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SCORES of executives have had to pull their children out of private schools following the failure by many companies to continue paying school fees for their employees’ children due to the prevailing financial dire straits. With many companies suffocating under the yoke of financial difficulties, chief among them high production costs, many employers have found themselves with no choice but to trim the frills from perks.

While several companies still extend this to their employees, there are others that have yanked this benefit from executive perks. “Companies are going back to the fundamentals, and one such fundamental is containing costs,” said Hlanganiso Matangaidze, president of the Zimbabwe National Chamber of Commerce.

“Our salary structures are neither conducive nor sustainable for business. And school fees benefit is a major component of the costs. Naturally, many companies are unable to continue paying that.” According to Matangaidze, the fact that tuition for private schools has continued to rise unabated has exacerbated the situation.

“School fees has been going up unabated and for people to transfer that burden to companies that are already struggling becomes impossible,” Matangaidze said. “While some companies are still doing well, many companies are not. In a bid to control costs, these struggling companies then look for what it is they can remove from the employees perks.” A parent with a child from one of the Association of Trust Schools in Harare, who is privy to the goings on, told the Financial Gazette that the situation was really dire.

“Things have really become difficult,” he said, speaking on condition of anonymity. “Most of these schools because of the (exorbitant) fees have payment plans which parents can take aantage of. I can tell you that the number of parents on these plans is increasing and that the rate of default is shocking. Most parents are not able to stick to the arrangements.”

Although the Financial Gazette was not able to get overall figures from an aerial perspective of the private schools in general, schools the newspaper spoke to confirmed that scores of parents were finding it difficult to cope resulting in defaults and piling up and carrying over from one term to another of outstanding fees, which the school authorities then mete out penalties and interests on.

The Financial Gazette understands that many of the private schools charge anywhere between US$1600 to US$4000 a term for a pupil. And to enter into a payment plan attracts an administrative fee of US$100 for most of the schools. While the bulk of the schools do allow for payment plans, the Financial Gazette understands that there are a few of the schools in the northern suburbs that have banned payment plans.

Where the latter has been the case, a source said some parents then borrow from banks to enable them to make a once off payment and then make arrangements with banks to pay off the loans in instalments. “However, for those parents who do this, they have been challenges in paying back the banks,” the source said. In addition to defaults, there are also rampant drop outs, the source said.

While many of the parents would pull out their children and enrol them in government schools, which are far less expensive, other parents found that they would have to enrol their children in colleges that have been mushrooming across the country. “The worst part is that, with where things are going economically, this will continue to go on. More and more parents will be affected,” the source said.

An administrator with one of the private schools in the capital said it was not only those pupils whose parents’ employers have scrapped off payment of fees as a perk that were affected by the inability to pay fees, but even those whose parents have lost employment altogether. “There are also those children whose parents have been retrenched from work. These also find that they are no longer able to continue on in private schools,” said the administrator.

It is not only private (or trust) schools where pull outs are occurring. Even mission schools are finding that some parents are failing to cope. A single mother from a suburb in Harare having found herself out of employment had no choice but to pull her son out of school and for a term, the boy was out of school as no ready option of alternative enrolment presented itself. It was only after a whole term of staying home that a vacancy at an out of town school presented itself.

Source : Financial Gazette

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