The Cost of Education

Posted on Jun 25 20

One of the most common questions circulating conversations is “why haven’t schools significantly lowered tuition?”

I feel somewhat qualified to answer this question since I have the perspective of a school administrator and parent (one of my children is still attending Cambridge while the other is moving up to big school.) Like any organization that needs to be independently economically viable in the long term, our tuition fees collected and support from stakeholders must equal or exceed our expenses, if not, when Cambridge runs out of cash, we will close.

What are the major expenses of a preschool? Payroll is our largest expense. Retaining to teaching talent and training new teachers is not cheap but it is the heart of our service. Payroll comprises about 45% of our expenses. The next is amortization and rent (for centers we do not own.) This is about 30%. The balance of the 25% is for school materials, repairs, research/development, communication, and a few variable costs.

In order to provide a significantly lowered tuition, we would have to significantly lower expenses. We’ve refused to furlough, lay-off, shorten hours or decrease the benefits and pay of our teaching staff. We have an obligation to them and they are rockstars. In order to do so, we’ve used up everyones service incentive leaves, cancelled our Christmas party, and cancelled our group outing (traveling is also currently not the pleasant experience it was before.) Our generous landlords and banks have given rent condonation and the Bayanihan Act legally mandated that rent during the enhanced community quarantine was not collectible. Still, the expense is significant. Electricity and other utilities have gone down but other expenses such as paid Zoom accounts, faster internet, printing and delivery of materials have more than compensated for the decrease in variable expenses.

At Cambridge Philippines, we have created a purely online program that does cost less than regular tuition. I’ve written a few times that this is a stop-gap and not a replacement for physical early childhood care. We are not set-up to be a purely online school and will most likely never be one. Class sizes remain small and the online setting was created to mimic (as best as possible) the physical preschool education service we provide. We will continue the purely online program going forward, but the soul of our educational philosophy and system is still in the physical classroom.

So where do parents go from here? Some parents have voiced taking a year off until when a credible vaccine is created. I’m currently in my mid-30s and if I graduated university a year or two later, I honestly do not think it would have been a huge detractor professionally. The big issue though is what would I have done in those one or two years away from school. What should kids do if parents opt to take a year off? There is no cookie cutter answer for this but we do know that learning is a process. Learning is a habit. Developing good habits like work ethic, grit and empathy have to be constantly worked on and if parents are considering pulling their children out for a year, they should consider how they can stimulate and keep their kids’ spark going.

Whether to take a year off, enroll or not, or change school is entirely up to you.

The follow up question question to first question presented is: what is the cost of no education? I’ve been blessed by the sacrifices (both time and money) that my parents and family provided me. My formal education costed a fortune. My parents gave up luxuries, vacations, and a boat load of time; but, like many parents who were committed to education their child, I dare say that they do not regret it. Education comes in and out of the classroom (both online and physical.) Every parent simply does the best that he or she can do given their resources (time, money, family, and so forth.) I do believe that the cost of no education is simply too great.

“Price is what you pay. Value is what you get.”
-Warren Buffett, Chairman of Berkshire Hathaway


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