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At Archdiocese of Chicago Catholic schools, enrollment grows – Crain’s Chicago Business

Greg Richmond, the new superintendent of Catholic Schools at the Archdiocese of Chicago, assumes his role under circumstances none of his recent predecessors were lucky enough to inherit.

Enrollment this fall increased for the first time in at least three decades, jumping by nearly 7% across 157 archdiocese-run schools after years of parish closures and consolidations aimed at balancing the books. The Catholic schools are also riding a wave of positive feedback after successfully offering in-person learning last year when many public districts prolonged remote experiences due to the pandemic—a decision that pushed some families to transfer into the private parochial system, one of the largest in the country serving nearly 50,000 students across Cook and Lake counties.

Now Richmond, 56, a former Chicago Public Schools administrator who spearheaded charter school development in the city before strengthening its expansion on the national stage, faces the tall task of building on this year’s growth. He’ll need to find new and creative sources of scholarship funding to support unmet demand for thousands of students who want to attend Catholic schools but can’t afford tuition. Stabilizing enrollment could potentially improve the institution’s credit rating, which was downgraded by Moody’s Investors Service in December to Ba1 junk status—its lowest point yet—with $170 million in outstanding debt. Over the last five years, the archdiocese has provided $107 million to struggling schools, according to the organization.

The economic challenges loom large. At least a dozen Catholic schools have closed since 2017 due to low enrollment and financial difficulties. With more dioceses nationwide seeking bankruptcy protections because of mounting litigation costs for sexual abuse allegations and COVID-19 shortfalls, whether or not the Chicago Archdiocese will follow suit remains an open question.

Richmond, however, prefers to focus on what he can more easily control—the quality of education offered by his schools.

Richmond laid out several avenues for increasing enrollment, which he said is one of his goals, and many mirror the fundamental principles of school choice that he’s built a career championing. One involves differentiating curricula among schools, so families have more options. That could entail standing up additional International Baccalaureate Programs at elementary schools—there’s just one so far—as well as offering specialized focuses like career technical training or performing arts akin to a magnet school model.

“Parents are looking for programs that fit the interests and needs of their kids,” Richmond said. “I think we’ve got to be positioned to respond to those interests.”

Another key area of improvement is affordability. In 2019, the average tuition at Catholic elementary schools was $4,903 per year and high schools charged $10,864—a 40% increase in the last decade that puts the option out of reach for many families.

Richmond said about 16,000 students applied for tuition assistance through the state’s Invest In Kids Scholarship Tax Credit Program, but there was only enough funding for 3,000 awards. The program, which provides a 75% income tax credit to individuals and businesses who make donations that are used as scholarships at private schools, is far from a permanent or reliable solution, though. It depends on legislative approval, is set to automatically expire in 2024, and only narrowly survived a revision in Gov. J.B. Pritzker’s budget proposal this summer that would have steered more of the money into public education. 

Richmond said he will ask lawmakers to renew the program and suggest other ways to strengthen it.

“Right now, it’s a 75% tax credit, which is terrific, and we appreciate it; but if it were a 100% tax credit, that would immediately increase our scholarships dollars available to kids,” he said. “That program isn’t just for Catholic schools … Families are better off, kids are better off, the state is better off if we have a healthy and diverse education system.”

Moody’s will also be tracking how enrollment fares. Though litigation risks and the pending Illinois attorney general investigation into clergy abuse are the most closely watched determinants, Moody’s also looks at schools to assess how much the archdiocese needs to spend assisting them.

In its most recent credit opinion in June, Moody’s held the Ba1 rating stable, noting that the archdiocese had a little more than $1 billion in cash and investments, a sound strategy for realigning financial resources under its “Renew My Church” initiative and lucrative real estate holdings that could generate more revenue if they’re sold off. It also said the schools were performing “better than expected” after enrollment took a hit in the early days of the pandemic.

“There’s been pressures on enrollment at private schools everywhere—parochial schools in particular—so if that continues and there’s an annual deficit at the schools, the Catholic Bishop of Chicago will step in and help,” said Michael Osborn, vice president and senior analyst at Moody’s. “Stronger revenue growth at schools takes less away from the Catholic Bishop of Chicago and they don’t have to give as much to the schools.”

Archdiocese officials say most of the schools aren’t profitable and that they’re underwritten by their parishes.

“We do not have revenue figures for schools as they are not revenue producers. Our schools are a ministry and many are supported from archdiocese and donor funds as they are not self-funded,” a spokeswoman said in an emailed statement. She said about 44% of schools receive archdiocese assistance to cover operations and 73% receive aid for scholarships.

Despite that support, most school budgets are sustained at the local level, said Sister Mary Paul McCaughey, who served as superintendent from 2008 to 2015. Dropping membership and collections have exacerbated financial challenges, making them more dependent on tuition revenue.

McCaughey, who now works training parochial school leaders at DePaul University, said she often offered principals this advice: “Get yourself in the black, because the Arch is not going to be able to help you.”

“The diocese is going to be supportive through scholarship funds and things like that, but they are not going to be able to subsidize because the parishes are no longer able to subsidize,” she said. “Even when I was superintendent, less than half of parishes gave anything to their Catholic schools.”

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