Three Atlanta-area businessmen plan to open a private Christian preparatory school using a financing plan that ties tuition to homeownership.
The school, set to open in 1996, will be built in a suburban Atlanta development and will serve largely as an amenity for residents there, Jim Garrett, one of the school’s founders, said.
The school, called the Washington and Lee Academy, would replace annual tuition with a one-time “membership” charge. That charge--from $10,000 to $16,000 per child--could be rolled into home-mortgage or equity loans.
With their plan, believed to be the first of its kind, Washington and Lee’s founders said they can make private education affordable for more people.
By investing membership payments as an endowment, the school could use accrued interest to pay for top-rate facilities, Mr. Garrett said.
Homeowners, meanwhile, could spread the expense of a private education over the term of their mortgages. Memberships would transfer along with the house and could increase a home’s resale value, Mr. Garrett said.
If the value of the memberships appreciated considerably, Mr. Garrett said, “the potential exists that you could send your kids through prep schools for virtually nothing.”
A New Breed
Washington and Lee’s financing plan would be a first, according to Margaret Goldsboro, the spokeswoman for the National Association of Independent Schools.
“It’s a new breed,” she said. “It raises lots of interesting questions.”
Because the membership would be included in their mortgage payment, Howard Abrams, a professor of law at Emory University in Atlanta, said homeowners could claim the membership as a tax deduction.
But the plan comes with some risk, Mr. Garrett said. Although a homeowner could recoup membership costs when the house is sold, no rebates would be offered if children do not meet the tough academic and discipline standards planned for the school.
And the founders may run afoul of federal fair-housing laws that prohibit advertising that discourages home purchases by people of a particular race or religion, said Judith A. Brown, an assistant counsel with the naacp Legal Defense and Educational Fund.
“If the school is used as an advertising tool for the community,” Ms. Brown said, “it could be seen as discriminating against those who aren’t Christian.”
Mr. Garrett said that the school’s founders will comply with fair-housing laws. Peachtree Corners, the Georgia development where the school will be built, is almost fully occupied, but Washington and Lee’s founders plan to build other developments nationwide with similar private schools as part of the marketing strategy.
“It certainly is not our intent to discriminate against anyone, particularly on the basis of religion,” Mr. Garrett said. “We’re going to make it very clear that it is a nondenominational Christian school.”
While the schools would be run as nonprofits, the founders--a prominent Atlanta developer, a banker, and Mr. Garrett, a former marketing executive--said they hope to make money on side ventures. One such venture would be a lending institution that would handle the mortgages and home loans for parents. Another would start up such schools nationwide but turn over ownership in exchange for a 2 percent share of the school’s endowment, he said.
