Effective Practices : Finances
Finances Section 7
1. What are the primary areas covered in your school’s tuition contract? Please list each element addressed. (Please attach a copy of your contract.)
2. Is your contract generic in nature with the calculation of tuition and applicable fees handled separately, or does your signed contract include the details of the parent’s financial commitment for the coming year? Why have you chosen this approach?
3. Have you made any changes to your tuition contract in the last three years? If so, what changes have you made and why?
4. What process does your school use to decide on any proposed changes to the tuition contract? Who is consulted, who decides, and who is advised?
5. Describe the key elements of your school’s philosophy in relation to its tuition contract.
6. What about your tuition contract is particularly effective?
7. If there were something you could change in relation to your school’s tuition contract, what would it be and why??
What are the primary areas covered in your school’s tuition contract? Please list each element addressed. (Please attach a copy of your contract.)
The tuition contracts used by Waldorf schools are similar in many ways, yet there are several areas in which schools differ in their approach. Many of the important features listed below show the variety of approaches taken by schools, and give some insight as to how the tuition contract reflects the philosophy and values of the school.
- Some schools prepare a separate contract for each student enrolled at the school, while other schools prepare one contract per family.
- Most schools defer the preparation of the contract until all financial data is known (tuition, tuition assistance, sibling discounts, full payment discounts, lunch fees, after care fees, major school trips, supply fees and remission) and then prepare a contract that details all of these charges.
Other schools use a more generic contract that states that this form is an agreement to enroll a student and that in consideration of the school’s acceptance of the student the parent agrees to pay in accordance with the amounts listed on a separate tuition and fee schedule.
This generic approach allows the contract to be signed at the time of re-enrollment, eliminating the need for follow-up on missing enrollment contracts later in the spring. Once all the tuition and fee details are known a detailed letter is mailed to parents outlining the charges and credits and giving the amount and timing of all payments.
The third area that varies between schools has to do with the payment approach that a parent will use. Some schools ask parents to select a payment plan prior to the completion of the contract, and the contract will spell out the amount and timing of each payment. Other schools ask parents to select a payment plan as part of the contract, and notify parents later as to the timing and exact amount due for each payment.
- Many schools have language in the contract that addresses the parent’s financial commitment to the school, and the implications of early withdrawal. Several schools have clauses in their contract that indicate that a contract must be cancelled prior to June 1, or the parent will be responsible for all charges. Some schools modify this somewhat, stating that if a contract is cancelled between June 1 and August 15 the parent is liable for 60% of the year’s tuition and fees, and that any withdrawals after that time will not be eligible for a reduction in fees or tuition. One school’s contract noted that if a student is withdrawn after October 31 that a parent will be held responsible for an entire year’s tuition.
One contract had particularly good language in this area, stating, “I understand that the principal expenses of the school do not diminish with the departure of students during the year and that, consequently, the obligation to pay tuition is unconditional and I shall not be entitled to any refund for absence, illness, withdrawal, suspension or dismissal by the school. I agree that even though tuition may be paid in installments, this does not constitute a fractional contract.”
- Many schools require that parents participate in a tuition protection program. The contract references this requirement, and typically refers the parent to a separate document outlining the program for plan details.
- All contracts describe the consequences of delinquency. It will state that a student may not attend class if an account is 30 or 60 days delinquent, and that the school has the right to legal action to enforce the terms of the contract. The contract will usually state that the parent is responsible for all associated costs and fees if legal action is required. At some schools fees are charged for returned checks and interest is assessed on all delinquent balances; both of these charges would be noted in this section of the contract. Some schools are permitted by state law to hold transcripts if there are arrearages on tuition; this right is noted in the contract if it is applicable.
- Most schools include a section that indicates that enrollment is contingent on the observance of school regulations and the school reserves the right to dismiss any student if the dismissal is in the best interests of the school, the student or the class. These clauses are written in such a way that a student can be dismissed when there are difficulties with either the child or with the child’s parents.
- Many contracts also include a requirement that a parent provide all needed health forms and records, a requirement that all enrollment forms must be completed prior to the student beginning school, and that additional fees will be assessed for items such as non-returned library books, field trips and other incidental expenses.
- Often times the contract will spell out the manner in which disputes will be resolved.
- Some schools provide a section for a parent to indicate a billing address if it is different than the parent’s mailing address. This section is designed to accommodate those contracts paid by a business manager, grandparent, or other family member.
- The contract requires the signature of one or both parents, the date of signature, and frequently the parents’ social security numbers as well.
- Some contracts include a clause that gives permission for the student to participate in field trips and other activities, and that the school is held harmless for any injury sustained in the course of the field trip or other school activity.
Is your contract generic in nature with the calculation of tuition and applicable fees handled separately, or does your signed contract include the details of the parent’s financial commitment for the coming year? Why have you chosen this approach?
Most schools include detailed tuition and fee information in their contracts. Schools that have taken this approach do it to minimize the chance of any misunderstanding or misinterpretation of the total charges and the applicable monthly payment. One school noted that it had encountered difficulty in the past as tuition assistance and remission are not applied to ancillary fees like supply fees, and that spelling out the details of all charges on the contract helps to make this clear.
One school surveyed has parents sign a generic contract at the time of re-enrollment in January. Later in the year when all adjustments to the tuition contract are known for items such as tuition assistance, remission, lunch fees, trip fees and so on a detailed list of all charges and credits and the amount and timing of all payments is sent to the parents. This approach provides the moment of financial clarity achieved by schools that include this information in their contracts, but also significantly reduces the amount of follow up work that goes on in the business office.
For three sample contracts which illustrate the various points made above see: Sample Contracts.
Have you made any changes to your tuition contract in the last three years? If so, what changes have you made and why?
Most schools reported making very few changes to their contracts in the past few years. However, three changes were called out as being important improvements to schools in the survey:
- One school made a significant change at the recommendation of the school’s attorney. It was to add language that states that the school reserves the right to cancel the tuition agreement at any time.
- Another school changed the due date for its first payment from June to May. This change was made at the request of the school administration to help clarify parents’ intentions for the coming year prior to school being adjourned for the summer.
- A third school added language stating that the school will be held harmless for any injury incurred on a field trip or other school activity.
- Editor’s Note: Some schools outside the study have reported the addition of a blanket photo release in their contract, easing the school’s ability to include photos in promotional materials and on the web.
What process does your school use to decide on any proposed changes to the tuition contract? Who is consulted, who decides, and who is advised?
One school reviews its contract each year in September at a meeting which involves the business manager, the enrollment director and the school registrar. Any recommended changes are shared with the full administrative staff for input and adjustment. Any changes to language, no matter how small are done in conjunction with the school’s attorney. Most schools permit the Business Office or administrator to make changes to contract language without Board approval. Some schools require the partnership of the finance committee or the school steering committee prior to making contract changes.
Changes in tuition amounts typically require Board approval, as would a proposal to change the finance charge amount assessed on delinquent accounts or to change the payment schedules. Minor changes such as increases in sports fees and musical instrument rental fees are worked out between the Business Office and the person with primary responsibility for the affected area such as the athletic director or the music teacher.
Describe the key elements of your school’s philosophy in relation to its tuition contract.
The nature of the financial agreement between the school and the parents is an important one, and as a result the school administrator or bookkeeper has a personal conversation with every new family to review the contract. This human interaction is important and is one of the reasons that the school has had little bad debt - there is no question about whether a family fully understood its financial obligations prior to signing the contract. A personal meeting is also held in situations where there are special circumstances - parents who have had payment difficulties, in cases where there has been a large change in the grant amount or where there are other big changes in a family’s life.
It is important to memorialize the exact terms of the payment arrangement in the contract. This puts the responsibility on the parent.
The school is willing to work out personalized payment terms if this is a need of a family. This willingness to work with individual families comes out of the school’s commitment to ensuring that Waldorf education remains an option for middle and lower income families.
The school is making a real and serious commitment to educate the children in its care, and expects parents to also take this seriously and make a real commitment. The formality of the Tuition Agreement underscores the seriousness with which the school perceives this mutual commitment. There is a lot of planning and preparation that goes into offering a class to students, and parents need to meet this with an equal level of responsibility on their end.
The school is diligent in its efforts to avoid having students who are in attendance without a signed contract. This requires strong work by the registrar including the taking of daily attendance and ensuring that paperwork is complete at acceptance.
In order to be able to properly plan for personnel and physical resources the school needs a good idea of what enrollment will be. This contract requires a firm commitment by the parent for the coming year so that planning can be done in a timely way.
The contract provides the school with protection.
It makes clear that both the parents and the school know what they are getting into. In particular it spells out the tuition refund plan, sibling discount and other areas that may be confusing to parents.
The contract is in straightforward language as much as possible so that the parent is clear on what the contract requires. We try to keep legalese to a minimum.
The contract clearly outlines the financial obligations of the family to the school. We want to make sure that families understand what they are signing up for.
The contract should only include items that the school is willing to live up to. Schools should not include clauses or remedies that they are not willing to enforce so that they can use them “just in case we want to some day”.
Be diligent about the contract process. Students cannot be in the classroom if a contract hasn’t been signed.
The contract is an important legal document. Be sure that your contract is regularly reviewed by an attorney. It is critical that the contract be enforceable if it is presented to a court.
The content of the contract should help explain what happens when things don’t work out. The contract is an important collection tool that must stand up in court.
Make it readable (i.e. “easy” English), and print it in a reasonable type size.
The contracts represent a sizable financial asset for the school and should be treated accordingly. They should be scanned to disc and stored in a secure place.
The contract outlines the school’s agreement to provide educational services and also spells out the parent’s obligations in return for this service.
Signed contracts are an important number to track year over year for enrollment projection purposes. This projection is a main driver in finalizing the budget.
What about your tuition contract is particularly effective?
The document has been held up in court as enforceable.
The credits for tuition assistance and/or remission are clearly spelled out.
The effect of meeting with the parent and working with him/her to ensure that there is a real understanding of the commitment that is being made is the most important aspect of the contract, far more so than the actual legal terms of the contract.
While the contract may not look pretty with all of the special terms and conditions handwritten onto the document, this homey handmade touch reflects the individualized attention and care that school gives each family. The parents seem to truly appreciate and respect the school’s ability to meet them where they are financially.
The contract has a strong impact on new parents. When they read the contract and understand that this is a full year obligation and that the deposit is non-refundable it can provoke a number of important questions that are critical for parents to understand.
It’s very clear and straightforward. We get few questions from parents asking what something means.
The tuition contract spells out the details of the financial commitment.
The contract is straightforward. There isn’t a lot of legalese and it’s printed in a legible type size. We never hear from parents who are leaving the school that they didn’t understand some aspect of the contract.
If there were something you could change in relation to your school’s tuition contract, what would it be and why?
We are generally happy with the contract as it stands. We have discussed the possibility of adding language that allows the school to reconsider the amount of a tuition assistance grant if the family’s financial circumstances change, and that the contract may be revised in this case.
The contract isn’t beautiful, and could use some improvement visually.
The school revises the contract annually to meet any emerging needs.
It would be beneficial if we added some personal contact time when the contracts are submitted, just to make sure everything is complete and that parents fully understand their obligations. Today many parents just mail in their signed tuition agreement at re-enrollment time.
We are looking at some changes that would provide us with additional flexibility and protection in dealing with student and parent behavior problems and student dismissal.
We appreciate the clarity that the financial details on the contract bring to the parent’s payment commitment. However, we are wondering if there is another way to ensure this clarity while using a more generic contract that is signed at the time of re-enrollment. Today the school has to follow up with parents twice - once on re-enrollments and once on contracts. It would be a real time saver to only have to go through this process once.