A student is behind on tuition, but his or her family has promised to pay the remaining amount. When contracts for the following year are sent, that student commits to re-enrollment. Now the school needs to make a choice—do you re-enroll a student who owes tuition from a previous term?
The answer isn’t simple. Private-independent schools should rely on tuition as the primary source of hard income. Tuition is vital to pay teachers and staff members, as well as provide for the school’s utilities and supplies.
Late tuition is problematic for the school and parents alike. It impacts not only the school’s cash flow, but its reputation. The school cannot afford to appear lax when it comes to tuition collection.
However, the school also doesn’t want to seem uncaring toward a family’s financial difficulties. Many parents choose a private-independent education for their child because they believe it’s in his or her best interest. Affordability, while a concern, may not be their primary focus.
Parents may decide to stretch and sacrifice to give their child an education at your institution—and could be unwilling to give the opportunity up, even when they cannot afford it. Therefore, consider the parents’ pride and the impact on the student. In many cases, parents fall behind because they are unable to pay what they owe, not because they don’t want to.
So, how do you navigate this difficult situation? Below are strategies that the Head’s Office and Business Office together can put into action.
- Make all financial policies clear—both verbally and in writing. Include them in the parent handbook, which parents agree to abide by when they sign the enrollment contract. Payment policies can also be reviewed at various parent meetings and should be included on your website.
- Set aside emergency financial aid funds for unexpected school year needs, such as unpaid tuition.
- Communicate respectfully by making a polite phone call once a payment is 30 days late rather than sending a late notice. Speak with the parent responsible for the payment and discuss the situation at hand.
- Consider alternative arrangements when a payment is more than 60 days late. Conduct a personal meeting with the parents and offer them the opportunity to fill out a financial aid application. This enables you to understand the family’s finances and decide whether to offer a mission-appropriate discount. Propose a workable payment strategy that leaves the parents feeling secure, lets them know their child is valued, and honors the school’s written payment policies.
- Review the family’s application if they already receive financial aid to see if your award makes the school accessible to the family. If the school or the family has failed to accurately assess the family’s ability to pay, consider revising the award.
- Know that if you offer re-enrollment when tuition hasn’t been paid, you may be “buying” a student through discount and setting a precedent.
There is no one-size-fits-all approach to managing families who haven’t paid tuition. You want to maintain your school’s reputation and be fair to families who have made their payments, while still fairly assessing those who have not.
Ask your team: What if you assess that the parents can afford to pay, but simply will not? Will you refuse to re-enroll the student? Withhold transcripts? Turn the matter over to a collection agency, or write off the bad debt? If you decide to re-enroll a student who hasn’t fully paid, will others follow suit?
Create a mission-appropriate policy and then enforce it evenly across the board. However, if you have built the expectation that parents are able to get away with late payments, do not suddenly take a hard line. Set policies, announce them for the coming year, and enforce them.
Clear policies, communication, and expectations help make the payment process as easy as possible for your school community.
Additional ISM Resources:
The Source for Private School News Vol. 16 No. 6 Will Raising Tuition Scare Families Away?
The Source for Business and Operations Vol. 16 No. 1 What Do You Do When a Family Files for Bankruptcy?
Additional Resources for ISM Members:
I&P Vol. 42 No. 6 Tuition Change and Enrollment Demand: A Replication Study
I&P Vol. 39 No. 2 Full Disclosure of Non-Tuition Expectations During Admission
I&P Vol. 38 No. 13 Tuition Discounts and Your School's Sustainability
