School expenses (fees, uniforms, books, sports and camp fees) can cause a lot of stress in times of reduced income. This is particularly so if you are paying independent school fees. Unemployment will almost certainly affect your ability to keep up with school expenses, at least in the short term.
Schools are very keen to maintain high and prompt payment of school fees to fund the facilities and programs they are offering and developing.
Decisions about your children’s education involve a lot of emotion. They can cause you severe stress if you wish to minimise the impact of your financial hardship on your children.
- When you can't pay
- Payment options to consider initially
- Contacting the school for options
- When you cannot come to an agreement with the school
When you can't pay
However, if you cannot afford the school expenses and you don’t do anything about the arrears, the school may take you to court. Depending on your circumstances, unpaid school debts could result in serious consequences including losing your home.
Payment options to consider initially
If you are having difficulty paying school expenses, you should check the following options without involving the school directly:
- claiming on an insurance policy that covers payment of school fees in the event of unemployment
- reviewing your assets to see if you can sell or borrow against them
- borrowing against your mortgage. Mortgages usually have the lowest interest rates of all loans. You may be able to borrow against your mortgage to pay school fees. You need to be mindful that this might mean increased mortgage payments or increasing the term of your loan, and you may even lose your home. However, you may be able to make extra payments and restore your mortgage to its original term when you are working again or your finances are more stable
- applying to your superannuation fund for early access to your money on the grounds of financial hardship to see if overdue school expenses may be considered a legitimate family living expense. Find out more about early access to superannuation.
Contacting the school for options
If you are not able to find a way to pay due school fees, you may ask the school for consideration during your period of financial hardship. You might try:
- asking the school if you can access any school relief for books and clothing; or if there are any scholarships available to assist paying school expenses.
- negotiating a payment arrangement with the school. The school may offer you a more affordable plan, perhaps involving smaller, more regular part-payments to ease the pressure of the one-off demand for a semester fee. You may be able to make a part payment to hold over until your finances improve.
- requesting a temporary suspension of your fee payments until your circumstances improve and you will be able to pay any fees and the arrears.
- negotiating for a waiver of the fees if your family has a long association with the school and particularly if your child brings some profile to the school through an academic, sporting or cultural achievement.
- offering to perform professional services or other work for the school for no charge to offset the amount owing for fees.
Make sure you obtain written confirmation from the school about any change to your agreement regarding the payment of school expenses.
When you cannot come to an agreement with the school
If you are unable to reach an agreement with the school about how to pay your outstanding fees, you should write to the school council, explain your circumstances and ask again for a payment plan.
If you are still unsuccessful, you should seek the advice of a financial counsellor or seek legal advice as the school may move quickly to recover its fees from you.