state university and I will say that, at least in my field, the education I got at my university was far more rigorous and demanding. I slept my way through the in-state classes and aced them. In my university it was a tremendous struggle to get a B.

This is just my personal experience, mind you.

If I were to advise others, I would say go to an in-state university and pay much less if you feel you can guarantee excellent performance and have connections for good internships. Otherwise, take on the debt at a stellar university, but keep in mind you need to find a high-paying job (i.e., don't go to a stellar university and take on 10's of thousands in debt to leave with a 30K job).

Lion of Zion said...

"Our Hebrew language skills are poor (a product of excellent yeshiva education)"

that's one of the scams of the day schools.

Tuition Talk said...

Yep.

I hope to address this point in reference to so many people referring to our yeshivas as the "Cadillac" model of yeshivas. If what we have right now is the "Cadillac" I'd hate to see the Chevy version.

Eliyahoo William Dwek said...

When ‘dayanim’, ‘rabbis’ and false ‘mekubalim’ use the Torah for their own power and commercial profit, this behaviour is abhorrent.

No other ‘rabbi’ will ever act against another ‘rabbi’ - even when he knows his colleague is clearly desecrating the Torah.

Each rabbi is only worried about losing his own position.
Therefore, the ‘rabbi’, ‘dayyan’ or false ‘mekubal’ (‘kabbalist’) will never effect justice. And he will never truly stand for the Torah or the Honour of Hashem. His pocket will always prevail.

The Torah must never be used for commercial gain and profit. Amm israel can only be lead by those who have the necessary love and respect of Hashem and the Torah.

Eliyahoo William Dwek said...

Any man who chooses to be a ‘rabbi’ (‘true teacher’ of Torah) or a ‘dayan’ (‘judge’), or a ‘mekubal’ (‘kabbalist’) should be doing so Voluntarily. Out of his pure love for Hashem and the Torah. And his Ahavat Yisrael.

If he refuses to do community work voluntarily, and wants and accepts payment for everything he does, such a man should not be heading a community. He should get a job and earn a living. He can collect milk bottles or clean the windows. That is what is called ‘earning a living’.

Torah is learned, studied and taught: out of Love. Voluntarily. But the ‘rabbis’ have turned the Torah into their ‘Profession’, from which they earn money.

We are commanded in the Shema to:
‘LOVE Hashem, your G-d, WITH ALL YOUR HEART, and with all your soul and with all your might.’

‘VE’AHAVTA et Hashem Elokecha BECHOL LEVAVECHA uvechol nafshecha uvechol meodecha.’ (Devarim, Vaethanan, 6:4-5)

Is the ordinary man or woman PAID to pray to Hashem, or to say some words of Torah? No. Has veshalom! But the rabbis are. These men can give ‘lovely’ shiurim that they have rehearsed. But they would not give a shiur without being paid for it.

The true hachamim and rabbis of old, all actually worked at proper jobs and professions.

Wake up! Even a little child could have worked this out. These salaried men can never truly stand for the Torah, because in a case of conflict between a correct course of action according to the Torah, and the rabbi or rav’s pocket – his pocket and position will always prevail.

Pirkei Avot: (2:2)

“Raban Gamliel beno shel Rabi Yehuda HaNassi omer: yafeh talmud Torah im derech eretz, sheyegiat shenaihem mashkachat avon. Vechol Torah she’ein imah melacha sofa betailah ve’goreret avon. Vechol haoskim im hatzibbur yiheyu imahem leShem Shamayim……”

“Rabban Gamliel, the son of Rabi Yehuda HaNassi, said: It is good to combine Torah study with a worldly occupation, for working at them both drives sin from the mind. All Torah without an occupation will in the end fail and lead to sin. And let all who work for the community do so for the sake of Heaven………”