2016-01-25

SA schools hand defaulting parents over to debt collectors

Debt ridden high schools in South Africa are increasingly handing over parents who default on school fees, to debt collectors.
According to a report in the Sunday Times, rising applications for exemptions and bad debt has left public schools R2.8 billion in the red.
The Sunday Times cited the Federation of Governing Bodies of South African Schools, which represents 1,935 schools.
Federation chief executive Paul Colditz told the Sunday paper that applications for fee exemptions from parents were expected to increase “given the state of the economy”.
Schools that grant exemptions said that the amount granted to them by the provincial education departments does not even begin to cover their budget.
A school in the Western Cape school that granted almost R2.8 million in fee exemptions in 2014, said it received only R78,000 from the provincial education department last year.
Brett Bentley, MD of a credit-control company said that the more wealthy schools had debt levels of around 10%, while the poorer schools faced debts as high as 50%.
As a result, schools were increasingly having to  hand the names of defaulting parents to debt collectors. These included a top Johannesburg girls’ school, which the Times said was owed R865,159 for last year and about R6-million for previous years, excluding 2015.
It handed the names of 34 cases to debt collectors.
Another high school in Pietermaritzburg told the paper that it had written off approximately R1 million in unpaid fees as bad debt in 2015, and handed over the names of 88 parents to debt collectors.

http://businesstech.co.za/news/wealth/109865/sa-schools-hand-defaulting-parents-over-to-debt-collectors/