Now that independent schools are well into the 2024-2025 school year, independent schools are turning their attention toward enrollment and re-enrollment season for the 2025-2026 school year. Before issuing enrollment contracts, independent schools would be wise to review and fine-tune their enrollment contracts with an eye to issues that arose in years past to ensure that those most pressing issues impacting the relationship between the school and its enrolled families are contemplated. Below we have summarized several key issues to be assessed in reviewing independent schools' enrollment contracts.
Parental Consent for Use of Third-Party Programs, Apps, and Online Services
The Children's Online Privacy Protection Act (COPPA) requires operators of programs, apps, or other online services directed to children to obtain parental consent for use. Currently, COPPA parental consent requirements generally do not apply when a school contracts with operators for online programs that are designed solely for the use and benefit of the school, such as "edtech" operators.
However, many edtech operators have included provisions in their vendor contracts requiring schools to obtain affirmative parental consent to their child's use of edtech resources. In order to ensure that this expectation is met, the enrollment contract should authorize the school to consent to the student's use of online services on the parents' behalf. An ideal enrollment contract provision should describe the types of online services accessible to students and provide a list of online platforms used by the school, as well as the terms and conditions/privacy policies of those platforms.
Cancellation Terms
A key component of any enrollment contract is a withdrawal or cancellation provision that details the school's ability to enforce the financial obligation in the event of a student's withdrawal or dismissal from the school after the contract is considered binding and before the end of the academic year. A well-drafted contract will clearly and unambiguously outline the circumstances under which the school will refund the deposit, refund tuition paid, and/or consider any waiver of the continuing tuition obligation (if any), consistent with the school's culture and existing policies.
If drafted appropriately, such contractual provisions can be considered liquidated damages clauses, providing for a previously agreed-upon amount that the parents agree to pay the school in the event of withdrawal or dismissal. However, such clauses must be carefully worded to comply with applicable state law, which may establish specific circumstances under which the provision will be enforced by the courts.
Separately, many independent schools recognized that there may be circumstances under which they would agree to provide a tuition refund, e.g., the family is required to relocated because of a parent's job change or extenuating medical circumstances affecting the family. Independent schools that have considered making exceptions to their policies regarding waiver of the outstanding tuition obligation should consider adopting an internally facing procedure that outlines the specific circumstances under which a tuition refund may be considered, and the process a family must follow to request an exception. Such a policy should not be included in the enrollment contract itself but should serve as an internal process document to ensure that the school is making exceptions in a fair and consistent manner.
The Truth in Lending Act
The Truth in Lending Act (TILA) is a federal law that was enacted, in large part, to protect the interests of borrowers entering into loans issued by creditors. TILA was not designed specifically with independent schools in mind; however, some of the common payment plans utilized by independent schools may trigger TILA's coverage.
Pursuant to the terms of TILA, independent schools are considered to have issued credit to a family when it allows a family to make tuition payments any time after the school begins to provide services to a student. Any deferment of payment for services rendered is considered to be an issuance of credit or lending, which is one way in which TILA can be triggered.
Specifically, if a family selects a payment plan in five or more installments or an independent school assesses a finance charge to utilize any payment plan, the school likely must comply with TILA.
Once TILA applies, the family selecting the applicable payment plan must be provided a TILA disclosure form "at or before the time of consummation of the Agreement." Schools that fail to comply with this requirement may be subject to monetary damages, costs, and reasonable attorneys' fees.
Consequences for Nonpayment of Tuition
Most enrollment contracts contain provisions describing the consequences for failure to make tuition payments in a timely manner. Such consequences typically include restrictions from attending class, taking exams, or participating in extracurricular school activities. Some independent schools also reserve the right to withhold student grades, transcripts, or recommendations in response to a failure to meet tuition obligations. Some states, however, prohibit schools (including independent schools, in some states) from withholding a student's transcripts under any circumstance. Accordingly, it is wise for independent schools to review their nonpayment of tuition clauses to confirm compliance with any state law requirements.
Parental Cooperation Clauses
An enrollment contract sets expectations for the relationship between schools and families and allows schools to take responsive action if expectations are not met. To address parent disruption to the school's operations and decision-making processes, it is wise to address, in the enrollment contract itself, the expectations for parent cooperation and the consequences when those expectations are not met.
For parental cooperation clauses to be effective, it is important to clearly describe the types of prohibited parental conduct and behavior, such as rude and/or aggressive language; disagreement or interference with the school's mission, strategies, policies, or delivery of its program; or behavior that threatens the health or safety of another school community member. The parental cooperation clause should also describe the range of consequences that the school may implement in response to a violation, including restrictions on the parent's involvement in school activities or access to the school's campus, or even dismissal of their student from the school.
Parent Signatures
As a general matter, a contract is only enforceable against the individuals who sign it. For this reason, it is best for both parents of a student to sign their child's enrollment contract, as it contains important terms and conditions that are intended to apply to both parents, including parental cooperation and behavioral expectations. However, actually securing both parents' signatures can be a more difficult task than it seems. Separations, divorce, and custody arrangements may dictate that one parent is primarily responsible for the selection of their child's school and/or payment of associated tuition and fees. In such cases, it is common for the non-financially responsible parent to refuse to sign the enrollment contract, which makes it difficult for the school to enforce non-financial terms against them, if it becomes necessary to do so.
Understanding that it is difficult to consistently secure both parents' signatures on enrollment contracts, schools may choose to address different signing scenarios that clarify each parent's custody arrangement and financial responsibility relative to the student to assuage parents' concerns about being held financially responsible for tuition payments, despite any custody agreement or court order to the contrary. Clarifying these important terms at the outset may increase the likelihood of securing both parents' signatures on the enrollment contract and will provide the school with necessary information regarding parental custody arrangements that may need to be addressed throughout the school year.
For parents signing on behalf of their spouse or co-parent, the contract should make it clear that the signing parent is authorized to sign on behalf of the non-signing parent, and that both parents are jointly and severally liable for tuition payments. By requiring the signing parent to represent that they have the authority to sign on behalf of the non-signing parent, the signing parent (and not the school) would be liable if the school later learns that the signing parent misrepresented their authority to bind the non-signing parent to the terms of the enrollment contract.
