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Old 08-08-2020, 12:29 AM
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Default 2020/2021 Tuition Deposit

Hi All,

I’m trying to get a sense check on if I am being reasonable or not.

We had our child signed up to a Montessori preschool last year and then also for 20/21. The home learning was a bit of a disaster and the Director/owner wouldn’t offer any tuition refunds or rebates on either tuition or after school programs when other parents politely enquired. We were fine with this given we wanted to support the school community but have subsequently learnt that the director furloughed the staff from end-March which left us uneasy since they were not paid as was implied to all parents.

We were told in June that whilst plans were still being made for 20/21, she did no:

A) the price would be increasing.
B) the hours of in person school would reduce from 15 to 12 with one of the days being remote.
C) if there were any closures in 20/21 there would be no refunds and it was an all or nothing approach for the year.

We’ve further learnt that she has obtained a PPP loan in June and so this irritates us even further with respects to 20/21 flexibility around tuition refunds if we end up home for 3-4 months again.

We have decided not to send our child since it looks very different to what we signed up for.

She has to reduce her class size from 28 to 20 students.

Given the schedule of payments we had paid a “non-refundable Tuition deposit” $1,000 and the a further ~$3,500 tuition.

She is refunding the $3,500 but saying that the deposit is non-refundable.

Given that the conditions of the service contract - namely the price, and service/hours being provided have changed are we able to get the $1,000 back?

Thanks!
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  #2  
Old 08-08-2020, 01:42 AM
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Welcome to the forum. Did your contract or handbook have a refund policy?

Last edited by Michael; 08-08-2020 at 01:44 AM.
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Old 08-08-2020, 05:40 AM
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Thanks Michael:

There is no refund section per se but there is the below:

Withdrawal Policy

The $1,000 tuition deposit and $150 enrollment fee are nonrefundable once paid.

Enrolled students for the upcoming September school year may withdraw at any time before the preceding April 1 without being held responsible for future tuition payments specified in the Enrollment Agreement. If a student withdraws between April 2 and August 1 preceding the school year, payments made prior to the withdrawal date are nonrefundable, but families will not be held responsible for future tuition payments specified in the Enrollment Agreement. If a student withdraws on or after August 2 of the school year, payments made prior to the withdrawal date are nonrefundable AND families will be held responsible for future tuition payments as specified in the Enrollment Agreement UNLESS The school is able to fill the vacated spot with a suitable candidate that meets the admissions criteria. Admissions decisions are made at the sole discretion of The school.
.
When withdrawal is due to a medical condition or diagnosed developmental delay, the Director may return, at her discretion, a portion of the tuition paid. If a family unexpectedly relocates to an area 20 miles or further from The school the Director will evaluate the circumstances and may return, at her discretion, a portion of the tuition paid provided The school is able to fill the vacated spot with a suitable candidate that meets admissions criteria. (This is generally easier to do earlier in the calendar year, so please let us know as soon as possible if you will be moving.) Admissions decisions are made at the sole discretion of The school.
“Phase-In” is the term used in Montessori schools to describe the initial orientation phase of each school year.

The phase-in period is one of the most important aspects of the program and sets the stage for a successful year. The September phase-in period is intended to prepare children for the remainder of the school year. It is not intended for use as a short-term program option. If a family has indicated an intent to leave the program (or is aware of a pending relocation out of commuting distance to The school) that will occur prior to October 31 of the school year, the child is not eligible to attend The school. In such cases the terms of the enrollment contract will dictate the obligations of The School and the family.
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Old 08-08-2020, 01:37 PM
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I believe she is within her contract to keep the $1000. You could always bring it to small claims court but I think the judge will counter that you signed and agreed to the arrangement, and deny relief.
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Old 08-08-2020, 06:11 PM
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Thanks Michael,

I really appreciate you taking the time to look at this.

I wasn’t sure if I was reading this correctly but my thoughts would of been that if we were simply pulling our kid in a normal year I would completely agree.

I just thought it might be different in this situation given the Director is changing the terms of the original contract:

- price is increasing ($14k vs $11k).
- hours stipulated in contract are changing Mon-Thurs 9-12 rather than Mon-Fri 9-12.
- no services have been provided since it starts in September.

Isn’t this a contract modification/amendment?

We’re not looking to make money out of this but simply to be put back into the position we were in prior to the contract breach (e.g get the deposit back).

There is also the point that the school has to reduce the size of the class from 28 to 20 students. So there are a number of other parents in a similar situation who simply want to be made whole after the Director has changed the terms of the contract without our consent.

This is not my specialist subject and so I’d love to see if you or any others read the situation.

Thanks again!
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Old 08-08-2020, 06:23 PM
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Thanks Michael,

I really appreciate you taking the time to look at this.

I wasn’t sure if I was reading this correctly but my thoughts would of been that if we were simply pulling our kid in a normal year I would completely agree.

I just thought it might be different in this situation given the Director is changing the terms of the original contract:

- price is increasing ($14k vs $11k).
- hours stipulated in contract are changing Mon-Thurs 9-12 rather than Mon-Fri 9-12.
- no services have been provided since it starts in September.

Isn’t this a contract modification/amendment?

We’re not looking to make money out of this but simply to be put back into the position we were in prior to the contract breach (e.g get the deposit back).

There is also the point that the school has to reduce the size of the class from 28 to 20 students. So there are a number of other parents in a similar situation who simply want to be made whole after the Director has changed the terms of the contract without our consent.

This is not my specialist subject and so I’d love to see if you or any others read the situation.

Thanks again!
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Old 08-09-2020, 08:56 AM
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Quote:
Originally Posted by mrjones View Post
Thanks Michael,

I really appreciate you taking the time to look at this.

I wasn’t sure if I was reading this correctly but my thoughts would of been that if we were simply pulling our kid in a normal year I would completely agree.

I just thought it might be different in this situation given the Director is changing the terms of the original contract:

- price is increasing ($14k vs $11k).
- hours stipulated in contract are changing Mon-Thurs 9-12 rather than Mon-Fri 9-12.
- no services have been provided since it starts in September.

Isn’t this a contract modification/amendment?

We’re not looking to make money out of this but simply to be put back into the position we were in prior to the contract breach (e.g get the deposit back).

There is also the point that the school has to reduce the size of the class from 28 to 20 students. So there are a number of other parents in a similar situation who simply want to be made whole after the Director has changed the terms of the contract without our consent.

This is not my specialist subject and so I’d love to see if you or any others read the situation.

Thanks again!
So you want to be back in same position you started in but aren’t seeing that it’s not possible for the school to do the same? The school CANNOT go back to 28 students and is forced to reduce class size (reduced income).

This pandemic is financially hard for everyone... I’d say a bit of compromise is warranted... you were able to get a refund for the $3500.

I’d say you’re luckier than a lot of others on BOTH sides of this. So many child care programs have been financially obliterated during this pandemic.

I guarantee in years to come there will be major struggles to find quality care at all.
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Old 08-09-2020, 02:17 PM
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1. I can guarantee you that your preschool lost money, even with families that still paid last Spring, hence why they likely had to lay off employees.

2. The PPP has perimeters for the applicants. IF they get forgiveness (and there's still LOTS of uncertainly around that), there are specific things we need to spend that money on or it won't be forgiven. So essentially... a loan. A loan we pay back with interest. Any grants also affect how much can be forgiven and will be taken out of the forgiveness portion.

3. The reason business state "no refunds" on those deposits is because usually, that money is already spent and allocated the moment you enroll.

4. Every business is doing what they can to survive this pandemic. A lot of us are dropping like flies because just as YOUR overhead has changed (groceries/supplies, utilities, insurance) has gone up over the past few months... ours have doubled with cleaning requirements and supply shortages (and price gouging). Your school likely is REQUIRED to minimize the amount of students in a classroom as well as amp up their sanitizing schedule daily. So that smaller classroom size and larger rate is likely because of this.
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Old 08-09-2020, 07:09 PM
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Thanks Snowmom and Blackcat for taking time and providing a different perspective.

I fully agree with sentiment of both of your posts. Apologies if I am miss representing but “times are tough for everyone and we should be doing everything we can to rally around small businesses and support our communities”. We agree, and are simply choosing to send our child to a different local school that we feel is better aligned with our values. It actually costs more.

I do however disagree with some of the comments around the equitable sharing of hardships both day-to-day and financially.

Perhaps if I provided some background for context. The school is run from the Directors home and is well established having been operated for close to two decades. The home is the principle primary residence and is worth ~$2m and was originally purchased for ~$450k. I estimate the net income of the business to have been ~$130k pa and the household income is 2-3x that amount (non education related).

My issue originates from March. Tuition fees were never mentioned in any corespondents, after a brief hiatus of a week or two, a daily 20 minute pre-recorded YouTube video was provided. This was not a substitute for ~18 hours of face-face learning and lagged the offering of peer schools in the region.

Parents were led to believe that we were “supporting” the school community. No other parents at the school to our knowledge are aware that the teaching assistants were let go without pay. Given all tuition and additional fees for after school programs were paid in full by every parent (Prior to COVID),, with minimal rent overheads and the main variable cost component of teaching staff quickly cut to zero, and auxiliary variable costs such as materials, cleaning and snacks cut to zero I would suggest that 2019/2020 academic year ended up in an additional profit of >$30k above budget. As I say, all other parents are of the believe that teaching staff were paid throughout this period after it was implied in correspondents.

Parents have been told that the school was not eligible for PPP and we needed “to rally around our small community” but basic forensics have shown that the school received a loan of ~$40k. To our knowledge no other parents are aware of this either. My assumption is that this will be paid to pay the teaching staff on the return in September through until December. I would assume the Director also pays themselves a salary and so that could be utilized to some degree to account for the 60%.

The message is that if you agree to send your child next year there will be no refunds under any scenario (3-6 month lock downs, further government support packages etc.). So her tuition fees/revenues become guaranteed at that point.

Due to regulations, the school does have to reduce numbers resulting in an $88k reduction in revenues but higher fees for the remaining students help offsets this.

My issue is that the lack of transparency and constant “we’re in this together” comments are misleading. The financial and service risks have instead been put on parents.

If I do some high level (and overly simplistic math):

Lost revenue = - $88k
Higher revenue/head in 20/21 = + $60k
Lower costs (Apr/May) = +$30k
PPP = + $40k (Assume will use 60% on “staff” somehow)
Withheld deposits = $8k.

Whilst there will be higher costs associated with operating on 20/21, she will be running for a day less and so cutting all variable costs (inc. staff) by 20%.

I’m the first to admit that this costing will be overly simplistic and naive but directionally, the schools cab flows look protected.

Additionally, IF/when another lockdown occurs then benefits accrue to the school.

As I say, we have no issue with supporting businesses and small schools; we will continue to support others. Our issue is the lack of transparency and equitable sharing of financial and day-to-day challenges.

My sympathies go to childcare facilities that really are struggling. My view is that this is not the exact situation here.

Hence my unwillingness to simply donate $1k.
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Old 08-09-2020, 08:41 PM
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Honestly, at the end of the day your only recourse would seem to be taking this to small claims court. She's said she's not refunding your $1000. If you want it back you're going to have to ask a judge to order it.
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Old 08-09-2020, 08:57 PM
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Replied in red.
Quote:
Originally Posted by mrjones View Post

I fully agree with sentiment of both of your posts. Apologies if I am miss representing but “times are tough for everyone and we should be doing everything we can to rally around small businesses and support our communities”. We agree, and are simply choosing to send our child to a different local school that we feel is better aligned with our values. It actually costs more.

I do however disagree with some of the comments around the equitable sharing of hardships both day-to-day and financially.
I also don't agree with an "equitable sharing of hardships" in any form. That was not the basis of my own points above.
Perhaps if I provided some background for context. The school is run from the Directors home and is well established having been operated for close to two decades. The home is the principle primary residence and is worth ~$2m and was originally purchased for ~$450k. I estimate the net income of the business to have been ~$130k pa and the household income is 2-3x that amount (non education related).

I'm sorry, but I fail to see how this is relevant in any way. If the director proved your home had equity or that you made money outside of your regular employment, would it prove she should charge you more? No.
But I applaud the director for being in business for 20 years. They must have a solid understanding of how to run a business effectively and draw interest to the need in their area.


My issue originates from March. Tuition fees were never mentioned in any corespondents, after a brief hiatus of a week or two, a daily 20 minute pre-recorded YouTube video was provided. This was not a substitute for ~18 hours of face-face learning and lagged the offering of peer schools in the region.
I am assuming you brought your dissatisfaction to their attention. If they were mandated to close, which I believe MA was, then I assume they stuck to their contract in regards to payment requirements. As most businesses do/did. Many also have clauses to cover emergency closures. So, you may want to refer to that as well if you are seeking reimbursement.

Parents were led to believe that we were “supporting” the school community. No other parents at the school to our knowledge are aware that the teaching assistants were let go without pay. Given all tuition and additional fees for after school programs were paid in full by every parent (Prior to COVID),, with minimal rent overheads and the main variable cost component of teaching staff quickly cut to zero, and auxiliary variable costs such as materials, cleaning and snacks cut to zero I would suggest that 2019/2020 academic year ended up in an additional profit of >$30k above budget. As I say, all other parents are of the believe that teaching staff were paid throughout this period after it was implied in correspondents.
I wouldn't assume to know another business' profit/loss. There are too many variables to be black/white. Unless you are a stakeholder or non-profit, this information shouldn't be assumed or available for public info.
Just to point out: many businesses purchase curriculum in bulk, supplies in bulk, yearly subscriptions, etc. These expenses didn't stop nor were they refunded March-June.
In regards to meals/snacks: they have likely always been partially paid by the food program, which is based on actual daily attendance.

I also assume the teachers were likely on unemployment. Possibly even making the $600/week federal bonus. It may have been better for the employees to let them do that. Their insurance may possibly have been retained/pd by the business account?


Parents have been told that the school was not eligible for PPP and we needed “to rally around our small community” but basic forensics have shown that the school received a loan of ~$40k. To our knowledge no other parents are aware of this either. My assumption is that this will be paid to pay the teaching staff on the return in September through until December. I would assume the Director also pays themselves a salary and so that could be utilized to some degree to account for the 60%.
Many of us were initially told we weren't eligible by our banks. There were stipulations put forth that made it near impossible for small businesses to apply in the beginning. Luckily, the availability changed as time went on. However, I find it really odd that this makes a difference to you. If they acquired the funds legally, it really shouldn't be any of your business quite frankly. The business is responsible for the allocation of funds. The business is the one who is responsible for the payback- not the customers. The small influx of cash (PPP and SBA) will hopefully benefit the business in the long run to get through the lack of enrollment due to Covid in the upcoming year. It's going to take it's toll, whether you think it has or not.

The message is that if you agree to send your child next year there will be no refunds under any scenario (3-6 month lock downs, further government support packages etc.). So her tuition fees/revenues become guaranteed at that point.
Smart!
Due to regulations, the school does have to reduce numbers resulting in an $88k reduction in revenues but higher fees for the remaining students help offsets this.
Smart!
My issue is that the lack of transparency and constant “we’re in this together” comments are misleading. The financial and service risks have instead been put on parents.
I disagree that it's been put upon the parents. You always have a choice. You chose to leave. Totally understandable. That works for you.
If I do some high level (and overly simplistic math):

Lost revenue = - $88k
Higher revenue/head in 20/21 = + $60k
Lower costs (Apr/May) = +$30k
PPP = + $40k (Assume will use 60% on “staff” somehow)
Withheld deposits = $8k.

Whilst there will be higher costs associated with operating on 20/21, she will be running for a day less and so cutting all variable costs (inc. staff) by 20%.

I’m the first to admit that this costing will be overly simplistic and naive but directionally, the schools cab flows look protected.

Additionally, IF/when another lockdown occurs then benefits accrue to the school.

As I say, we have no issue with supporting businesses and small schools; we will continue to support others. Our issue is the lack of transparency and equitable sharing of financial and day-to-day challenges.

My sympathies go to childcare facilities that really are struggling. My view is that this is not the exact situation here.

Hence my unwillingness to simply donate $1k.
What this boils down to:
If you really feel you're entitled to your deposit back, ask for it. If they say no, refer to your contract. The contract is what a court of law is going to care about. All those numbers you assumed above are not facts. Those numbers are what you assumed the business made during relief efforts. But they will have no bearing on what the contract you signed enforces.
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