There are some key principles to bear in mind when trying to secure unpaid fees, states Giles Parry

While removing the VAT exemption for independent school fees doesn’t mean all schools will automatically start charging 20%, it is expected that costs will inevitably go up. A study by Weatherbys Private Bank had previously predicted that under the Labour government’s plans, the average cost of sending a child to boarding school will be £688,000 by 2036. This puts more pressure on both parents and schools – many of whom are already struggling to meet the bills and deal with payment issues.

From my experience in giving advice to organisations across all sectors on debt collection and payment management, the issues which are prevalent in independent schools can be some of the most difficult to deal with as they are so intertwined with family life. Taking the decision as a parent to remove a child from the school where they are thriving is an incredibly difficult and emotional one. So much so that we are seeing parents turning to expensive loans or money from their own parents to cover the costs instead.

Regardless of the circumstances, those tasked with pursuing unpaid bills in independent schools frequently encounter the challenging responsibility of dealing with parents under financial strain, as well as concerned about their children’s education and wellbeing. When assisting schools in recovering tuition fees, there are a few key principles to keep in mind from a debt collection perspective.

1. Upfront communication

Being clear about fees and all the options available to parents at the outset should make it easier if any financial issues do arise. For example, clearly signposting any scholarships, grants and means-tested bursaries which are on offer, and any other discounts which could be made available. For example, if a sibling already attends the school, this could create an important lifeline for a family suddenly struggling with their finances.

2. Monthly payment plans

Offering payment plans and being open to creating a payment plan which suits a family’s specific circumstances can be hugely helpful for parents looking to manage their budget and cash flow, and equally, ensures the fees are being paid in a timely manner.

3. Nurturing relationships

It’s at times of crisis that people are most likely to go quiet, avoid communication and generally stick their head in the sand. In my experience, this is especially common in private school settings, where parents may experience shame and embarrassment if their personal financial difficulties become more public than they would like. For instance, the inability to pay might be tied to situations such as divorce or business failure. This is why fostering an understanding attitude and ensuring parents feel psychologically safe to discuss any financial issues early-on is often vital in ensuring the situation doesn’t worsen and is carefully and sensitively managed, keeping the school’s valuable reputation intact. Encouraging parents to engage with the process earlier can also keep legal costs down and boost the chances that a realistic repayment plan can be settled on quickly. Relationship management and preservation is vital too – many parents will try hard to keep their children in the school and you don’t want to cut any ties.

4. Take a bespoke approach
   Considering that most parents who can afford to send their children to a private school are high net worth individuals, a tailored approach to debt collection is often necessary. Many of these parents may live abroad, travel frequently, or have multiple properties and addresses. Their personal circumstances and sources of wealth can vary significantly. Recent reports have also highlighted that many parents facing the rising cost of school fees are turning to their own parents for financial support. Therefore, taking time to get to know individual circumstances and creating an appropriate payment plan can be invaluable. Through this process you may also wheedle out other issues, for example, the invoices have been going to the wrong address.

Debt recovery is always a delicate matter, regardless of the industry. However, in the education sector, it requires a particularly skilled, carefully managed, and sensitive approach to ensure that both parents and pupils are supported throughout the process. This will be even more relevant in the coming months as schools gear up for the VAT change, and all that entails.

Giles Parry is a litigation legal assistant at law firm Shakespeare Martineau.

Giles Parry