School Fee Debt Recovery

The Situation

AMPAC’s client is a fully accredited higher education provider in the Perth CBD. The college is ‘not for profit’ and as such does not receive any government funding, which means its operations are entirely funded by the payment of tuition fees.

The college was referred to AMPAC by another private school client, to assist recovering a number of overdue debts. AMPAC was engaged in late April 2020 and tasked to recover 21 accounts, totalling approximately $80,000.

School Fee Debt Recovery

The Collection Process

AMPAC assigned the College’s overdue debts to one of its account managers who specialises in the recovery of fees in the education sector. Immediately upon receipt of the debts, the account manager issued demands for payment, which in most cases are issued via email and contain a hyperlink to AMPAC’s payment portal. This enables the debtor to pay or part pay the debt, or establish an agreed payment plan. If the debtor does not pay or make contact with AMPAC within 48 hours, the account manager makes contact via telephone to confirm receipt of the demand and seek the debtors intention to pay. The phone demand is an important step in the recovery process, as it often identifies the reason for non-payment which in certain cases, is hardship in one form or another. 

Dealing with Hardship

Colleges and other educational institutions are particularly sensitive to issues of genuine hardship. Hardship may present in a number of forms such as financial hardship due to the loss of income, or a medical issue within the family that was not known to the school. In these situations, AMPAC obtains a detailed picture of the family’s unique circumstances and capacity to pay, then acts as a liaison point between the family and the college, and establishes and manages a mutually agreeable payment arrangement. Managing hardship, particularly through COVID-19, is becoming more frequent, but is something AMPAC is well equipped to do.   

The Challenges

Unlike other commercial debts, colleges are small communities of their own, and once word gets around the student body that the college is not serious about recovering fees, it spreads quickly and soon more and more students fall behind with their fees. Many colleges offer an environment of ‘pastoral care’ which in some ways is in contrast to the concept of running a business, however colleges and other educational institutions are just like any other business when it comes to cash flow.

The Result

Seven out of the 21 debts referred were paid within the first month. A further five were identified as cases of genuine hardship and are now on an approved payment plan, and the balance are in various stages of the recovery process. By engaging with AMPAC, and commencing recovery action, the college has significantly improved its position in terms of overdue debts, and released their staff from the often thankless and unpopular task of chasing payment.

For advice on anything to do with school fee debt recovery, call AMPAC on 1300 426 722 or contact us using our contact form.

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