El Cerrito Private School Facing Bank Seizure
EL CERRITO (KCBS/AP) – A private school in El Cerrito needs to raise nearly $1 million to avoid a bank seizure.
Officials at the K-8 Windrush School say that all 165 students would have to find new schools by Oct. 28 if they can’t come up with the money.
The school’s financial woes stem from a $13 million bond it used to build a new middle school in anticipation of an influx of new students.
KCBS’ Susan Leigh Taylor Reports:
But the recession instead forced parents to pull their kids out of the school, which has an annual tuition of about $20,000 a year depending on the grade level.
Windrush can now no longer make payments on the bond. Since it had put up the school property as collateral, that is now in danger.
Private schools have been hit hard by the lousy economy. Even though they are educational institutions, they run as businesses that rely on income instead of public funding. The main source of income for most private schools is tuition.
“In our association, that accounts typically for as much as 85 to 90 percent of the annual budget each year,” explained Jim McManus, executive director of the California Association of Independent Schools.
According to McManus, the case of Windrush School isn’t as unusual as one might think. Up until about 2007, the outlook for private schools was generally considered rosy and optimistic, with many thinking they could improve by expanding. Then, the economy tanked.
“And so the school has the mortgage payment, essentially, but without the income expected to cover that payment even though for many years before that, that had been a typical and successful strategy for other independent schools,” he said.
The future for the state’s private schools is hard to predict. Some have figured out how to market themselves successfully. In other cases, where families are moving to more affordable areas, private schools may be left in the dust.
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