I just read a story in a UK paper about private schools sending parents to debt-collectors for unpaid fees. I can 't find anything about this in the US so I don't know if it is happening here. Predictably several commentators are clutching their pearls but I must say that in general, I agree with the schools.
What I mean by "in general" is that a case-by-case approach should be taken. Some parents may be genuinely distressed, some may need only a temporary respite and some will be trying to take advantage of the situation. I faced exactly this situation during the GFC of 2008 - 2012.
I was director of a newish PK - G5 independent school and at that time, we had no source of income other than fees. Fundraising brought in little because the school was new, and because people donate to colleges first and high schools second with elementary schools barely featuring.
Each student represented a piece of a salary or a utilities payment or books and materials, and as a result, enrollment management and cashflow management were essential to survival. Most people do not realize that 90% or higher of a school's expenditures are fixed, facilites and staff, so there is little room to move and little than can be cut from the budget if planned income does not materialize.
With the GFC, many parents lost jobs and income but none expressed a desire to withdraw their child(ren) so we were faced with largely the same size but less income. We also wanted to recognize their loyalty in choosing us a new school, and to keep them as families for when the situation improved. Remember - retaining an existing client is significantly cheaper than recruiting a new one.
So I was forced into assessing which families had genuine needs, which could still pay something and which were fake needs. We worked with the first two groups, launched a "scholarship" program which was really a discount, launched a payment plan program, and in some cases traded services for tuition credits. Cashflow management became a large part of my day and I negotiated with several suppliers to pay only as funds came in so that I could still meet payroll.
However, there were very disappointingly a few parents who tried to take advantage. I remember one couple with two new and very expensive high-end automobiles and the father told me he could not pay our fees because he had to pay for the cars. I remember another parent who could not pay fees because he would not cancel a family vacation in the other side of the continent. I remember another who just stopped paying, but as they were a military family I knew their situation had not changed.
This is the group I would not have trouble with sending to collections. These are people who can afford to pay but are choosing not to and are not concerned about the effect on the school, its finances and its staff and students.
We did in fact send two families to small claims court, neither from the group above. One was a parent who decided from one day to the next that she wanted to put her son in a public school and did not discuss it with us beforehand; she only told us when we called because he was absent. We turned away another family when we accepted her, who by that time were established in another school and did not want to change.
The other was a family which moved state and again did not speak with us, and since the move involved jobs, houses and movers this was clearly intentional. The father paid in full by check when he found out we were serious and the effect that a judgment would have on his credit history. Obviously this was not an "ability to pay" situation.
I have heard people claim that schools should not enforce their side of the contract and that it is bad for the school's image and reputation, or even that it is not educational. I disagree with both positions; a school is a business and a service provider like any other and in the same way, needs its clients to pay their bills.
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