Should Schools Charge Less for Now?

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Donnybrook
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Re: Should Schools Charge Less for Now?

Post by Donnybrook » Tue Apr 07, 2020 11:29 am

fraggle092 wrote:
Mon Apr 06, 2020 12:27 pm
41southchile wrote:
Mon Apr 06, 2020 8:43 am
Of course they should be charging less, their fixed heating costs (which are not insignificant) here in the South have completely disappeared has have electricity costs, etc.
I would guess that their biggest outgoings are personnel, who will still be getting paid.
Most schools spend at least 70% of their budget on salaries. If the schools are still paying salaries, thinking of private schools here, they don't have much room to economise. Certain costs will go down: electricity, water, heating, but the bulk of the budget is still being spent. I have no idea about the legal aspects of lowering salaries or furloughing or anything else which might give schools an opportunity to lower fees for parents.I imagine that schools will be looking at what the future might hold and what their position might be but as long as they are paying money out they have to get that money in. As for value for money, you aren't really buying something you are paying for something. The good schools believe they have a contract with the child and not the parent. But it will boil down to costs eventually and it might be best to hang on and see where we are in a couple of months.

scandinavian
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Re: Should Schools Charge Less for Now?

Post by scandinavian » Tue Apr 07, 2020 11:47 am

I agree with salaries being the main cost for the schools, but I am also certain that the vast majority of private schools are operating with very impressive profit margins. I am not suggesting that the schools should lower the teacher salaries, but accept that their profit this year will not be as it usually is.
In terms of public schools, then I think a major issue is that many pupils don't have the tools (internet, pc) nor support (ie supportive parents) to have a purposeful remote learning experience. Thus the need to bring the winter vacation forward.

Donnybrook
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Re: Should Schools Charge Less for Now?

Post by Donnybrook » Tue Apr 07, 2020 2:00 pm

scandinavian wrote:
Tue Apr 07, 2020 11:47 am
I agree with salaries being the main cost for the schools, but I am also certain that the vast majority of private schools are operating with very impressive profit margins. I am not suggesting that the schools should lower the teacher salaries, but accept that their profit this year will not be as it usually is.
In terms of public schools, then I think a major issue is that many pupils don't have the tools (internet, pc) nor support (ie supportive parents) to have a purposeful remote learning experience. Thus the need to bring the winter vacation forward.
There are a variety of ways private schools are set up here. If the school has an owner, or owners, they may be taking out a profit but most of the really expensive private schools are set up in a different way. Much goes back into the school in terms of equipment: computers, libraries, labs. Other money is set aside to grow for unseen eventualities - this will be one. Many support at least one other school in a less advantaged area. Aside from salaries, no one benefits directly from the fees. But they will be able to cut back on spending for equipment and dip into rainy day money. Undeniably they are in a better place than schools with few if any resources. It isn't a level playing field and never has been.

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41southchile
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Re: Should Schools Charge Less for Now?

Post by 41southchile » Tue Apr 07, 2020 2:22 pm

Donnybrook wrote:
Tue Apr 07, 2020 11:29 am
fraggle092 wrote:
Mon Apr 06, 2020 12:27 pm
41southchile wrote:
Mon Apr 06, 2020 8:43 am
Of course they should be charging less, their fixed heating costs (which are not insignificant) here in the South have completely disappeared has have electricity costs, etc.
I would guess that their biggest outgoings are personnel, who will still be getting paid.
Most schools spend at least 70% of their budget on salaries. If the schools are still paying salaries, thinking of private schools here, they don't have much room to economise. Certain costs will go down: electricity, water, heating, but the bulk of the budget is still being spent. I have no idea about the legal aspects of lowering salaries or furloughing or anything else which might give schools an opportunity to lower fees for parents.I imagine that schools will be looking at what the future might hold and what their position might be but as long as they are paying money out they have to get that money in. As for value for money, you aren't really buying something you are paying for something. The good schools believe they have a contract with the child and not the parent. But it will boil down to costs eventually and it might be best to hang on and see where we are in a couple of months.
Yeah I guess, it's been an eye opener though, I think after this comes disruption and change of the Chilean education model, which needs it.
“Facts do not cease to exist because they are ignored.”

Britkid
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Re: Should Schools Charge Less for Now?

Post by Britkid » Tue Apr 07, 2020 3:27 pm

Thanks everyone for all your comments. Donnybrook, do you have an idea, just as a rough ballpark figure, what you think the current gross salary is for a teacher in a private school in Santiago. Not talking about the absolute top schools like Grange and Santiago College, but say one level down from there, so Dunalastair, SEK, Lincoln etc. Our kids school, Trebulco, is around that level. In such a school what do you think is the average salary for a teacher (so excluding teacher's assistants, excluding purely managerial teachers that rarely or never give classes, excluding support staff).

I guess if the answer is 1.4 million/1.1 million I'd be inclined to think teachers should take a 20%/10% pay reduction while there are no in-person classes (assuming a lot of remote classes and home working is getting done) and push harder for a reduction in costs; if the answer is 650.000 I'd be inclined to request a fee cut but stipulate that I don't want any of it to come from teacher's salaries...

scandinavian
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Re: Should Schools Charge Less for Now?

Post by scandinavian » Tue Apr 07, 2020 3:58 pm

41southchile wrote:
Tue Apr 07, 2020 2:22 pm

Yeah I guess, it's been an eye opener though, I think after this comes disruption and change of the Chilean education model, which needs it.
Completely agree. The private school system has a complete lack of transparency in Chile. My kids school is owned by 2 private individuals - they do not subsidize any schools in other areas nor publicly commit to any charity. Based on back of napkin calculations, then the yearly profit is huge (millions USD). And it is every year, with hardly any risk. Due to the lack of transparency, most only have a reduced idea of the school their children attend to and even less idea of other schools. Just try to figure out ownership structure, salary levels, profits etc. There is no public information at all - I have no problem with the private schools turning a profit, but I think it is only fair if there is transparency. is the profit margin 5%, 10%, 20% or 50%?

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fraggle092
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Re: Should Schools Charge Less for Now?

Post by fraggle092 » Tue Apr 07, 2020 11:18 pm

scandinavian wrote:
Tue Apr 07, 2020 3:58 pm
is the profit margin 5%, 10%, 20% or 50%?
Whatever it is, they still have to fork out taxes on it. At 27%.
Some schools may be paying rent on their buildings, others may be repaying property loans.
Haven't seen any sort of moratorium on those kind of payments, everyone wants their money.

Same goes for individual workers, Chileans live indebted to the hilt, so asking them to take a pay cut could cause big problems. Adiós departamento.
Bienvenidos a Chaqueteo City.

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41southchile
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Re: Should Schools Charge Less for Now?

Post by 41southchile » Wed Apr 08, 2020 10:00 am

fraggle092 wrote:
Tue Apr 07, 2020 11:18 pm
scandinavian wrote:
Tue Apr 07, 2020 3:58 pm
is the profit margin 5%, 10%, 20% or 50%?
Whatever it is, they still have to fork out taxes on it. At 27%.
Some schools may be paying rent on their buildings, others may be repaying property loans.
Haven't seen any sort of moratorium on those kind of payments, everyone wants their money.

Same goes for individual workers, Chileans live indebted to the hilt, so asking them to take a pay cut could cause big problems. Adiós departamento.
Most banks are offering 3 or 6 month mortgage payment holidays to customers that are up to date on payments, at zero percent interest to be repaid at the end of the loan.
Heard of two two people yesterday that are having to take pay cuts if they want to have a job, one in tourism and one in Salmon industry.
“Facts do not cease to exist because they are ignored.”

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tiagoabner
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Re: Should Schools Charge Less for Now?

Post by tiagoabner » Wed Apr 08, 2020 10:13 am

Education prices have increased by 3.5% in March. Source: https://www.t13.cl/noticia/negocios/ipc ... ores-alzas

The article lists universities and "professional courses" as the main culprits, but I wouldn't hold my breath on basic education prices getting lower anytime soon.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

Donnybrook
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Re: Should Schools Charge Less for Now?

Post by Donnybrook » Wed Apr 08, 2020 11:41 am

Britkid wrote:
Tue Apr 07, 2020 3:27 pm
I guess if the answer is 1.4 million/1.1 million I'd be inclined to think teachers should take a 20%/10% pay reduction while there are no in-person classes (assuming a lot of remote classes and home working is getting done) and push harder for a reduction in costs; if the answer is 650.000 I'd be inclined to request a fee cut but stipulate that I don't want any of it to come from teacher's salaries...
No idea because my personal experience was in the top tier. In those the salary was based on various factors: further degrees, years of experience etc. But even there a salary of 1.4 million would have been unusual. But it was a few years ago so I don't even know that. I did run 2 courses in one of the other schools you mention one January. The school demanded that teachers come in to do courses, mostly run by other teachers, rather than take January off. The school wanted to get its money's worth. Teachers not on full contract got 10 months salary not 12. The treatment of teachers and their salaries were an eye opener to me. So individual schools vary tremendously regarding salaries, atmosphere etc.

Britkid
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Re: Should Schools Charge Less for Now?

Post by Britkid » Wed Apr 08, 2020 6:34 pm

Donnybrook wrote:
Wed Apr 08, 2020 11:41 am
Britkid wrote:
Tue Apr 07, 2020 3:27 pm
I guess if the answer is 1.4 million/1.1 million I'd be inclined to think teachers should take a 20%/10% pay reduction while there are no in-person classes (assuming a lot of remote classes and home working is getting done) and push harder for a reduction in costs; if the answer is 650.000 I'd be inclined to request a fee cut but stipulate that I don't want any of it to come from teacher's salaries...
my personal experience was in the top tier. In those the salary was based on various factors: further degrees, years of experience etc. But even there a salary of 1.4 million would have been unusual. But it was a few years ago so I don't even know that.
So you think 1.4 million would have been unusually high even for somewhere like the Grange/Santiago College, say? That most or all teachers at the Grange would have earned less than this - at least a few years back? Do I understand right?

Britkid
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Re: Should Schools Charge Less for Now?

Post by Britkid » Wed Apr 08, 2020 6:48 pm

https://cursando.cl/pedagogia/cuanto-ga ... edagogias/ salaries 500 - 800.

So all in all I'm inclined to think that at a good private school like the ones my kids attend the salaries are probably 700.000 - 1.2 million gross. I doubt they are 550.000 because they don't seem to have totally inexperienced teachers. None of them look they are just out of school, and they all seem to do OKish at handing a room of demanding parents. I doubt any of them earn 1.4 million, because that doesn't fit with the information I can google, or what you would just expect from Chile as a right wing country at a certain level of development and economy.

Probably seems a bit unfair to ask teachers to take a pay cut, as long as they are working hard from home. Maybe defer pay rises.

I think I might ask the school to reduce the fees by 20%, and see what they say (will perhaps join the group of parents organizing something similar). The 20% could cut from the profits and the reduced costs of heating, electricity, and so on. And perhaps a contribution from the salaries of management earning >> 1 million.

I"m a bit skeptical of the back of the envelope calculation to determine profit margin. There are so many factors here, including tax rate, is the land paid off or under mortgage, and there could be unexpected costs. Also, how much do they spend on unexpected lawsuits, paying staff who leave. How many of the parents leave with unpaid debts that are not recoverable without spending as much money as the debt? There are just too many variables I think to be able to say whether a profit margin is 10% or 50%.

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