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	Collection Agency's Bankruptcy Leaves 5 N.J. Catholic Schools $1.1m Short By Kristen Alloway The Star-Ledger January 26, 2009 http://www.nj.com/business/index.ssf/2009/01/collection_agencys_bankruptcy.html Five Catholic schools in New Jersey are scrambling to make up $1.1 million in missing payments after the agency that collects their tuition filed a bankruptcy petition earlier this month. Tuition Program Inc. (TPI) filed a bankruptcy petition Jan. 12 claiming that it owed $3.6 million to 14 Catholic schools — including three schools in Morris, one in Somerset and one in Middlesex counties — and $867,000 to Wachovia, according to the document. The Livingston-based company had assets between $500,000 to $1 million, according to the filing. The schools affected in New Jersey include Our Lady of Magnificat in Kinnelon, Holy Family Academy in Bound Brook, and Sacred Heart schools in Dover, Rockaway and South Plainfield. The remaining schools are in New York and one is in Texas, according to the petition. "I have to find $300,000," said the Rev. John Carroll, pastor of Our Lady of Magnificat in Kinnelon. "We're not sure what we're going to do, whether we borrow it from the diocese or borrow it from the cemetery or borrow it from our savings. It's going to be a hardship." The bankruptcy comes at a difficult time for many Catholic schools that have been struggling to stay open in recent years while dealing with declining enrollments. Carroll said the number of students at Our Lady of Magnificat, which serves grades pre-K through eight, has declined since 2000, when it hit a peak of 257 students. Enrollment is 172 students, and the recession may further erode it, Carroll said. "That's why this is coming at a terrible time," he said. Our Lady of Magnificat School used TPI for 10 years to collect tuition payments from parents and never had any problems, Carroll said. In fact, collection rates climbed from 75 to 80 percent when the school handled it on its own, to 98 percent with TPI, he said. Parents paid the company directly, and TPI sent the school a check each month, minus an agency fee, Carroll said. "Everything was fine up until the beginning of January when that check didn't show up," Carroll said. An email from TPI explaining the bankruptcy soon followed, he said. The school has stopped using TPI and will collect its own tuition, he added. Calls to TPI and its attorney listed on the bankruptcy petition were not immediately returned. A spokesperson for the Diocese of Metuchen, which includes the schools in Bound Brook and South Plainfield, said the diocese has loaned the schools money to cover the loss. "Obviously, news of the bankruptcy was a terrible blow to our schools, especially since they are committed to good stewardship," the diocese said in a statement. "The schools will continue to provide a Catholic education for their students. This matter is now in the hands of diocesan attorneys and so we will not comment further at this time." The Diocese of Paterson, which includes Morris, Passaic and Sussex counties, had three schools affected. Our Lady of the Magnificat in Kinnelon had $300,000 in payments due; Sacred Heart in Rockaway had $270,00 due and Sacred Heart in Dover had $55,000 due, according to the diocese. Sacred Heart in Dover is expected to close at the end of the year. Its principal declined to comment today, according to a person who answered the phone at the school. "This is a highly unfortunate situation for these schools," the Diocese of Paterson said in a statement issued through its communications office. "We will do all we can to help the schools in recovering the tuition funds due to them." Sister Marie DiLorenzo, principal at Sacred Heart School in Rockaway, said she was not worried about the shortfall. "The diocese is lending us some money and we're grateful," she said. "We have to pay it back. We will." She said the school might hold fundraisers or use part of its annual tuition hike of about $10 a month to help pay back the diocese. According to its website, TPI was started in 1985 by Catholic parents to help schools streamline their tuition collections. DiLorenzo said she was "shocked" to learn of TPI's bankruptcy petition. "We've done business with them for over 18 years," she said. "I don't know what happened."
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