Pay up‚ or else…

British private schools are turning to collection agencies to go after parents who are defaulting on tuition

Pay up‚ or else...

Christopher Furlong/Getty Images

Monday morning, 8 a.m., and the drop-off area outside St. James Senior Girls’ School in west London is a bustling picture of urban affluence. Rosy-cheeked students in kilts and matching knee socks hoist overloaded backpacks out of Porsche Cayennes and Lexus SUVs. Many wear matching straw boater hats decorated with ribbons in the academy’s official colours. Parents and nannies chat amicably on the sidewalk, clutching take-away lattes, before hopping back in their double-parked vehicles and zooming off to work. It’s the sort of idyllic scene that takes place every school day in prosperous cities around the world. But here in Britain, it’s one that conceals the darker economic reality facing private schools today.

Since the recession hit a couple of years ago, many families have found themselves struggling to keep their children in the private school system—and with average tuition fees of $21,000 per child per year, it’s no wonder. As a result, an increased number of schools are now turning to debt collection agencies to recover the outstanding fees owed to them by parents who have either defaulted or found themselves in arrears. According to Michael Lower, head of the Independent Schools’ Bursars Association, this method of fee collection is less costly and time-consuming than the other option: taking parents to court. “While the parents struggle, it also means a bigger shortfall for schools who have overhead and staffing costs to think about. In the end they are left with two choices: remove the child—which is usually a last resort for obvious reasons—or take action.”

The collection agency Daniels Silverman recently said it expects to collect almost $14.4 million in outstanding fees from parents this year. That figure is up by around $5 million from last year. Agencies are also reporting a sharp increase in the number of private schools that have retained their services: Daniels Silverman is acting for 74 schools, up from 48 last year, while a competing collection agency, Sinclair Goldberg Price, is reporting a 70 per cent increase in the number of private schools it now works for. According to Daniels Silverman, its average private-school client is owed around $190,000 in fees. Not a huge number when it comes to the educational institutions of the global elite—but enough to push many smaller private schools to the brink of closure.

According to the Independent Schools Council, an organization that represents the interests of British private schools, 14 of their roughly 1,200 member institutions shut down in the past year. There has been speculation that many more that are not ISC members have been forced to close as well due to harsh economic realities. Still, figures released by the ISC reported that 786 students attending its member schools dropped out this year—a fall of only 0.2 per cent. According to Lower, this is because schools often work to reach an agreement with debt-stricken parents, such as a staggered payment program.

According to Julia Dennison, editor-in-chief of Education Executive, a monthly magazine for educators, it’s an awkward situation when private schools go after families who have been caught in a web of debt—especially when their children are still enrolled in the school. (At present, many private schools give parents a grace period of one term to catch up on late fees.) “Obviously, removing the child from the school is the last thing they want to do, but there is more and more evidence that parents are having trouble making their payments,” she says. “Private schools around the world are suffering financially, so it’s a global problem, but our evidence indicates it’s particularly bad here.”

Interestingly, there may be a third option. While some British private schools are scraping by, a handful of others are applying to receive government support. At present, six private academies are slated to become “free schools” under a new government scheme that promotes independent, state-funded education. Twelve more are said to be applying to make the switch next year. Dennison says this transition, which marks a “general trend toward independence” embraced by the Tory-led government, is highly controversial with both the National Union of Teachers (NUT) and other proponents of the existing state school system. “The worry from critics is that free schools will become a drain on the pupil numbers and resources on the existing community,” she says.

The notion of providing a tuition-free independent option to parents who can already afford to send their children to private schools is a controversial one, especially in light of recent government cuts. Last year, David Cameron’s government shut down the $90-billion, 20-year Build Schools for the Future scheme—an initiative of the previous Labour government that poured tax dollars into state schools. Now, it seems, the Tories are concentrating their efforts elsewhere. “There’s been no debate about whether people want a national state school system or all these independent schools coming in. It’s an untried experiment and could devastate state schools,” NUT general secretary Kevin Courtney recently told the press.

In the short term, however, most private schools will attempt to weather the storm without looking to the government for support. “They’re hanging back and waiting to see what the free school system will look like,” says Dennison. “It’s a difficult time for British independent schools, but also an interesting one.”

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