What you need to know about private school acceptance deposits

Private schools could be breaking the law through charging exorbitant non refundable acceptance fees

A Cape Town parent who complained about the R15 000 acceptance fee they had to pay to secure a spot for their child at a well  known private school has thrown the spotlight on the reasons for this payment and its legalities in South Africa.

What is it?

The acceptance deposit, originally originated from private schools wanting to prevent parents from applying to multiple schools and reneging at the last minute. This non refundable amount does not go toward school fees and it has become a norm  that is asked from parents.

What amounts are being asked?

In SA most private schools are said to be charging acceptance deposits of up to R80 000 per child. These deposits are not refunded should the family change their mind or if the child takes the spot, its not returned even once the child leaves the school.

What parents say?

“I’m having to pay a R17 000 deposit non refundable to to a private remedial school in JHB. It’s really a huge amount of money to have available in one shot.”

What the private schools say?

Independent schools association of southern Africa (Isasa) executive director Lebogang Montjane says, ” We don’t view these as problematic because they are viewed as upfront payments payable for children taking up spaces in a school . As such they are part if income. Once a place is secured for a child the school is notionally increasing its risk burden  in the allocation of a place and consequently turning away others.” “But each case must be evaluated on its own merits. If the cancellation is made well in advance and there is a high demand for a particular school, then a refund ( minus reasonable expenses and administrative costs) could be expected,” adds Montjane.

What does the law say?

“Schools cannot simply withhold deposits because the Consumer Protection Act (CPA) applies. If its a deposit to reserve a place, that would be considered an advance booking and if its cancelled prematurely, they would be entitled to deduct a reasonable cancellation penalty,” explains Rosalind Lake, a competition and consumer lawyer at Norton Rose Fulbright. Section 17 of the CPA says a provider ( a school) may take a reasonable deposit and deduct a reasonable cancellation penalty for a cancelled booking. They may not deduct anything in the case of death or hospitalization. The deduction has to be reasonable, dependent on the notice period, the potential of the service provider to find a replacement, and whether or not they have incurred any provable damages.

What does the consumer goods and services ombudsman say?

” Independent schools must comply with the CPA. This means they have to be transparent in terms of what it costs to administer an application and enrollment, and what the true loss to them is in the case of a cancellation, says Consumer goods and services ombudsman Magauta Mphahlele

 

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