Private Schools Brace for the Uncertain Impact of a Recession

By Mark Walsh — June 19, 1991 9 min read

Last fall, as a small independent school in the Northeast was plan0 ning its annual fund-raising drive, a fear of how the ongoing economic re0 cession might affect their efforts rove school officials to double the number of volunteers they had used in the past, as well as take other steps to sharpen their development plan. The school’s leaders were afraid that the nation’s economic downurn might make it difficult to meet their fund-raising goal of $225,000. When the drive was over, however, the school had secured pledges totaling $325,000.

“That is called ‘fear of recession’ fund raising,” said Helen A. Colson, a Chevy Chase, Md.-based consu tant to independent schools.+

As the nation continues to weath0 er a recession of unpredictable dura0 tion, officials at private schools are keeping a wary eye on how it might affect their operations.3

At some schools, administrators report that fund raising has become much more challenging. At others, officials fear that enrollment will de0 cline as annual tuitions, which range from a few hundred dollars at small neighborhood schools to more than $15,000 for the top boarding schools, are no longer within the reach of some parents.

And at still other schools--includ0 ing some Roman Catholic elementa0 ry and secondary schools across the country--the recession is simply one more factor contributing to var0 ious demographic and financial trends that will combine to force them to close their doors after this school year.

But for many private schools, the economic downturn seems to have had little serious effect.

The topic was scarcely mentioned during a conference last month in Washington, D.C., on “The Dollars and Cents of Private Schools."3

“I don’t think the recession has quite hit private schools over the head yet,” Bruce S. Cooper, a professor of education at Fordham University in New York, said at that meeting, spon0 sored by the office of educational re0 search and improvement of the U.S. Education Department.

Nor did discussion of the recession pervade the annual conventions earlier this year of two of the na tion’s largest private-school associ ations--the National Association of Independent Schools, which repre sents many leading independent college-preparatory schools, and the National Catholic Educational As sociation, which represents Roman Catholic schools and educators.

“Our convention came just at the time when many of our schools had sent out acceptance letters ! year,” said Meade B. Thayer, direc tor of financial-aid services for the nais, which held its convention in March. “I think we are starting to hear both good stories and bad sto ries about the impact of the reces sion on enrollments."$ )

Nevertheless, there is an under current of anxiety in the offices of private-school leaders nationwide.

“It is definitely on everybody’s minds,” said Carolyn Peter, director of the Winsor School, an indepen dent school in Boston.

Private-school educators under standably fear that the impact may be greatest in regions of the country hardest hit by the recession. 6

“It is very clear the recession has had an impact on independent schools in the Northeast,” said Fred erick C. Calder, executive director of the New York State Association of Independent Schools. %%

Day-school tuition in New York City, for example, runs at least $10,000 for the leading independent schools, Mr. Calder said. With a de cline in the number of Wall Street executives earning six- and seven- figure annual incomes, private schools in the city have already lost some enrollments, he said.3

Two day schools in Manhattan, the Birch Wathen and Lennox Schools, have agreed to merge next year, while the Walden Lincoln School, which was formed through the merger of two other independent schools two years ago, decided to close its doors after mounting finan cial losses.7

“They have been struggling for several years” with declining enroll ments and a more competitive mar ketplace, Mr. Calder said of the closed schools. The recession only added to their woes.

But the overall impact of the downturn is “spotty,” he added. De spite the closings, his organization has added six schools to its member ship this year. Also, he cited the re sponse from alumni when another Manhattan day school, the Little Red School House, threatened to close its high school next fall. nough money was pledged during a last-ditch fund-raising effort to avert the closing.

Boston and the rest of New Eng land have also been hard hit eco nomically. But Richard E. Barbieri, executive director of the IndepenLdent School Association of Massa0 chusetts, believes that the recesion’s heavy impact on public educa tion may actually drive some arents to finance a private-school $ducation.

“For every parent who feels they can’t afford a private school next year, there is another family who is dismayed with public-school cuts,” he said.’

Ms. Peter of the all-girls Winsor School in Boston said she has been “steeling” for the recession’s impact for several months. “I’ve been somewhat expecting it would be harder for us to keep our enrollment balanced,” she said. ‘But we are full "$

Some 380 students have signed up for the 1991-92 school year, for hich tuition will be slightly less than $12,000.

“I think most schools have added a little cushion with the expectation that we may not have everybody in September” from among those who have said they will attend, she said.

Added Mr. Barbieri: “When it is time for making the initial fall tuition payment this summer is when e will really know."$ ,

Judging the impact of the reces sion is much more complex for atholic schools, which for a variety of social and demographic reasons have seen steady enrollment delines over the past 25 years.

Annual tuition at Catholic L,chools is much less on average than tuition at the elite prep schools. Ac cording to the ncea, average reshman tuition at Catholic high schools in 1989 was about $2,300. Average elementary-school tuition was $924 in 1989.

“There are always people stretch ing to pay tuition,” said Michael uerra, director of secondary schools for the ncea “Any economic situa0 tion that produces pressure and re0 straint will push some people out.”

Thomas Vitullo-Martin, a New York-based consultant to Catholic schools, said: “It is difficult to sepa0 rate the impact of the recession from other developmental trends. Catho$lic schools are hit by changes in birthrates, and they are hit by finan0 cial issues in the inner cities. Those schools are dependent on fund rais0 ing. Now they are highly vulnerable to the recession."$

Several Catholic schools have an0 nounced plans to close at the end of this school year, including five in the Archdiocese of New York. But all the schools appear to be victims of long-term enrollment decreases and financial difficulties.

Tough economic forecasts have not discouraged church officials in at least two major archdioceses, New York and Philadelphia, from embarking on ambitious fund-rais0 ing plans this year for Catholic schools.$

The Archdiocese of New York has launched a $100-million campaign to raise funds to keep schools open in poor neighborhoods. The Philade phia Archdiocese is seeking the same amount of money over the next three to five years to aid its fi0 nancially strapped schools and par0 ishes. One way families are trying toLel10lmaintain their ability to keep chil dren in in both Catholic and inde0 pendent schools is by applying for fi0 nancial aid.

“We are certainly hearing of a tre0 mendous increase in requests for fi0 nancial aid,” said Mr. Barbieri of the Independent School Association of Massachusetts.

“There are many families whoLmay be reasonably well off, but their cash flow has been hampered by the recesssion,” said Mr. Thayer of the nais “They are applying for finan0 cial aid. But schools are also increas0 ing the number of financing options” for tuition, such as loan programs or extended-payment plans.

Many private-school educators also agree that, facing economic dif0 ficulty, many parents will strive to cut back in other areas before they pull their children out of private school. “When there is an economic pinch, you can defer buying a new car, but you can’t defer a child’s edu0 cation for a year or two without do ing damage,” Mr. Barbieri said.

The Education Department’s re cent two-day conference on private schools drew department officials, education researchers, representa tives of most major private-school associations, and several officials of individual schools.

One theme that emerged from the conference was that the current re cession has had less effect on pri vate-school enrollment and growth than have several more complex trends.

Mr. Cooper of Fordham argued that, throughout the 1980’s, public- school-reform advocates held up pri vate schools as “exemplars” of choice and competition, and suggested that public schools be restructured along the lines of private ones.

Thus, he said, throughout the dec ade, more public schools were grant ed unique missions through the de velopment of magnet schools. Public schools were also given greater autonomy and site-based decision- making power, and were encour aged to develop a greater sense of community.

“The net effect of public schools becoming more private-like is that they are pulling students from the private schools,” Mr. Cooper said. “For parents, the incentive to use the public system is very strong.”

Mr. Cooper also discussed a re cently published study of private-L school enrollment trends that he conducted along with Grace DonHL dero, a doctoral student at the uni versity.,

As of 1989, some 5.3 million chil dren were attending more than 27,000 nonpublic schools in the United States, and the private sec tor now educates about 12 percent of all U.S. students, the researchers re port in “Survival, Change, and De mands on America’s Private Schools: Trends and Policies,” which was published in the Winter 1991 is sue of the journal Educational Foun dations.-8

The researchers reviewed federal private-school surveys, state and lo cal education agency records, and di rectly sampled private schools and organizations for their study.

Since 1965, when nearly 9 out of 10 private-school students attended a Catholic school, enrollment in Catholic schools has dropped from 5.6 million to about 2.6 million in

1989. But during that same period, enrollment in non-Catholic private schools was growing from less than ,000 to nearly 2.8 million, the re searchers found.

Leading the growth among non- Catholic schools were four separate sectors: Lutheran schools, Jewish L
day schools, evangelical or fundaL mentalist Christian schools, and home schooling.

Lutheran schools have grown in 1965 to 300,000 in 1989, a 44 per cent jump. Jewish day schools have grown from 73,000 students in 345 schools in 1965 to 115,000 students in 585 schools in 1989, a 57 percent enrollment increase.

As for fundamentalist Christian schools, the authors say one “seemed to open every day” throughout the 1980’s, mushrooming from an enL rollment of 110,000 in 1965 to 985,000 in 1989.

The increase in the number of par ents educating their children at home also picked up speed in the 1980’s. Mr. Cooper conservatively estimated the number of students being educated at home in 1989 at ! 220,000, although he noted that some estimates go as high as 1 mil# lion students.

The authors conclude that, in the absence of any major governmental & assistance programs, such as vouch’ ers, private schools will continue to ( succeed or fail on “their own de) vices."0

“The mix has clearly changed, L+ with Catholic school children now in , the minority among nonpublic school students,” the authors write. . “What was once an urban, ethnic, immigrant, and seaport activity (New York, Chicago, Boston, Phila1 delphia, Detroit, Cleveland) has now become a mainstream, main-3 street, inland, upland, small town, 4 Protestant effort. Private schools are everywhere.

A version of this article appeared in the June 19, 1991 edition of Education Week as Private Schools Brace for the Uncertain Impact of a Recession