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Schools bankrupting parents for fee debts.


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#1 ***MEZ***

Posted 30 May 2009 - 08:36 AM

I find this situation quite bizarre.

Firstly that the school allows parents to get so far behind on fees that they would be owing so much. How could the school let it get to the "bankruptible" stage?

Why don't private schools just "end the contract" when fees are a semester behind? They're not charities and it's not as if there isn't a free alternative up the road.  shrug.gif

http://www.smh.com.au/national/schools-mov...90529-bq8b.html

#2 Guest_muminthemaking_*

Posted 30 May 2009 - 08:46 AM

As I suspected, and the article states, they will let children finish a semester or year, as it's in the childs interest to do so. There are some people in society without a conscience when it comes to paying their bills. (I'm a former credit mgr and have seen it all!)

#3 Guest_keylimepie~_*

Posted 30 May 2009 - 08:48 AM

They are entitled to recover their money owing, like any other business.

It's not the schools fault parents don't pay.

The school is silly for not cutting them off earlier. I'm sure they have procedures & prosesses they have to go through first though.

Love it how it's the schools fault.  rolleyes.gif  rolleyes.gif
perhaps these families felt a lot of shame to pull their kids out of school. That's no excuse not to pay your bills though.

#4 ~LTM~

Posted 30 May 2009 - 08:49 AM

If you don't pay your bills, there are consequences.  Especially in a situation where there is a free alternative down the road.

#5 ***MEZ***

Posted 30 May 2009 - 08:52 AM

QUOTE
The school is silly for not cutting them off earlier.


I agree. If an elite school charges $20K a year, then that's a massive bill to get into arrears with. Just try to get that far behind in your mortgage or your Telstra bill for that matter.

Essentially, these parents are using a service without paying.

Edited by Maelstrom, 30 May 2009 - 08:53 AM.


#6 Trilogy

Posted 30 May 2009 - 08:55 AM

If your children have used the service you need to pay for what they used, simple.

As others have pointed out, if you can't/won't pay then go to a government school.

#7 TheMuriels

Posted 30 May 2009 - 08:55 AM

People know upfront how much the fees are when they enrol there child(ren).  If you can't pay the fees, don't enrol the child in private eduation.

Edited by TheMuriels, 30 May 2009 - 08:55 AM.


#8 Prizzy

Posted 30 May 2009 - 09:49 AM

Many families have fallen on hard times of late.
I think the GFC is responsible for the majority of this. I feel for the families and the kids. How awful to be so far behind with such big debts.
There has been a small number of kids moved from local private schools to DDs tiny school so its happening all over.
I'm sure the families could afford the fees at the time of enrolment. This is an ugly bit of tall poppy syndrome, typical of EB.

#9 emmafg

Posted 30 May 2009 - 09:52 AM

QUOTE
People know upfront how much the fees are when they enrol there child(ren). If you can't pay the fees, don't enrol the child in private eduation.


So true.

This equally applies to buying houses, cars, holidays, alloys, TV's etc etc.

This is a non-story.

#10 Prizzy

Posted 30 May 2009 - 09:55 AM

I just don't agree.
When I bought my home I plan to be working at least 2 days a week and for my husband's business to continue to be at least as successful as it was the day I bought it.
If one of these things don't go to plan and I can't pay the mortgage, does that mean that I shouldn't have bought it in the first place? If I get sick, should I have only rented an apartment I could pay on centrelink benefits?

Use some common sense.

#11 emmafg

Posted 30 May 2009 - 09:58 AM

QUOTE
If one of these things don't go to plan and I can't pay the mortgage, does that mean that I shouldn't have bought it in the first place? If I get sick, should I have only rented an apartment I could pay on centrelink benefits?


I completely agree with you.  I am sorry if the poor sarcasm in my previous post wasn't obvious.   dry.gif

#12 *LG*

Posted 30 May 2009 - 10:02 AM

i think houses. etc are a different issue. Although DH and I bought a house last year, in a "lower" class area, knowing that if we went to one wage or interest went up, we could still afford repayments.

HOWEVER - back to the school issue, I see private school as something that you can pay for if you can afford it comfortably - if you can't you don't enrol your child.

DH is a teacher in a private school and I teach in a public school - and we will only send our children if we can comfortably afford to do so. Private schools are a great investment, but not if you make yourself bankrupt. The right public school is also great!! biggrin.gif

#13 ILBB

Posted 30 May 2009 - 10:03 AM

I think it is a difficult situation for the schools involved.  If they turf the student out at the first non payment of fees they disadvantage the child and potentially lose the opportunity of the parent paying fees in the future if their situation improves (as can sometimes happen - if they get another job etc).  I don't think many people make too many conscious decisions they know they can't afford.

ETA - anndee many people's circumstances have changed in ways that even 12 months ago it would have been difficult to imagine.  What might have been comfortable for some 12 months ago (or even 2 months ago) may now be out of reach.  Or have you not been reading the papers about job losses etc?

Edited by ILBB, 30 May 2009 - 10:43 AM.


#14 Phascogale

Posted 30 May 2009 - 10:04 AM

QUOTE
If one of these things don't go to plan and I can't pay the mortgage, does that mean that I shouldn't have bought it in the first place?
No, it means that you will probably do something to stop going bankrupt if the situation arises and before you get kicked out of your home.  It may include selling and getting something smaller or renting for a while.

The same situation applies when you have your child in a private school.  You know what the fees are.  If you lose your job, then maybe you should think about pulling your child out as there is normally a low cost/free alternative down the road.  Not keep your child in there and rack up a large debt that will need to be paid for.

I too think it's a non story.

#15 Guest_Cat©_*

Posted 30 May 2009 - 10:05 AM

I feel for the parents.

However they needed to pull thier children out as soon as they knew they were going into finacial trouble. Sad for the child but thier house is more important.

Do remember though that some school will charge you till year end anyway, as written in thier policies!!! So you could end up with a $20k bill per child even if you do pull them out! $20k is probably less than some schools charge!!!

Neither are hugely in the wrong, just a sign of the times and a sign that the families didnt have enough put aside for such emergencies.

#16 Guest_keylimepie~_*

Posted 30 May 2009 - 10:07 AM

Prizzy I'm not sure I understand your point.

If you use a service you pay for it.

If you fall on hard times you rebudget & work out if you can still afford certain things. If you can't afford foxtel you get rid of it. If you can no longer pay the private school fees you go to public school.

I'm sure if families talk to the school when changes like loosing a job ocurr then they may try to work out a payment plan. There's no use excepting a service you can't pay for.

#17 JRA

Posted 30 May 2009 - 10:08 AM

Around here there are a few families who have moved children from private school to state school, due to the fees.

There are also quite a few who have lost multi million dollar homes to margin calls.

Both are VERY sad. But sadly we need to pay for things.

If the parents don't pay their school feeds it means higher fees for those that remain.

QUOTE
I'm sure the families could afford the fees at the time of enrolment. This is an ugly bit of tall poppy syndrome, typical of EB.

Yes, and pulling a child out of school due to inability to pay the fees is a really big move, both for the child and for the parent. Many understandably hold out the hope that the situation can change. Selling a car, a painting and investment is not a huge emotional decision, and impact on the childrens life like pulling them out of school.

#18 Guest_Cat©_*

Posted 30 May 2009 - 10:11 AM

QUOTE
If you can't afford foxtel you get rid of it. If you can no longer pay the private school fees you go to public school



ah but foxtel has break fees, and so do schools, or often they make you pay to term end or year end.

If you have sold all assets to pay the daily bills already and have your house on the market but no one to buy it, what do you do then?

#19 ***MEZ***

Posted 30 May 2009 - 10:30 AM

QUOTE
Use some common sense.


Is it common sense to keep using a service you can't pay for that may bankrupt you, or to use the free alternative up the road? I guess we all have a different sense of 'sense', so to speak.

#20 Gangnam Style

Posted 30 May 2009 - 10:41 AM

Did you actually read the article maelstrom? As another poster has mentioned, they'll allow the child to end an unpaid term or semester so as to minimise disruption to the child:

QUOTE
Firstly that the school allows parents to get so far behind on fees that they would be owing so much. How could the school let it get to the "bankruptible" stage?


PLUS, even if the parents pulled the children out mid-term, they are still liable for fees to the end of term, or year depending on the school's rules.

Obviously you have no idea of how high the fees are at the schools in question. Annual fees for one child can be $20-30,000, or more with other levies. Two children, $60K. Boarding in senior years can be $50K each year. The main school referred to is St Josephs, a Catholic school, so more likely to have families with two, three or more boys attending. I can see how it would be very easy for a family with two or three children to owe a school enough money for the school to be pursuing them in court.

That said, I do tend to agree with the Greens spokeperson who said the level of Federal funding these schools receive would go some way to absorbing the debts.  wwhistle.gif

Edited by Contumely, 30 May 2009 - 10:51 AM.


#21 the humming cat

Posted 30 May 2009 - 10:43 AM

QUOTE
I just don't agree.
When I bought my home I plan to be working at least 2 days a week and for my husband's business to continue to be at least as successful as it was the day I bought it.

Houses are a bit different, but yes, if you can't afford to pay your mortgage then you will need to sell your home. With your theory, if your husband's business drops and you have stopped working and have 2 kids and can't afford the school fees, then you think its ok to keep your kids there, taking up 2 spots that someone else will pay for as you had well meaning to pay when you enrolled them?  wacko.gif

To put it simply, if multiple parents don't pay there fees, then the staff don't get paid, rescourses are not provided and the school will struggle to stay open!

#22 Hashley

Posted 30 May 2009 - 10:46 AM

QUOTE
"If they want to [take the matter to court] they've got every right to and I can't blame them," said the mother, who did not want to be named. "It's a lot of money and they've got to retrieve it somehow."

She said she and her husband ran into financial difficulties while their son was in his senior year and it did not seem fair to pull him out.
I feel for the family and it would be a tough decision. The family isn't trying to evade the debt, they know the consequences and will pay for their decision. I would hope they could have worked something out with the school instead of bankruptcy, they don't sound like unreasonable people not prepared to pay for a service they are using.

#23 papilio

Posted 30 May 2009 - 10:48 AM

Non-story really... Willow goes to a private school.  We can afford it now, but if either of us lost our jobs then we probably couldn't.  

If we were unemployed and looking for work, we'd probably be quietly confident that there would be no point pulling her out and disrupting her if a new job was just around the corner.  I can see why parents would want to keep them in as long as possible.  School is not just about learning, it's also about a sense of community.

#24 Gangnam Style

Posted 30 May 2009 - 10:50 AM

QUOTE
can't afford the school fees, then you think its ok to keep your kids there...


As I said, the schools in question will have in their contract with the parents, that fees are payable to semester, term or year end whether your child is there or not! So pulling them out makes no difference to what is contractually owed to the school.

#25 Elemental

Posted 30 May 2009 - 10:55 AM

My school wasn't quite on par with some of the ones mentioned, but it required a minimum of a full term's fees paid in advance, and a semester's notice of discontinuation of enrolment. ie you could be ahead in your fees (for what you were actually paying for - ie tuition for a term) but if your situation changed you still had to pay for an extra term. If you're going to have to pay the fees anyway I can see why parents would leave their kids there.

That being said, $30kpa per child makes me wince.




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