Private schools are a discretionary item that is going to have to be ditched my many trying to avoid the much maligned public school system, where seniority is more important than teaching talent. That can only be good for our kids looking out 15-20 years….

What you see here will be repeated in our universities – as we’ve noted many times. I am working on a piece on that end as many articles have come up of late showing the struggles finally hitting that area of life. Eventually, they too have to face reality and cannot charge parents 8-11% annual tuition increases in a 3% wage increase country.

• Trinity Episcopal School survived Hurricane Ike last fall. But then another storm hit — the economy. The Galveston, Texas, school, where tuition is between $5,000 and $8,000 a year, has seen its enrollment drop 12%, says David Dearman, the head of the school. Many parents of its students were among the 3,000 workers laid off by the area’s largest employer, the University of Texas Medical Branch. At the end of 2008, the school’s endowment was $800,000, down about 20% from July. “Our school will survive, but it will take years to recover,” Mr. Dearman says. (sounds like a good proxy for the greater economy…. at least they are not brainwashed to believe they will recover in “6 months”)
• Trinity Episcopal School is one of many kindergarten-through-12th-grade private schools caught in the middle of an economic tempest: anemic endowments, dwindling donations, financially strapped parents slashing tuition from the family budget, and an exodus to suburbs with more appealing public schools where costs are lower.
• “The discourse has shifting from sustainability to survivability,” says Myra McGovern, a spokeswoman for the National Association of Independent Schools.
• Parents also are donating less to private schools. Jessica Gottlieb of Sherman Oaks, Calif., pays $34,000 in tuition to send her 7-year-old and 10-year-old to the Wesley School in North Hollywood. She sees that expense as “a non-negotiable part of the family budget.” Not so for her charitable contributions to the school. Ms. Gottlieb, concerned about the general outlook of the economy, has cut her donations this year to just a fifth of what she gave last year. “It’s not because I believe in the school less; it’s just what we could afford to do. And I know others are doing the same,” says Ms. Gottlieb, whose husband is a movie-industry executive.
• At Phoenix Country Day School, where annual tuition ranges from about $16,000 to $21,000, “airplane portions” of pretzels have replaced muffins and cookies at staff meetings. Seven of the school’s administrative employees have moved into a new office: a “1960s-era former locker room made of corrugated metal and located in the maintenance area,” says Joan Risley, a spokeswoman for the school. The Phoenix Country Day School’s endowment, like many other portfolios, fell about 30%, to $13 million from $17 million, says Geoff Campbell, the head of school.
• Some children of recently laid-off Wall Street employees in the New York City area and those in the auto-making hub Detroit have been pulled from schools or reneged on contracts for the 2009-2010 school year.
• One option for many families is schlepping to the suburbs, where the public schools are often more highly rated than in cities. Montgomery County School District, which serves Washington, D.C., suburbs Bethesda, Rockville and Silver Spring, Md., has seen an “unexpected” spike in public-school enrollment this year, according to Chris Cram, operations manager with the school district. This year, it received 1,500 new students and anticipates an additional 1,300 for 2009-2010, for a total of 139,000 students. Many of the new students previously attended private schools, Mr. Cram says.
• Some parents are opting for loans to help fill the financial-aid gap, says Ms. McGovern of the National Association of Independent Schools.
• She’s also hearing stories of grandparents stepping in to help pay tuition bills. (thank God, one generation actually saved and has some spare dough)

Just wait until next fall….

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