Affordable Jewish education: Fresh ideas
January 8, 2014
How do we reduce the cost of Jewish schooling while encouraging more parents to make Jewish choices in educating their children? JTA has recently published proposals by three experienced communal leaders; they are excerpted below. To read their full proposals, visit jta.org.
Create tax incentives for scholarship funds
A handful of states already have tax incentive programs that help parents afford day school education by giving tax credits to people or institutions that donate toward tuition scholarship funds. In these states, the programs, which have been a lifeline for Jewish parents and Jewish schools, also have benefited Catholic and independent schools.
In New York, Catholic, Jewish, and independent voices are banding together to advance this legislation. But we need the support of the Jewish community nationwide.
Donations to scholarship funds already are subsidized through federal and state tax deductions. What makes tax credit programs so valuable is that they increase the savings — and incentives — to donors from a tax deduction, which might amount to 40 percent savings, to a dollar-for-dollar tax credit.
Under the proposed bill in New York (similar to NJ’s proposed Opportunity Scholarship Act), known as the Education Investment Tax Credit Act, instead of paying $10,000 in state taxes, for example, you can settle the debt by donating $5,000 to a nonprofit scholarship fund and paying $5,000 to the state. New York state already offers tax credits for locally brewed beer and film and television production. Educating our children seems no less legitimate.
The program would help boost donations to art and music programs in public schools and support scholarship funds for students to attend non-public K-eight schools. This would strengthen education for all and fortify our schools for years to come. And it means more scholarship relief to families already sacrificing so much.
Rabbi Joshua Lookstein is head of Westchester Day School in Mamaroneck, NY.
Borrow day school dollars from Israel
Israel, and the strength of its economy, also can play a critical role in making day schools affordable in new ways.
Israel has an excellent credit rating — A+, according to Standard & Poor’s. The Bank of Israel could make long-term, low-interest loans available to Jewish families, perhaps working with an Israeli bank that has a U.S. affiliate. Or at the very least, it could provide a loan guarantee for day school parents.
While our children were at Jewish Community Day School, my wife, Susan, and I took out a $23,000 loan one year to help cover tuition through Prepgate, a commercial service for private-school families. It carried a relatively high interest rate of LIBOR (the international base rate for loans) plus five to 10 percent. If the loan were generated by the Bank of Israel and passed along to us at cost, it would be far more affordable.
Here’s how Israel’s financial role would work: While a child is enrolled in Jewish day school, part of the repayments would be covered for parents — half by the local Jewish federation and half by the State of Israel.
Payments would be frozen whenever the recipient visited Israel, whether on summer programs, junior year abroad, MASA, or some other long-term program. If the recipient immigrates to Israel by a certain age and stays for at least three years, then all or part of the loan would be forgiven.
The State of Israel is also creating a sovereign wealth fund to invest wisely the huge windfalls it expects from its recently discovered natural gas deposits — an estimated $125 billion over the next two decades. While Israeli education, defense, renewables and society certainly should be the major recipients of the profits here, asking Israel to set aside 10 percent of the funds, or $12.5 billion, to finance affordable Jewish education around the world would radically transform lives and strengthen Israel by strengthening Jewish peoplehood.
Yosef I. Abramowitz lives in Israel and works with two solar companies.
Support tuition-free Jewish preschool
In response to the recent pledge by Jewish Federations of North America Chair Michael Siegal to raise $1 billion to support tuition-free Jewish preschool, some have dismissed the idea as just another pie-in-the-sky fix to the continuity problem. I disagree.
Given the consensus about the importance of preschool to starting youngsters and their families on their Jewish journeys, let’s be clear about what is and is not viable to propose. Advocates like me who wish to subsidize Jewish preschool are not proposing free tuition for every Jewish child for years. That simply would be unaffordable and unsustainable.
Rather, we propose providing a substantial gift voucher to families to help offset the cost of participation — something my federation colleagues in Chicago; Palm Beach County, Fla.; and Western Massachusetts have been doing for a number of years through the Right Start program.
The Right Start voucher — a maximum of $2,000 with no means test — applies to tuition for a family’s first child to attend any participating preschool. The amount of subsidy depends on how many days a week the child attends ($2,000 for five days a week; proportionately less for fewer days).
In Chicago, Right Start helped increase the percentage of Jewish children attending Jewish preschools from 30 to 40 percent in just a few years. Imagine if the full cost were paid for the first child in the family. No doubt the number enrolled would rise dramatically.
How can we make that happen throughout the United States?
One strategy would be to establish a large national fund to match local community contributions. If the full cost of five-day enrollment were, say, $7,000, the national fund would match the local community’s $3,500 gift to the parent. By requiring the local community to pay half the cost, we would ensure long-term financial sustainability.
Preschool is a normal activity in the United States. Bringing Jewish preschool costs below market costs of other preschools or making it just free for the first child in a family will spike enrollment.
Steven B. Nasatir is president of the Jewish United Fund/Jewish Federation of Metropolitan Chicago.