Tuition is rising at
double inflation

Private schools cite the rising costs
of staying competitive

CORRECTION Tuesday, March 1, 2005 » Punahou School's tuition for the 2004-2005 school year was $12,885, not $12,185 as reported in a table on Page A8 yesterday. The Honolulu Star-Bulletin strives to make its news report fair and accurate. If you have a question or comment about news coverage, call Editor Frank Bridgewater at 529-4791 or email him at corrections@starbulletin.com.

Most of Hawaii's big private schools will raise tuition for the 2005-06 school year at a pace nearly double the local inflation rate, and to levels that have some parents and even school officials wondering if things are getting out of hand.

Punahou School's tuition will rise the fastest of several private schools surveyed by the Star-Bulletin, growing $890, to $13,775, an increase of 6.9 percent for the second straight year.

Mid-Pacific Institute will charge $12,970, up $785, or 6.4 percent, while Iolani School is asking for $12,200, an increase of $700, or 6.1 percent.

A year's in-state tuition at the University of Hawaii's law school, by comparison, costs about $11,000.

"It's scary, it really is," said Cissie Chock, mother of two daughters enrolled at Iolani. "We need to be saving for college and retirement, but we can't. It won't be enough."

A number of private-school parents interviewed said they had nothing but praise for the quality of instruction and facilities at local private schools, especially compared with the public school system's much-publicized shortcomings.

But their enthusiasm is tempered by the rising expense, especially given the rise in college tuition, which also has outpaced inflation during the past decade.

Honolulu inflation is 3.3 percent, according to the most recent data.

"It's really a gamble," says Chock. "If you can send them to public school, maybe you can save some money, but the situation may not be good. But if you send them (to private school), you may not be able to pay for college and other things. It's really a hard choice."

Schools say they are being squeezed by rising expenses including medical and other insurance costs, which have surged in recent years.

But they also cite the cost of maintaining and upgrading state-of-the-art facilities and offering competitive teacher salaries that are commensurate with Hawaii's high living costs.

"We're having a hard time balancing the budget, and it's mainly due to the cost of doing business in Hawaii," said Saint Louis School Chief Financial Officer Nancy Lacambra.

Tuition at some of the larger schools has grown about 30 percent in the past five years.

That has not hurt demand, said Mid-Pacific Institute President Joe Rice. The school has been receiving record numbers of applications, but he admits tuition is nearing a point that causes concern.

"It's a constant worry. We know we're reaching that point when we have significant increases in requests for financial aid," he said, adding that those requests are indeed growing.

Hawaii Preparatory Academy on the Big Island will remain the most expensive school in the state, with a price tag of $15,000 for grades nine to 12, an increase of 3.5 percent.

Most other schools, though, will see increases of 5 to 6 percent and more.

That is a slightly higher rate than in past years, school officials say, which compounds the impact on parents, because 6 percent translates into an ever-larger dollar amount as tuition grows.

At most schools, tuition does not cover a range of other expenses such as books, extracurricular activities and food, particularly in the higher grades.

Susan Furuya, who has a son at Punahou and a daughter at Hawaii Baptist Academy, says their tuition is "worth every penny" but that it dictates the family lifestyle.

Off-island trips are rare, fast-food consumption is up and her accountant husband works "really long hours" to make it happen.

"I guess you just learn to adapt. For our children we're prepared to make all the sacrifices we need to," Furuya said.

Punahou's increase is due in part to added maintenance expenses from its new 140,000-square-foot middle-school facility and growing technology costs, said Chief Financial Officer John Field.

These include a planned campus wireless system and the expansion of a program that lets students lease laptops.

Punahou tuition has roughly doubled over the past decade, but Field said growth in financial aid has kept pace. About 400 of Punahou's 3,700 students receive need-based awards averaging about $5,000.

He added that at Punahou, like other schools, tuition covers only about 80 percent of a student's education costs, the rest coming from the school's endowment and donations.

Field expects tuition to continue rising by at least 4 to 5 percent, but said Punahou plans to devote more resources to "ramping up fund raising so that annual giving can play a more significant part of our budget and reduce upward pressure" on tuition.

But he notes, "Tuition will not go down."

Headmaster Val Iwashita said Iolani also is concerned about that growing price pressure.

"It's not that $12,000 is beyond reach, but the higher it goes, it reduces the proportion of the student population that we can serve," he said.

Iolani's Iwashita said the uneven capital markets of the past few years have hampered the school's ability to use investment earnings from its $100 million endowment to subsidize schooling.

"You might say, 'Why not spend some of the endowment?' But long term, we can't let the endowment deteriorate. We need to work on growing it to ensure that we can support future generations," he said.

He says the school plans to focus on managing costs better and meeting the needs of middle-income families who do not qualify for financial aid.

Iolani is formulating plans that could be approved by its board as early as June that will create additional revenue streams and mark "a new direction for Iolani," he said without elaborating.