We have 3 kids that attend Modern Orthodox yeshivas. While they aren’t the most expensive ones in the tri-state NY area, the tuition (with financial aid) is still more than we can afford. We use credit cards to cover the tuition. However, since we can’t pay the card balances in full, we’ve accrued quite a bit of debt. We don’t live an extravagant lifestyle; the debt is almost exclusively from tuition. This never-ending debt won’t stop until the kids are all finished with school. I have no idea how to get out of this mess and feel constant stress over it. Any guidance would be appreciated. – Anonymous
I’m sorry to hear about your situation. It’s obviously very challenging to have this burden hanging over your head every day. It’s important to know that you are not alone in this struggle. Many families in the frum community are facing similar circumstances. While there is no easy answer, I will offer you a framework to help you through this predicament.
Do everything YOU can to pay your tuition bills: I spend a lot of time defending yeshivas and advocating for parents to cut every other financial outlay (even retirement savings!) to pay their kids’ FULL yeshiva tuition. After all, it’s unfair for someone with available cash flow to depend on the generosity of other parents who are also making sacrifices to send their kids to yeshiva.
Before taking on debt or asking for tuition assistance, it is important for every family to do everything in their power to free up cash flow to be able to afford tuition. This includes cutting discretionary expenses such as:
- Going out to eat.
- Shopping for unnecessary new clothes.
- Streaming services (e.g. Netflix, Hulu)
- Memberships that are unnecessary or not used.
- Excessive car payments: Get the cheapest automobile possible and no household needs more than two vehicles.
- Outsized mortgage payments: these can be minimized by moving to a smaller home.
Checking your monthly credit card bill is a helpful way to take inventory of many of these items, including recurring memberships and subscriptions. Taking stock of your spending is also an important first step for prioritizing your expenses. Being an Orthodox Jew comes with certain tradeoffs. There may be things that are important to your family, but you need to determine where they rank relative to your other financial responsibilities. My guess is getting your kids a proper Jewish education will take precedence over most other expenses.
Ask the yeshiva for more assistance: If you are already doing everything in the previous bullet point (and it sounds like you are), then you need to ask the yeshiva for more assistance. Let the tuition assistance committee know your situation. Show them the supporting documentation that illustrates that you don’t spend frivolously. Provide documentation that you are accumulating more and more credit card debt in order to pay your yeshiva tuition bills. The folks who serve on these committees are mostly volunteers. They generally accept these positions because they want every parent to be able to send their kids to yeshiva. I imagine they will be happy to work with you.
While sacrifices need to be made to live a frum lifestyle, NO family should be expected to accumulate credit card debt to send their kids to yeshiva. It’s the yeshiva’s responsibility to do more to help parents in this scenario!
Move your kids to a more accommodating yeshiva: If the yeshiva isn’t willing to work with you, then consider pulling your kids out of this school and explore cheaper alternatives. Since you do live in the NY area, you are fortunate enough to have plenty of good options.
I encourage you to think a bit outside the box and consider a yeshiva that may not be 100% in line with where you stand hashafically. You noted that your children are in a Modern Orthodox school. It may be worth considering a school that is a bit more yeshivish if it is a lot cheaper. I’ve had clients and friends who have moved their kids to more yeshivish institutions due to frustration with their local schools. Fundamentally you want a school that will instill a love of yiddishkeit in your children. Everything else is just gravy.
The drawback to this approach is that it may be more challenging socially for your children. However, kids are resilient and will adapt to their new environment. Furthermore, it can be an excellent temporary solution to provide you with the financial breathing room you need. If your kids are still in elementary school, you can have them rejoin the Modern Orthodox Yeshiva system for high school if your financial situation has improved.
Strategies to pay back credit card debt: I’m not an expert on credit card debt, but here are a few options to consider for handling your credit card debt.
1) Call credit card company and work out payment plan: Most people don’t take the initiative, but if you are willing to proactively speak to your credit card companies, they may be willing to negotiate more favorable repayment terms.
2) Consider a snowball approach: This strategy, which has been popularized by personal finance personality Dave Ramsey, focuses on paying down the account with the lowest balance first. As you direct your larger payments toward that balance, you must continue making minimum payments on your other accounts to avoid paying late fees, hurting your credit, or defaulting. Once the smallest debt is fully paid off, you move onto the remaining smallest balance. This process continues until you pay down all your debt. Psychologically, this is a helpful approach since it allows you to get small wins by quickly eliminating small debt balances, so you build momentum and confidence to tackle larger debts.
3) Debt avalanche method: This is where you focus payments on high-interest debts first, while making the minimum payments on the rest of your accounts. When the account with the highest interest rate is paid off, put the money you’d allocated for it toward the debt with the next-highest interest rate. You repeat this process until all your credit cards have been paid off. The biggest benefit of this approach is it allows you to save on interest charges.
4) Credit card consolidation: You can also transfer the debt balance on all your credit to a card that offers a 0% interest rate for up to two years. During this time frame, do whatever you can to pay off all this debt in full while there is no additional debt accumulating on your balance. After the initial grace period ends, interest will begin accruing again at rates that are just as high as your current cards, so plan accordingly.
Ultimately, your predicament will require tough decisions for your family. Thankfully, the options I suggested are all practical steps to climb out of your challenging situation. Taking the proper actions today will allow you to become debt free in a few years without sacrificing your children’s Jewish education.