Struggling to pay your child’s school fees due to salary cuts? Here are some options

Despite job losses or salary cuts, there are some expenses that many of us cannot curtail. Paying our children’s school fees is one of them. Mumbai-based Arjun Trivedi lost his job in a real estate consulting firm in May during the COVID-19 pandemic. His eight-year-old child’s school has demanded that he pay the entire fee of Rs 1.25 lakh upfront for the new academic year. Arjun echoes the pain of many parents who complain that their children’s schools are also asking parents to pay for the facilities the children are unlikely to use for a long time: transport, food, swimming pool, outdoor sports facilities.

Fortunately, some schools have stepped forward to offer financial relief to parents who’ve faced job losses or salary cuts. If you are parent facing a cashflow crunch and are faced with the burden of paying school fees, here’s what you can do.

Deferment in school fees

Schools such as SAI International Education Group have offered parents a chance to defer school fees till December 2020. This is just a moratorium; not a fee holiday. You still have to pay the fees in December as a lump-sum. Interest is waived. But at least it gives you a temporary breather till your financial situation improves. “All parents who have financial problems should apply to the school management for the deferment option to pay the school fees. The deferment in paying the school fee gives an immediate relief to parents,” says Bijaya Kumar Sahoo, Founder of SAI International Education Group.

To apply, you may have to submit an online application to the school or send an email. You may be asked to submit proof of a job or salary cut such as a termination letter or your salary slip.

Monthly installment option

Typically, schools charge the entire year’s fees upfront or at least at the start of every quarter as they need to maintain their existing facilities and grounds. Now, some institutions such as the VIBGYOR Group and Global Indian International School (GIIS) have been offering a monthly fee payment option. You will have to approach the school management via an email or online application to opt for the monthly installment option.

“As part of the GIIS solidarity scheme, we provided the option to pay the fee on a monthly basis, aside from no fee hike and waiver of transport charges, so the amount to be paid comes down substantially and this way the parents can easily pay the school fees,” says Rajiv Bansal, Director-Operations, Global Indian International School.

Apply for scholarship

Some schools offer scholarship programs to deserving children. This is not based on academic merit, but on parents’ financial standing in COVID-19 times. Bansal says, “Parents who are facing financial distress due to this pandemic, either in terms of a job loss, income loss, reduced salary or difficulty in paying fees, are encouraged to apply for the specially designed GIIS Resilience scholarship program. There are no charges for applying to this scholarship program.” As part of the application process, you have to just fill a form on the scholarship website and submit the relevant documents relating to job loss or reduced salary or loss of income.

Peshwa Acharya, Chief Marketing Officer, VIBGYOR Group of Schools says, “With the VIBGYOR EduBridge scholarship program, we are waiving the fees for up to three quarters, which is a fair amount of savings for parents”. In some schools, the scholarship is applicable only on tuition fees.

Certain schools such as Global Indian International School have extended this scholarship program to existing students and is also extending this benefit to new students seeking admission this academic year.

Global Indian International School also offers a two-year scholarship program from this academic year. In the second year, the management of the school will evaluate the impact of COVID-19 and recovery, and then decide on the quantum of relief percentage it wants to offer. The school will re-evaluate your financial or job situation then. If you’ve got a job or your full salary is reinstated, your child may no longer be eligible for the second year’s scholarship.

Zero-cost monthly installment options from fintechs

Podar International and Ryan International Group have partnered with fintech firm GrayQuest to offer parents an interest-free option of paying school fees in installments. The fintech firms such as GrayQuest, Financepeer pay your children’s entire year’s fees upfront to the school. All you have to do is pay the fintech an equal amount every month that totals up your child’s annual fees. You don’t have to bother about interest; the school takes care of it. For instance, if the annual school fee is Rs 1.20 lakh, you pay Rs 10,000 every month to the school. “If there is a cash crunch, it makes sense for parents to pay school fees in installments,” says Rishab Mehta, CEO of GrayQuest. “The school reaches out to all the parents after partnering with us and they can apply for this financial arrangement with a minimal set of documents – PAN, Aadhaar etc.,” says Sunit Gajbhiye, Co-founder and Chief Business Officer of Financepeer.

However, a spokesperson from a private school requesting anonymity says, “Due to the increased interest cost burden on the schools by partnering with fintechs, the schools might just subtly increase the fees or may recover this added cost from parents.”

What should parents do?

Continue paying your children’s fees, if you can afford to, provided your job is secure and you haven’t faced any salary cuts. Applying for scholarships and exemptions despite being financially secure may deny a genuine applicant the opportunity to benefit from such schemes. Also remember, schools need to pay salaries to their staff and maintain their property in time to take kids back, once the lockdown gets over. For instance, there has been no respite for Arjun. His child’s school has, in fact, threatened action if he doesn’t pay the fees on time.

But some schools are considerate. If you are facing a financial crunch, talk to your school management and see what it can do. Take your salary slips or termination letters with you to bolster your argument.

You can try and apply for a scholarship even if you opt for easy payment schemes. If the school management finds your application genuine, it could waive some part of the tuition fees.

If you opt for the zero-interest installment scheme, make sure you pay all your installments on time. Your school may hold back your child’s report card at the end of the academic year if you fail to do so. Also, the school may push the interest burden to you then.

Schools such as SAI International, VIBGYOR and Global Indian International offer a flat rebate on fees, of up to 15 percent, if you are willing to pay the entire year’s fees upfront.