The Pay-What-You-Can Plan

Nonpublic schools experiment with negotiated tuitions

Like many other parochial schools, Bishop McNamara, a small Roman Catholic high school in Kankakee, Ill., found itself in a fiscal predicament. Community unemployment had reached 13%, and working-class parents could no longer afford the school's $850 yearly tuition. Enrollment had dropped steadily for a decade. The full tuition fell far short of the school's cost per pupil (estimated at $1,400 a year), but no increase was possible. Then school officials decided to try a new tactic: negotiating tuition.

Parents met last spring with administrators and volunteers to work out how much of the $1,400 cost they could afford. Those who were able paid the full amount; the rest pledged what they could. Says the Rev. Irwin Savella, Bishop McNamara's principal: "We didn't ask to see their IRS forms. We never said, 'We hear you have a new car.' " The only paperwork was a simple tuition form with name, address, number of children in school--and a monetary pledge. Surprisingly perhaps, the plan worked. Freshman enrollment for the current year increased 56%, from 128 to 200 students, partly because parents who were discouraged by a fixed tuition were enticed by the new flexibility. With 12% of parents paying the full cost, tuition revenue rose by almost 20%, enabling Bishop McNamara to accept students paying little or nothing.

Last week parents returned to Bishop McNamara's gym to negotiate for a second year. The sessions were 20-minute low-key talks at folding card tables. Says Savella: "It's kind of like hearing confession, except this is a business transaction." Negotiator Jack Pucell talked to one couple who had been ashamed of being unable to pay anything last year. Says he: "He's finally landed a job, and although he has had it only three months, they insist on paying the full cost." Another family installed a wood stove to cut utility bills so that they could pay more tuition. Says Savella: "Negotiated tuition generates a level of commitment we could never get with fixed tuition." At week's end parents had pledged more than $600,000, for an increase of 10% over this year's total.

Most schools experimenting with negotiation so far are parochial. In Albany, "fair share" plans at 34 Catholic schools have boosted tuition revenues as much as 15% per year. In Denver, where 30 Catholic elementary and high schools have been negotiating tuition for four years, school revenues from tuition are up 21%. A similar method has also worked for New York City's independent Manhattan Country School, which is far more expensive but where 44% of the students are members of minority groups. In what the school calls a tithe, well-to-do families pay 10% of their income up to a maximum of $4,700, while poor families pay much less.

Negotiated tuition has its detractors. Says Farmer Gene Wilkey, who has two children enrolled at Bishop McNamara: "I know there are some people paying nothing who can afford to pay, and I don't like it." A model for the program, Marian High School in Mishewaka, Ind., is floundering. Last year more than 50% of the parents pledged tuitions of less than $800, even though the total cost of educating each student is $1,500. Bishop McNamara, however, is prospering: while many public schools are abolishing extracurricular activities, it is planning to construct a new gymnasium.

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