By Gary Stern and Randi Weiner
The Journal News
January 28 2009
http://www.lohud.com/article/2008901280349
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| Eighth-graders from Sacred Heart School in Suffern pray at a Mass. The school is out $484,039 after the company that collects its tuition went bankrupt. |
At a time when Catholic education is struggling financially, the bankruptcy of a New Jersey company that collects private school tuition has left eight New York Catholic schools in a $2.1 million hole.
Three of the schools are in Rockland County and two in Westchester.
But the Archdiocese of New York has promised to cover the losses.
"Parents at these schools should know that they will not be asked to pay tuition again," said Joseph Zwilling, spokesman for the archdiocese.
Tuition Program Inc., based in Livingston, N.J., has collected tuition for private schools since 1985. But the company was not properly bonded and insured and apparently lost investments when the stock market crashed, Zwilling said.
The company did not return a call for comment.
Zwilling said it was unclear how much of the tuition money might be recovered through bankruptcy proceedings.
According to bankruptcy papers signed Jan. 12 by Brendon Devlin, listed as chief executive officer, the company owes $3.6 million to eight schools in the Archdiocese of New York, five schools in New Jersey and one in Texas. The company also owes $867,000 to Wachovia Bank.
The two schools that are owed the most are Sacred Heart School in Suffern, which is out $484,039, and St. Margaret Antioch School in Pearl River, which could lose $455,970. Also in Rockland, a pre-kindergarten program at St. Catharine's parish in Blauvelt is owed $162,891.
In Westchester, St. Anthony of Padua School in West Harrison is out $136,209 and Our Lady of Victory School in Mount Vernon, which stopped using Tuition Program Inc. at some point, is owed $70,642.
"It's not happy news," said Carolyn Slattery, principal of St. Margaret Antioch School. "It happened to a few of us. Right now, the archdiocese is working on it with their legal and financial departments."
According to the company's Web site, Tuition Program Inc. was started by Catholic parents as a way to streamline the tuition-collection system for parishes.
The Web site promises to correct cash-flow problems that often plague private schools.
Other companies offer similar services to private schools.
Zwilling said the archdiocese plans to review other companies in the business to make sure they are properly bonded and insured.
"We're working on a plan to avoid having anything like this happen again," he said.
Tuition Program Inc. appears to be operating; an employee answered the company phone yesterday and asked for the caller's account number.
Monsignor Joseph R. Giandurco, pastor of Sacred Heart Church and president of the parish school, said Sacred Heart had contracted with Tuition Program Inc. for 22 years, adding that the company had never missed a payment until January.
"That's why it was such a surprise for this school and for everyone, really," he said.
Giandurco met with parents and assured them that the school would continue to run normally.
"I would say they were relieved," he said. "I think some people are still worried when they hear bankruptcy and things like that. They fear the worst. With the parish's help and the archdiocese's help, I feel there will be no disruption. Unfortunately, I guess, it's a product of the bad economy and other things."
Tuition Program Inc. assures schools that 100 percent of the tuition money it collects will go to the schools.
But the company begins collecting money months before making payments to the schools, giving it the opportunity to invest its holdings.
The company also charges fees to participating schools and late fees to parents who are tardy with their tuition payments.
The past few years have been challenging ones for Catholic education, as many dioceses and schools have struggled to cover their costs. The archdiocese has closed about 50 schools since 1990, and this month the Diocese of Brooklyn proposed closing 11 schools at the end of the school year.
Reach Gary Stern at gstern@lohud.com or 914-694-3513.
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