The Affordability Dilemma

The number one conversation that I have with parents every year is the very real concern about affordability in independent schools. I came across the book Higher Education in the Digital Age, by William G. Bowen, president emeritus of the Andrew W. Mellon Foundation and Princeton University. In the first chapter of this book titled: Costs and Productivity in Higher Education, he highlights some of the challenges that private and public schools face in trying to lower prices and improve productivity.

Mr. Bowen states in his book that inflation is more prevalent in the performing arts and education because “in labor intensive industries such as the performing arts and education, there is less opportunity than in other sectors to increase productivity by, for example, substituting capital for labor. Yet markets dictate that, over time, wages for comparably qualified individuals have to increase at roughly the same rate in all industries. As a result, unit labor costs must be expected to rise faster in the performing arts and education than in the economy overall.” The inability to substitute capital for labor explains succinctly why schools like ours seem to consistently raise the cost of tuition.

In the same chapter, he quotes Robert Frank of Cornell University who states: “While productivity gains have made it possible to assemble a car with only a tiny fraction of the labor that was once required, it still takes four musicians nine minutes to perform Beethoven’s String Quartet No.4 in C minor, just as it did in the 19th century.” I think that this observation serves as a fine, illustrative example for Mr. Bowen’s statement on labor unit costs in education and the arts, which lead to the inexorable rise in expenses therein.

The affordability issue is compounded today when one contemplates the challenges that educational institutions face with regard to maintaining a cutting-edge curriculum and keeping up with the exponential growth of promoting critical 21st century learning skills.

Because the best schools are constantly looking to add value to their educational programs, Mr. Bowen points out that “schools are good at adding things but not good at subtractions.” He also recognizes that teachers “are collections of highly specialized talents that cannot be readily shifted from, say teaching Russian to teaching Spanish.” In short, there aren’t many movable parts or flexibility in a school budget which can contribute to the maximizing of financial gains for the institution, just as it can be done for example in corporate America.

At the Academy where our class sizes are small, we put a special emphasis on personal contact between teachers and students. Moreover, if we deem a course essential for a student’s development, even if the course is undersubscribed, we will offer it to the benefit of our students, despite perhaps incurring additional costs. In other words, our student needs, regardless of costs, always come first!

Lawrence Bacow , former president of MIT points out a mentality at MIT during his tenure at that institution that is also shared by us here at Staten Island Academy, which is “the mentality to do what we[ need] to do to make sure our students[ master] the material, regardless of cost…. We [look] to reduce class size, increase teacher-student contact, and do more hands on learning etc. all these drive costs up and productivity down.”

These examples are just a snapshot of the affordability predicament with which many independent schools find themselves. We want to continue to be the “engines of opportunity” providing the absolute best for our charges, despite the awareness that this educational disposition drives up costs and expenses for schools. As William J. Baumol observes in an “Overview” paper about colleges : “The anger and resentment expressed toward [school] leaders appear to be growing, despite the limited ability of those leaders to make [school] cheaper quickly without lowering quality in ways that will disappoint the same people who decry the higher prices.”

Ultimately, I think that Mr. Bowen gets to the heart of the problem of increased tuition costs and whether or not families should assume those costs when he states: “The key question, then, is whether we will choose, collectively, to invest the fruits of overall productivity gains on goods such as quality education.”

We are acutely aware of the fact that each and every family is making a supreme financial sacrifice by enrolling their children in independent schools, but we believe that the statistics bear out that this expense is the finest and surest investment that one can make for their child’s life and future. When I canvass our alumni, without fail, they say that the greatest dividends that they have received in life have come in large part due to their Staten Island Academy education. It is my sense that our current families feel the same way.