As schools prepare to reopen, research shows parents battling to pay fees

As schools reopen for inland provinces this week, it emerged that one out of four parents across SA failed to pay school fees last year, while 15.6% only managed to make a partial payment.

This was one of the shocking findings of research conducted by TPN Credit Bureau into parents’ ability to pay fees.

Michelle Dickens, CEO of TPN Credit Bureau, said that while bad debt was an issue before the start of the Covid-19 pandemic in March 2020, “this has been worsened by loss of or reduced income”.

“Before the pandemic, 75% of parents were able to pay their school fees but during the pandemic in 2020 only 45% had the ability to pay school fees,” said Dickens.

She said that of the 60% of parents who were in “good standing” financially, 52% paid school fees on time.

More than 1,000 schools, 42% government and 58% private, are among her clients. They include some of the most prestigious state and private institutions.

The schools submit their debtors’ books to her company on a monthly basis, as well as information on the accounts that are being paid and the amount invoiced to parents.

The company collects data on about 100,000 active school fee accounts at any given time. 

Her organisation also conducts credit checks on parents of pupils seeking admission.

When looking at exemption applications, we find many parents are applying for something they don’t qualify for. Parents are allocating funds to expensive cars and other luxuries.

—  Michelle Dickens, CEO of TPN Credit Bureau

“We do this with the consent of the parent,” she said. 

This year’s tuition and boarding fees at the country’s most expensive private school, Hilton College in KwaZulu-Natal, are R343,155, while those at Rondebosch Boy’s High, a former Model C school in Cape Town, are R117,500.

“Parents have continued to struggle financially in 2021, prioritising housing, groceries, transport and health ahead of paying school fees. Ultimately there’s little in the budget left over for additional costs such as school fees,” said Dickens.

While struggling parents of pupils attending state schools can apply for either a partial or full fee exemption, there is no such option for parents of pupils attending private schools.

Dickens predicted a spike in applications for fee exemptions from parents this year in the wake of the growing unemployment rate.

“When looking at exemption applications, we find many parents are applying for something they don’t qualify for. Parents are allocating funds to expensive cars and other luxuries,” she said.

She said that schools rely on fees to meet their operational costs and that “the knock-on effect of this nonpayment is that they are struggling to meet their financial commitments”.

According to her company’s research, 66% of government and 65% of private schools have been forced to make budget cuts since the onset of the pandemic.

Only 23% of government and 26% of private schools managed their budgets on the fees collected, while 11% of government and 9% of private schools were forced to use their reserves to cover expenses.”

She said a total of 34% of government and 62% of private schools prioritised payroll during the pandemic, while 42% of government and 15% of private schools prioritised capital projects.

A fifth of government and 14% of private schools prioritised repairs and maintenance, while 3% of government and 9% of private schools prioritised retrenchment packages.

At least 38% of private schools cut back on permanent teachers, while government schools made no cutbacks as staff were paid by provincial education departments.

Private schools also cut back on administrative and ground staff.

Dickens said schools have not reimagined how they can reduce bad debt and “continue to collect fees owed by parents based on old-school collection methods”.

She said the payment of school fees is cyclical in nature, with the fourth quarter of every year typically representing the highest proportion of fees paid. “This is likely due to some schools withholding report cards until fees have been fully paid up, or because parents receive bonuses and use this income to settle school fee arrears.”

In December, Sunday Times Daily reported that several public schools illegally withheld pupils’ end-of-the-year report cards because of outstanding fees or pupils’ failure to return textbooks.

One of the schools, Lenarea Secondary School in Phoenix, north of Durban, forced parents who owed fees to pay up or make payment arrangements before they were given their children’s school reports.

In December 2020, basic education minister Angie Motshekga said that the law does not allow schools to withhold pupils’ reports.