Increasingly, bursars across the UK are wasting valuable time chasing up unpaid school fees. Helen Brown, partner and head of dispute resolution at Slater Heelis Solicitors, offers some legal and practical advice
A school may be ‘outstanding’ in the eyes of the Independent Schools Inspectorate, however, if there isn’t a consistent cash flow of fee income it can have a major effect on funding school improvements and clearing the wage bill. The following are some practical tips to ensure that bursars not only make it easy for parents to meet their payment requirements but are legally essential.
Terms and conditions
A school enters into a legally binding contract with the parents of each pupil. In return for providing education and welfare facilities, parents will pay the school an agreed fee per term or on an annual basis. Although a contract can be entered into by actions or words, a written contract is always preferable.
Whilst the contract doesn’t need to be pages and pages of small print, it is advisable to cover the essentials such as:
- Who the parties to the contract are
- What fees are to be paid
- When fees are to be paid
- How fees are to be paid
- What happens if fees are not paid
- Procedures for disputing fees
Schools should always ensure that they get the full names and addresses, including email addresses and telephone numbers for each and every parent or guardian. All parties should individually sign the contract.
If there is more than one parent, it’s vital that both parents are equally responsible for payment and that their liability is ‘joint and several’, that is if one doesn’t pay, the other has to pay. It is always preferable to ask for small regular payment throughout the year rather than one lump sum. This not only helps a school’s cash flow and forecasting but also the parents’ household budgeting. Monthly would be ideal, but termly at the very least.
Payments should be required in advance of the term starting and should be paid within seven days of demand. After that, a school reserves the right (though not necessarily follow through) to charge interest at, say, three per cent over base rate on outstanding amounts, for example. Any missed payments should be chased promptly. It becomes harder to recover missed payments the longer they are left.
Method of payment
The best way to secure payment is to set up individual direct debit payments. This ensures a regular flow of payments without the need to request or chase payment. Another option is to provide the parents with a ready completed standing order form and offer to send it to their bank on their behalf once signed.
Credit cards are a good way to collect payment and even better if a school has the capacity to set up a secure link to its website enabling parents to simply log in and pay. On the other hand, cheques are to be avoided. They delay receipt of funds, necessitating a trip to the bank, and can be stopped, or bounce.
Bursars should be aware of payments coming from unknown third parties such as limited companies or businesses. If this happens over a prolonged period of time it may affect a schools ability to legally pursue the parents. It is always better to have an individual to sue rather than a limited company, which could fold and have no further obligation to pay.
Recovering debt is often regarded as dirty work and many bursars are afraid to chase missed payments. Some schools worry that it will affect the parent and school relationship if they chase fees. However, schools are businesses and are entitled to be paid.
A first approach can be a gentle reminder that the fee payer may have ‘over looked the payment’ followed by a stronger message advising that interest will be charged if the payment isn’t received. If a lack of payment persists, a final action should give reference to a debt collector or a solicitor being instructed to recover the outstanding balance.
Communication is key to avoiding large debts accruing. Schools should ensure regular dialogue with parents who are struggling, and set up payment plans where necessary. Engaging with an experienced debt recovery solicitor at the beginning of the process will ease the burden of recovering outstanding fees. A solicitor can advise on existing contracts and help to recover fees that are vital to the everyday functionality of a private school.
Fee collection does not need to be a taboo subject. It can be dealt with sensitively and professionally to enable a school to thrive.
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