Independent schools: negotiation can help when fees go unpaid

School fees are a major financial commitment that some parents understand more clearly than others – as many independent schools know to their cost.

At this time of year, with Christmas expenses looming, the number of people struggling to keep up fee payments tends to rise, in our experience.

But changes of circumstances – divorce, bereavement, redundancy – may all have an impact on family finances and they can come out of the blue at any time.

And when the purse-strings are tightening, school fees can suddenly start to look like a luxury rather than a necessity.

 

Fees in lieu of notice

If a parent can no longer afford to pay fees and decides to withdraw a child from school, one thing they often overlook is timing: they must let the school know a term in advance – or face a payment of fees in lieu of notice.

Which means if you decide at Christmas that your child will go to a different school in January, you are still liable for the new term’s fees at their old school.

And these costs can quickly mount up.

We recently had a case where a parent was facing a bill for more than £10,000 made up of unpaid fees, unpaid fees in lieu of notice, and interest – almost double the original fees bill.

For schools this is a drain on their income and on the time of their bursar or business manager who must write letters, make phone calls and deal with parents who are either stressed or avoiding communication altogether.

And schools also need to be mindful of the impact on the child.

Practical steps

There are several practical steps that independent school bursars and business managers can take to minimise the chances of unpaid fees becoming a problem:

They include:

  • Make it clear in school newsletters and on the website that if a parent withdraws their child during the year, they will be liable for at least the next term’s fees.
  • Check the standard letter that goes out to all parents explaining payments. Is there a clause allowing the school to charge for interest on late payments? Draw parents’ attention to it if they have not paid yet.
  • Don’t make exceptions to the rule – nothing annoys parents more than hearing in the playground that someone else is being treated differently when it comes to fees.
  • Don’t lose track of bills – we recently helped a school to recover around £3,000 in unpaid fees after the school forgot to chase up the parent whose child had completed their education but whose fees hadn’t been paid.

Generally, it’s worth keeping an eye on local news sites and newspapers. If you know parents at the school are employed in companies or organisations which are in the news because they may be moving, cutting back or closing, it should ring a few alarm bells.

If payments fail to materialise, parents will probably be invited into school but embarrassed or stressed people may not be terribly receptive to the idea of being called, like badly behaved pupils, to the head’s office!

Negotiation can ease the way

In these circumstances, a third party can help to negotiate a way forward. A pragmatic solution that’s acceptable to both sides is more likely when an independent voice with no axe to grind is involved.

We have often mediated between schools and parents where communication had broken down and where the next step would have been the county court.

We can sit down with both sides and agree a new payment schedule that works so that the child will be able the child to continue at the school, at least for that term.

In the case above, we recovered the £10,000 for the school relatively quickly – but the whole situation could have been avoided had the parties agreed to talk earlier.