Private schools call in debt collectors to chase millions in unpaid fees

Economic climate leads to parents falling into arrears as heads talk of schools ‘clinging on by fingerips’ to stay open Private schools are turning to debt collectors to force parents to hand over millions of pounds owed in unpaid fees, it has emerged. The harsh economic climate has led to more parents defaulting – or falling into arrears – on their children’s school fees this year, the Independent Schools Bursars’ Association (ISBA) said. A growing number of private schools believe they are being left with little choice but to pursue parents’ unsettled payments through debt collection agencies. One agency, Daniels Silverman, expects to collect £9m from parents in arrears on school fees by the end of this year. Last year, it collected £5.8m. The number of private schools who have requested its help has risen to 74 from 48 a year ago. It has established a team of debt collectors to respond to the growing demand from schools. On average, the schools it works for are owed £120,000, it claims. Another agency, Sinclair Goldberg Price, would not state how many schools it worked for, but said the number had risen by 70% in the last year. It has collected more than £200,000 in fee arrears in the last year. In most cases, parents either withdraw their child from a school without notice – which can leave a place unfilled for many months – or fail to keep up payments of fees, but keep their child at the school. Parents are usually liable for fees unless they give a school at least one term’s notice that they are withdrawing their child. The Independent Schools Council (ISC), which represents more than 1,200 schools, said 14 member institutions had closed in the past year and described the economic climate as “the most challenging for decades”. Many more schools are thought to have closed, but are not part of the ISC. One headteacher of a private school, who did not want to be named, said independent schools were having to be “quite assertive” in retrieving unpaid fees. “Otherwise parents think the school is a soft touch. It is so difficult because it is hard for parents to accept that they cannot pay for their child’s education.” Mike Lower, general secretary of the ISBA, said more parents were defaulting or falling into arrears, but “schools still had salaries to pay and overheads to cover”. He said it could be quicker for a school to use a debt collection agency than to pursue a debt through a county court. Sean Feast, spokesman for the Credit Services Association, which represents more than 300 debt collection agencies, said a larger number of middle-class parents were “being caught up in a web of debt”. “This in turn means that the approach by the collectors has to be different … It is unlikely that these people will ever have been in debt … it is in the interest of the debtor, the agency and the school to keep the child in the school.” Richard Cairns, headteacher of Brighton College, said he had never needed to call in a debt collector as, but was aware of schools “in very shaky financial circumstances, in part because parents can’t afford the fees”. “There are a lot of schools just clinging on by their finger nails,” he said. Figures released last month by the ISC show that the number of pupils at private schools has fallen for the second year running. Student numbers dropped by 786 this year – a fall of 0.2%. The average cost of sending a child to a private school has risen by 4.6% to almost £13,200 a year. Private schools Schools Parents Family finances Consumer affairs Jessica Shepherd guardian.co.uk

Posted by on May 12, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.