Mr James Dalziel is Head of School at NIST, one of Thailand’s most well known international schools. In an hour-long interview over Zoom with TIS Monitor, he talks frankly about the challenges facing the school during the ongoing COVID-19 pandemic, the pressure from the board to cut costs and why educating a student at NIST is more expensive than at many other great international schools in Thailand.
Also taking part in the interview is Mr Jared Kuruzovich, the school’s Director of Communications.
This is the first part of the interview, and it is focusing on NIST. In the second part, published here, the focus is on international education in Thailand and issues relating to this sector.
TIS Monitor: You are quite new in Bangkok. When did you arrive here to take up this position at NIST?
James Dalziel: I arrived in July, did the ASQ (quarantine) in a hotel and then stepped in and joined NIST at the first day of school. It has been an interesting first year.
TIS Monitor: So you are still learning on the job?
James Dalziel: I am expecting to be for some time, the way things are going. But I was 20 years in Singapore, so I am new to Thailand but not necessarily new to Asia and certainly not new to international education.
TIS Monitor: In Singapore, were you working with a not-for-profit school or a for-profit school?
James Dalziel: I was at a not-for-profit school, United World College. Prior to that, when we arrived in Singapore in 1999, I was working for a for-profit school. Before NIST, I was working for the largest for-profit, family-owned educational group in the world, GEMS Education. So I have absolutely seen both ends of the spectrum.
TIS Monitor: Schools in Thailand have been ordered by the Ministry of Education to turn to online learning. Is NIST currently offering any discounts or refunds on the tuition fee with regard to this?
James Dalziel: That is a good question and it is a question that is on everybody’s mind. Where there are direct savings, for things like a food program, transportation, and direct bookings for activities with music teachers, for example, parents have received those direct refunds. That is easy to calculate and also what the government has mandated, which is a completely reasonable mandate.
The other bracket is the tuition. The answer to your question is: ”We are not sure yet”. We are actually meeting today (May 27). We are having a financial committee meeting with the board to have a conversation about if we, as a not-for-profit school, should return money and resources that aren’t used.
The difficulty, and I will be speaking very frankly, is monetizing the savings from going online. Are we saving money on electricity? Yes, a little bit. Water? Yes. Are we saving money with our cleaners, as they don’t need to clean every classroom every day? Here the answer is ”No”. We have decided to not lay anyone off until we absolutely have to. We feel that we have a strong social responsibility to our whole community, including our staff. We don’t want to, at the first opportunity, try to save money and just tell them ”Now you’re unemployed”. Our parents have been very positive and perceived that very well, but at the same time asking us for discounts.
Our teaching staff, our staffing costs, like at almost any school, represent about 80% of our costs. We can find some savings on things like electricity and water, but it’s not much. So I absolutely understand that, from a parent perspective, there may be a perception that they are not receiving the provision that they signed up for, which they are not, but we don’t have any alternative. So, we are doing the best we can. Any significant real savings would be coming from staffing, and we haven’t cut our staffing.
We gave a discount last year, but it wasn’t necessarily calculated based only on the direct savings that we had.
TIS Monitor: And how big was it last year?
James Dalziel: It was 20,000 baht per student.
Jared Kuruzovich: Our case is slightly different from a lot of other schools in terms of the decision-making process. We would defer to the board on this, so for tuition setting and for discounts, it is a board decision, made based on the recommendation of our Chief Financial Officer and Board Finance Committee. In our case, our board is our parents. The parents are essentially self governing in terms of electing the board, and then the board would be deciding whether or not refunds or discounts of any sort will be offered.
TIS Monitor: But when you enroll your child, you expect to get onsite campus learning, pay a certain tuition fee for that, and now you don’t get it. There is a consumer protection perspective here. What would you like to tell those parents?
James Dalziel: If I could provide it to you, I absolutely would, but I am not allowed to open the campus. So I will provide you with the next best thing that we can come up with to preserve the learning. This is about the learning. Unfortunately, that option doesn’t cost less. I completely understand that as a consumer, ”I am not getting what I signed up for”, but it is a result of the campus being closed. The next best alternative is online learning, and online learning costs as much. We are still paying the lease of the campus and salaries, so I think, interestingly for me, most parents understand that. But it is still exactly as you described it, ”I am a customer and I am not getting what I signed up for.”
TIS Monitor: Roughly, how many parents have been angry and demanded a refund?
James Dalziel: I have had a handful of emails that have been directly asking about refunds. I wouldn’t say anyone has been mad; at least it didn’t come across in the email that they were angry at all. But people certainly are saying, “This is not what I signed up for, so what is the school going to do?”. And that is a very valid question. I can’t argue with you, and we are discussing it. But we hope that parents do understand that we are a not-for-profit that needs to be financially responsible.
TIS Monitor: NIST has roughly 1700 students. How many of those have parents who don’t pay the fees themselves, but have an employer who is paying the fees?
Jared Kuruzovich: If I remember the figures correctly. It is around 65% to 35%, or 60% to 40%, in terms of the majority being parents who either have the tuition covered in whole or in part by their companies, and the remainder, 35% to 40%, pay on their own.
Last year we did have more questions of concern about online learning and the quality. We made adjustments, and this year it seems to be minimal in terms of number of parents rising those similar concerns, as we make an effort to continually get feedback to drive changes.
TIS Monitor: Do you think that can be explained by the fact that you have roughly 60% of parents who don’t pay the full fees? So they don’t really care that much, had they been paying the fees themselves?
James Dalziel: I wouldn’t pretend to speak on behalf of understanding parents, but you can see how that would be a logical connection. However, some could also argue that they believe they will get a high quality education.
TIS Monitor: You are a not-for-profit school. Last year some of the for-profit schools gave quite large discounts during the COVID-19 closure, around 20%. Does that mean that, if something disruptive happens, it is better to enroll your child in a for-profit school, because there will be a buffer that can be used if something like this happens, as opposed to at NIST where you don’t have a profit?
James Dalziel: You have hit on one of the advantages of being part of a larger family of schools. You can capitalize on that scale. There are a lot of advantages of being part of a larger family. As a not-for-profit school, sitting as a single entity, we can’t call on our family. So, there is no economy of scale with one.
I do know that a lot of those schools gave refunds because they were interested in keeping their parents. It was more of a gesture of good will, not necessarily a reflection of savings that was being passed on to parents.
When we do generate a surplus within the school, that money, 100%, gets reinvested back in to the school. This year we didn’t travel as much with our sports teams. That entire budget just got carried over and will be used for onsite capital items to improve our facilities.
Hand on heart, it’s not going somewhere else. If we made savings somewhere, your child is going to benefit from that in their program immediately somewhere else.
TIS Monitor: When you have so many parents who don’t need to pay the fees themselves, would that allow for NIST to slip in overall quality, because those who pay, meaning the employers, don’t really know about the quality, and those who do know, meaning the parents and the students, don’t really care because they don’t pay?
James Dalziel: That is a really good question and my answer would be: ”Absolutely not”. Parents underestimate the fact that they are the customer and they ultimately have a choice.
Additionally, there are many good options. You can make a choice, maybe not month by month, but certainly year by year. You can shift your child to another good international school, and we can do nothing about that. The only thing we can do to keep you here is to provide you with the best quality education possible. For-profit or not, we are under tremendous pressure to perform, because ultimately our customers have choices and they can make them. They only need a difficult conversation with their children telling them that they will be moved away from their friends. But ultimately, that is the only residual friction that is in the system.
TIS Monitor: According to our collected data, the average cost per year at NIST is 816,000 baht. Let’s compare that to some other big schools in Bangkok. At St Andrews Sukhumvit 71 the cost is 624,000 baht, and at Bangkok Prep it is 616,000 baht. Those schools are about 200,000 baht cheaper per year and still very good schools that produce good students. What is it that they do better, or differently, to be able to produce good students at a lower cost?
James Dalziel: 80% of the cost is staffing. We have excellent teachers and we know that costs money. We have a robust language program. We offer more languages than most other schools. It is expensive, which adds to the cost. And we offer a very rich learning program in terms of student support services.
As a head of school, I have to remind people that we have a purpose. From the purpose we develop a program. And then we decide: ”What do we need to do in order to achieve that program?”. Our purpose is not to have the cheapest program on the block. It’s efficient and it’s cost effective, because we need to be responsible to our customers, but ultimately the question is: ”What do we need to invest in to allow us to achieve our purpose? Does it cost money? Yes.”
Trust me, I get pressure from the board all the time to cut costs while still maintaining quality, which I should be getting; that is their job. But we want to work together to invest in these ways to achieve this purpose.
TIS Monitor: When you enroll a child in NIST, I assume you sign a contract. Is the fee stipulated in the contract? If you enroll your child in year 1, would you know the fee in year 12?
James Dalziel: No, because we re-set the fees every year based on inflation. So, no, it’s a floating fee. We don’t say: ”Here is the fee schedule for the next 12 years guaranteed”. But we would say: ”Here are the current fees in year 12,” and we reserve the right to increase or decrease them based on inflation, program savings whatever that might be.
Jared Kuruzovich: It is the board that ultimately decides the fee increase. So as parents, they are very much conscious that they need to keep it reasonable. I have seen some for-profit schools that will raise fees 6%, 7% and on occasion 10% in a single year. At NIST, the most I have seen historically is maybe 5.5%, and it tends to be lower than that. We try, together with our CFO, to create a long-term strategy so that we can try to keep fee increases minimal within a very predictable range.
James Dalziel: I have been working in both systems (not-for-profit and for-profit). When I was Director of Operations in Europe for GEMS, we would begin our tuition conversation for different schools across the continent with saying: ”Ok, we want our profit margin to be X, so, as we have this number of kids. The cost of the programs will be Y, so therefore we need to charge Z”. That is how the conversation went. In not-for-profit schools, and this is how it works at NIST, we say: ”Ok, we want to achieve these things within the programs. That is going to cost X. Where might the tuition, donations and other things need to shift in order to match that?” It’s never that we need to increase the fees with 20%. There is always a real sense of continuity of our programs.
We just entered into an almost 2 billion baht building program over the next six years. Our tuition fees only went up by an average of 1.5%, which reflects inflation and some other costs. We didn’t say: ”We are going to build that 2 billion baht facility”, because tuition fees would have jumped exorbitantly. That is not the conversation at all in a not-for-profit school. We have had a different conversation, which I frankly prefer to have.
TIS Monitor: On NIST’s website, you show results like test scores for students, and it looks really good. It seems like you are performing well at NIST. But research has demonstrated that school factors explain only 20% of achievement scores, and schools with more affluent student bodies tend to produce high test scores. My question to you is: Does NIST get good test scores because the school is good or because the parents are wealthy?
James Dalziel: Well, I can’t argue with the research and the data, so I would acknowledge that completely. But the school plays a role in those test scores, so we have an obligation to provide the best education possible. If it is 90% or 20% I don’t know. I think we can probably go through every individual child as a case study and come up with something like: ”Well, this child had additional tuition, or that child genetically is incredibly bright,” but I can’t factor that in. My job, and our job, is to ensure that the minute they step in on campus they are going to get the best education that we can provide. That is all we can do. But you are right. I can’t deny the fact that affluent families tend to get better results. Parents who read with their children at an early age tend to get better results. Parents who are more involved in their child’s education in a positive way and promote the school tend to get better results. All those things are true.
It’s also important to note that as a school we are not solely aiming to produce good test scores. We want to send certain kinds of people into the world who will be able to function in diverse communities, adapt to changing circumstances and ultimately have a positive impact on others. Test scores represent a much narrower view of academic success for us. Though we value them as one measure, they are one of many.
End of part 1. Part 2 of the interview with Mr James Dalziel, Head of School at NIST, will be published shortly, and will focus more on international schools in Thailand and how this sector is growing.
