Schools call in debt collectors

Private schools are hiring debt collectors to chase unpaid fees as the recession bites.

Baycorp general manager Joe Nel said his agency had about 300 private and state schools on its books, slightly up on last year, with an average of $650 a debt.

Graeme Byers, managing director of Guardian Credit Service, is chasing about $40,000 worth of debt for 15 private schools on his books.

The debts range from a few hundred dollars for sports fees to $8000 for unpaid tuition fees.

Byers said the debtors were mainly "pretty honest people who have got themselves into problems".

But some are harder to find. "The people have gone over to Australia - they've actually skipped the country."

Lynda Reid, principal of St Cuthbert's College in Epsom, Auckland, said referring unpaid fees to debt collectors was "an absolute last resort."

"When we have exhausted every option, yes we do, like every other business, have to bring in a debt collector. We do it very reluctantly."

Reid said the school took the step only when parents had ended contact and ignored the school's requests to discuss the problem. In rare cases girls were asked to leave the school.

However, Reid said the school introduced automatic payments as an option last year to ease the pressure of paying fees all at once. Fees at the school range from $13,408 to $15,900 a year.

The problem also exists in state schools. Glendowie College deputy principal Gordon Robertson said the school was short about $87,000 at the end of last year, up from $47,000 the year before. The school had forwarded around $6000 of that to a debt collecting agency.

The college did that only when the student had left school and the parents had not replied to several letters, he said. "With some families, the five years they're here they don't pay much at all."

The families owe the money for compulsory school fees and equipment charges for subjects such as photography.

Deborah James, executive director of Independent Schools of New Zealand, said the recession was affecting schools. "I think that schools have become very much aware of the economy and difficulty that some parents may have in meeting their tuition fees."

James said some parents were cutting costs by deciding to educate their children privately at either the secondary or primary levels rather than for their entire education.