7 minutes to read
In the first half of 2019, the school default rate in schools from early childhood to high school grew 5.9%, according to a survey by Serasa Experian. In the face of the crisis caused by the pandemic of COVID-19, this problem has become more evident in schools, since many people lost their jobs or had their salaries reduced, needing to cut expenses, and classes were suspended.
We believe that quality education is essential and, in times of crisis, a good school seeks the best possible solutions to guarantee this despite the difficulties faced by both parties. After all, she truly cares about her students and thinks about always offering the best education for them.
Understand in this article how school defaults affect schools, check out tips for dealing with this issue during crises and find out what the risks are of not knowing how to do it properly.
What you will find in this article:
How does school default affect schools?
While the quality of education should always come first, school principals and owners must not forget that they are also companies. So, in order to offer the best education to their students, they need to keep their accounts up to date.
School defaults, which are the failure to pay tuition fees, have a major impact on schools, as this is their main source of income. Thus, when parents fail to pay due amounts, the school may struggle to maintain its functioning and invest in improvements.
This is because, even in situations where face-to-face classes are suspended, staff and expenses for maintaining school infrastructure need to be paid. Only in this way is it possible to guarantee the continuity of the teaching-learning process even at a distance without losing quality.
Therefore, it is essential that school principals and owners know how to deal with this problem before it generates significant disorders that endanger the maintenance of their schools.
What to do about this problem?
We list some measures to deal with school defaults and explain important points that must be observed. Understand below.
Create a billing route
Charging late payments is tricky, but it needs to be done. To make sure that this occurs in a cordial and appropriate manner, avoiding embarrassment and stress in the relationship with parents and students, create a collection script.
Specify who will contact the person responsible for the student, how they will approach that person, what means can be used, how long from the beginning of the default the charge will be made.
Keep in mind that any measure in this sense needs to be carried out in private ways so as not to expose families, to appreciate cordiality and to consider the circumstances of each case, including the reason for default, financial conditions, good or bad payment history.
Have several communication channels
In the face of crises that impact education, all members of the school community are affected. Therefore, it is important to offer parents the possibility to communicate with the school and negotiate in order to find a solution that works for everyone.
To achieve this, make available several communication channels and find out what prevented the payment of the monthly fee when charging. Knowing the causes of the problem gives clues as to how to solve them.
In addition, by offering different channels, the school ensures that those responsible for students can get in touch through the most convenient means and demonstrates that it is open to dialogue.
As a result, it not only helps both parties to deal with the situation in a cordial way, but also encourages parents to get closer to the school, which will certainly not be forgotten after the crisis.
Make payment easy
If more than one monthly fee is accumulated, the tendency is for the problem to worsen over time. Then, when talking to the parents, propose different ways of paying the arrears according to what caused this situation.
Allow them to settle the debt by different means, according to their preferences (boleto, credit card, current account debit). The last two are extremely practical, as it is possible to carry out transactions virtually and automatically.
Another interesting measure is to make the payment more flexible, establishing agreements that allow, for example, to divide the amounts into installments. After all, bearing the costs of late fees and those that will arrive in the coming months may not be possible in cases where families are experiencing financial difficulties.
If you choose to offer an agreement, be sure to make the debt payment rules clear and record everything in a contract – total amount to be paid, due date, payment method and number of installments, if applicable.
Find out what the legislation determines
Before taking any action to try to resolve school defaults, know what the legislation determines and act accordingly, also observing what was established in the contract signed by the parents when making the enrollment.
The Consumer Protection Code (CDC) and Law 9.870 / 99 have important issues to deal with this problem. The first, for example, in Art. 42, defends that the person responsible for the debt should not be exposed to ridicule, constraints and threats when being charged.
In Articles 5 and 6 of Law 9,870 / 99, criteria are indicated that must be followed when applying penalties, among which:
- termination can only occur after the end of the school year;
- pedagogical punishments, such as suspension of evidence and retention of documents, cannot be adopted;
- the school must send the necessary documents for transfer if the parents request them;
- the right to renew enrollment is not guaranteed to defaulting students.
What are the risks of not handling it properly?
If the school does not handle school defaults properly, parents may choose to take their children out of school due to difficulties in paying tuition. If it reaches that point, the repercussions on the school’s finances will become more significant.
In addition, depending on the number of cases of families failing to pay tuition fees, the school may find it difficult to afford essential expenses, needing to reduce its staff or make a considerable cut in expenses, for example.
In the event of school defaults, it is essential to take effective measures before the losses cause profound damage to the school, especially in times of crisis. To avoid consequences such as dropout and even bankruptcy, the best way is to seek joint solutions that work well for families and the school. Thus, both parties are able to overcome the problem and gradually return to normal.
Share this article on social media to help other school principals and owners deal with school defaults.