The observant amongst you will have seen the recent articles from the Independent Schools Council regarding the challenges parents face when paying for private school fees; and having seen the data from their research, you will know that it isn’t just a handful of parents facing financial challenges.
SFP engaged leading education research company MTM Consulting look deeper into these financial challenges to find out direct from both parents and schools what help schools could offer parents who face this challenge.
“When MTM presented their findings, we were surprised at some of the results,” said Gavin Worrall, Head of Education Services at Premium Credit Ltd.
A staggering 30% of respondents wanted to pay their child’s fees monthly which contrasted with many schools who still believe that a desire to spread costs and manage cash flow efficiently is somehow connected with an ability to pay.
“Our research clearly shows that predominantly parents that send their children to private schools have a high net worth but not always the ability to raise cash as it can be tied up in assets.”
The research further identified that three out of 10 parents were too ashamed or embarrassed to approach the school to discuss their financial concerns and would consider leaving the school entirely. As one Mumsnet parent suggested – “lobby your local businesses for sponsorship.” This is a worrying statistic for two reasons:
1. The school should provide parents with more choice when paying the fees.
2. The amount of undue stress this type of behaviour puts on the school, the parent and, more importantly, the student can easily be avoided.
30% of respondents wanted to pay their child’s fees monthly
During the research phase, SFP were somewhat surprised at the number of schools who failed to demonstrate a knowledge of how they could offer a scheme in a compliant manner now that credit is regulated by the FCA.
“We understand that regulation can sometimes put a halt on a school’s decision process when offering a monthly scheme. The research is telling us that the ability to pay monthly is such an important choice for parents today that schools need to take it seriously and we have the solution to help schools,” commented Gavin.
The research also received feedback from schools on what were the key points they wanted from a third-party monthly payment provider –
- Reduce regulatory burden
- Reduce administration
- Reduce bad debt.
“SFP provides a wide array of compliant options to suit a school’s needs and we can deliver on all the above points,” added Gavin.
In offering finance, schools will receive the full term’s fees and any extras at the start of the school year. This optimises cash flow and provides payment certainty.
Repaying by monthly instalments will be attractive to financially astute parents whose motivation comes not so much from a pressing financial need, but from a prudent approach to managing their cash flow.
“As the evidence suggests, this approach will rapidly become the norm and not the exception, so make sure regulation does not hamper your plan. I would welcome the opportunity to meet with any school and discuss what they have in place today and if it’s compliant,” concluded Gavin.
School Fee Plan has been the leading provider to private schools and their pupils’ parents for the past 20 years.
To find out more, call Gavin on 07884 583195 or email@example.com