Private school fees increased by between 4 and 10 per cent in 2023,with 23 schools charging upwards of $35,000 a year for senior school and two charging above $40,000 in Victoria.
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Victoria’s 23 highest-fee schools reported a combined surplus of about $127 million in 2021,analysis of their reports to the Australian Charities and Not-for-Profits Commission reveal.
Paris said some families might be asset rich,but they don’t have cash.
“If the school forces them into bankruptcy,the house will get sold,and they get their money. It seems at odds with the faith-based values most of these schools allege to have,” he said.
He said some schools stopped children from graduating or prevented them from going to their school formal.
Credit Clear chief effective officer Andrew Smith said schools pursuing unpaid fees through bankruptcy was “very,very rare”. Credit Clear represents about 40 independent and Catholic schools in Australia,with Victoria its second-highest client base. He said the current economic climate was an “unprecedented situation”.
Smith said schools pursued other forms of legal action over bankruptcy,with the bankruptcy threshold changing to $10,000 in January 2021. This meant the minimum amount of debt a creditor could rely on to trigger bankruptcy proceedings was $10,000,up from $5000 previously.
“In some instances,the only option[for schools] is to take legal action ... and we do facilitate that from time to time,” he said.
Smith said while schools had been more lenient during the pandemic,they were starting to take more direct action.
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“I’m hearing complaints from schools that see their parents drop their students off in very expensive vehicles and are behind on their school fees,” he said.
He said independent schools saw pastoral care and the wellbeing of students as very important,and often saw the students as “innocent individuals” in a challenging situation.
Smith said some families became embarrassed when they could no longer pay their school fees,and he expects the situation will worsen as parents and carers are squeezed financially.
“I definitely see there is going to be some movement of kids being taken out of private school this year,because you probably prefer to pay the mortgage than pay the private school fees,” he said.
Futurity Investment Group director Kate Hill said the firm had seen a 100 per cent increase in families needing support with educational loans.
Hill said schools were experiencing a high level of inflation and increasing business costs as well,so it was understandable they needed to increase their fees.
De La Salle College principal Peter Houlihan said his school’s policy was that no family should have to leave the school because they could not pay the fees.
“The only time we would refer a family to a debt collector is if they don’t engage with us,” he said. “We would never force a family to leave because they can’t afford to pay fees.”
“You probably prefer to pay the mortgage than pay the private school fees.”
Credit Clear chief effective officer Andrew Smith
He said only a small percentage of the school’s families were on financial assistance plans,and families were encouraged to contact the school if they were experiencing financial troubles to negotiate a solution.
Michelle Green,chief executive of Independent Schools Victoria,said when parents enrolled their children in an independent school,they were aware of fees and committed to paying them.
“School leaders are always open to discussing arrangements to support families when they face financial difficulties,” she said.
Green said the support that could be offered depended on the circumstances of the individuals and schools involved,but deferring fees or offering instalment plans were common measures.
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“Like any service providers,schools are entitled to take legal action to recover unpaid debts. This is usually a last resort,” Green said.
Melbourne Archdiocese Catholic Schools acting executive director Dr Edward Simons said Catholic schools aimed to keep their fees as low as possible so they could remain accessible to all families who wanted a Catholic education for their children.
“Any family facing difficulties with school fees is encouraged to discuss fee exemption and payment plan options with their school as early as possible,” he said.
“We don’t want to see any child miss out on a Catholic education because of financial circumstances. Legal action may be considered in the rare circumstance where parents have the financial means but refuse to pay school fees,and all other measures have been exhausted.”
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