On the Subject of Private School Debt

Parents these days are facing pressure to put their children into private education. With school fees, on average, more than £5,700 a term according to the Independent Schools Council's (ISC) latest annual census, published on April 2018, some parents struggle to make the payments. There are many reasons for this, circumstances change, unemployment, and couples get divorced, which all leads to an inability to pay the children's school fees.

One of the most common issues facing a school is a parent or guardian, not giving the right 'terms of notice', having found an alternative placement in a state school. The truth is; unfortunately, this problem cannot be prevented, and therefore the school will always face some commercial risk, the answer is to act expediently and refer the matter to a third party for collection to minimise the school's exposure.

School Fee debt is considered to be a 'sensitive debt' which means that it always comes with a lot of emotions and the opportunity for negative publicity. Many parents perceive the schools, not as a business that needs to make money, but as a service to their child's education.

When it comes to the matter of hardships, most parents seem unaware that in the contract they signed with the school that both parents are jointly and severally liable for the payment of fees whatever their circumstances or financial agreement they have mutually in place.

Private schools have to be financially sound for the benefit of the majority of pupils under their care and have the same type of issues as the care home industry when it comes to recovering unpaid fees. Schools must recognise this and adjust their business practices to have debt collection policies that are sensitive to the welfare of the children involved as well as the needs of the school as a whole.

All private schools must have terms and conditions that include a late payment clause, which should consist of late payment interest together with being liable for all third party collection costs. The fact that the parent is in default of payment should not mean that the school has to pick up the bill and warrants recovering all costs. The parents are also liable for all costs, fees, disbursements and charges, including legal fees and costs, should this be necessary.

At some point in every bursar's career, there will be a need to use a debt collection service. A good debt collection company will comply with the pre-litigation protocol and general debt collection compliance to do this they will need a copy of any outstanding invoice, statement of account, terms and conditions, signed the acceptance form and any relevant correspondence.

During the registration process, the administration must have an Anti Money Laundering procedure; this must include a photo ID, either passport or driving licence, together with a utility bill or bank statement from the last three months. It may also be advisable to perform Due Diligence on the parents to confirm whether they live at that address, or have any County Court Judgments.

I want to finish this blog by talking about the classic bursar's dilemma over their clients and customers.

This dilemma possibly the most challenging debt collection problem to solve and the question is when do you act and how? On the one hand, you have the excellent customer who is your incredibly gifted straight a student, who is adored by everyone and on the other hand, you have the errant client who is the parent or guardian always giving excuses for non-payment. As we mentioned in the opening paragraph, this could be due to many different factors such as unemployment, divorce or other personal circumstances. The question is, what do you do and how do you handle it?

The answers to all your debt collection questions are in our free presentation, anywhere in the UK, which you can book by calling Town and Country Legal Services LLP on 01883 212121