You can follow every process to a T, but you cannot put money in a parent's wallet.

You can follow every process to a T, but you cannot put money in a parent's wallet.

A parent owes R42 000 in arrear school fees, and every step in the process has been followed exactly as it should be. Payment reminders were sent. Multiple attempts were made to set up a payment plan. The account was listed, and handed to attorneys. And the school still has not seen a cent.

Nothing about that process failed. Every action was correct, on time, and compliant. The only thing missing was money the parent did not have, and no process, however well it is followed, can manufacture that.

So, what now? What must schools do with their outstanding debt? Should the legal team even try to collect the money owed? And what is government's role in all of this? That is where the real conversation needs to start.

It starts with the schools

Let's begin with the schools, and how they handle the process from enrolment to handover of outstanding school fees. Private schools, in our view, are in a much better position than public schools, since they have the option to screen an application and select the learners they want to enrol. That means setting clear criteria an applicant has to meet, doing the necessary checks and financial profiling before granting an application, and only accepting it once every box has been ticked. If they follow the process and make sure the parent qualifies according to the criteria, that gives them the best chance of collecting their outstanding fees, and it gives the legal team something to work with if the account is ever referred to them. The problem comes in when schools want the numbers up, full classrooms, and that pressure works against being selective. That is when collecting outstanding fees becomes significantly harder.

For public schools, things are more complicated. There is no selection option, and parents are not required to provide any financial information when enrolling a learner. When a learner is already enrolled and the family cannot afford the monthly school fees, they can apply for an exemption instead. That child can sit in a public school's classroom from Grade 1 to Grade 7 without a single payment ever being made. The challenges for public schools run deeper, because they can only start asking questions once a parent stops paying.

When the account reaches the legal team

When the internal collection process is completed, both private and public schools refer accounts to their legal team for collection. But how do they decide whether an account is actually worth the legal team's time and resources? This matters more than it sounds, because some schools send accounts through knowing the parent has nothing to offer, but at least the bad debt becomes someone else's problem, for the moment. Attorneys typically work on a no-success-no-fee basis, which means schools tend to refer accounts regardless, with little consideration of whether the parent can actually pay. Debtor management teams often know which accounts will yield nothing, but if management instructs them to proceed anyway, that is what happens.

Legal teams have two main challenges once an account lands in their office. First, there is a special relationship at play, because a child is involved, and that relationship with the school does not end once a matter reaches their desk. They are collecting outstanding fees from a parent whose child is still walking through that school's gate every morning. Second, a parent behind on school fees is usually behind on other debt too, and if that debt is tied to their house or their car, those creditors get first attention. School fees end up further down the priority list as a result.

The best thing a legal team can do, once a file lands with them, is assess it for the probability of payment. Where that probability is medium to high, using their resources for collection makes sense. Where an account is high risk with very little to no chance of payment, spending expensive resources on it does not make sense.

Closing a file is a bitter pill to swallow for any school, but if there are no assets to sell in execution, and the parent's income is not covering the basics, the outcome is a payment order of R100.00 per month on R50 000 in capital, with legal costs and interest adding to the balance every month.

The credit bureau is the clearest indicator

The quality of that assessment depends heavily on what the credit bureau provides. Credit bureaus play an important role in determining a parent's probability of payment. If the reports are outdated and the scores are not accurate, the debtor management team and the legal team end up making the wrong decision about which collection approach to take. We have worked with schools where an account was handed over multiple times across different years, with a judgment granted for each year's debt, yet none of those judgments appeared on the credit report. Judgments affect a parent's credit score negatively, and if they are not recorded accurately, the probability-to-pay assessment is built on incomplete information. That makes collections harder than it needs to be.

In many ways, the credit bureau is the clearest indicator of how close, or how far, that money actually is. Right now, that indicator is not always reliable.

Software is not a silver bullet

The tools schools use to manage the process carry equal responsibility. Software companies that provide tools to automate the collection process need to remember one thing: debtor management and collections are far more than sending SMSs and emails. Telling a school that the debtor management software your company provides will bring the money in is far from the truth. Yes, it helps save time, and some money in the long run. But helping a school manage debt through task automation is not the same as helping that school navigate the best collection strategy and steps in the workflow.

Schools need partners who can help with the most important steps in the process, assessing a parent's ability to pay and building a payment culture at the school. If the software provider cannot assist with that, the collection strategy in place is not managing risk as it should.

Behind every account is a parent

Behind every account, every process, and every tool, there is a parent. The one this is all about. The one that the debtor management team, the legal team, the credit bureau, the software company and every process and tool in this ecosystem are ultimately trying to understand, the real story behind the finances. Nobody can put money in an empty wallet, that much we know. But a parent controls one thing completely: how they spend their budget, and where school fees sit on that list. The real question is whether they hold themselves accountable for that choice.

We understand parents have a social calendar. Learners want to go on sports tours, to the matric dance, to everything else that comes with school life. But someone has to pay the teachers and cut the grass first. School fees need to sit at the top of a family's budget, not the last line on the list. If that is the only thing that changes, it will make a huge difference, without a doubt.

Parents should also be honest about their finances. But when it comes to completing a private school application form, or an exemption form, some details tend to disappear. No mention is made of the second home that is rented out, and the income that comes with it. No mention of commission payments or bonuses. And absolutely no mention of any trust, or any savings sitting on the side. So from the very beginning, the financial picture you have of that parent is incomplete.

And then there is government

For public schools, funding has not kept pace and is moving backwards. At some schools, government support comes to less than R10.00 per learner per month, while at that very same school, the exemptions granted in a single year add up to more than R1 million. That gap is the financial burden schools are left carrying, and it is exactly why getting those outstanding fees in matters as much as it does.

It may be time for every party in this ecosystem to sit down and have an honest conversation about what the real challenges are. The challenges schools face cannot be solved by a school, its management, or its debtor management team alone. When the school applies the right handover criteria, the legal team assesses the probability of payment, and the parent takes accountability and prioritises school fees, and the money still does not come in, then everyone has done their part. The job was done. But someone still has to pick up the tab.

That is the conversation government needs to be part of.

You can follow every process to a T. You still cannot put money in a parent's wallet. That was never going to be debtor management's job alone to fix, and it never should have been.

Daleen Vorster
Co-founder, Jumping Fox Software and Jonker Vorster Attorneys
Attorney specialising in education and credit law since 2002