Withholding Transcript for Non-Payment
When a parent refuses to pay their child's tuition, the
independent school often has little recourse other than to
withhold the transcript of the child's academic record until the
account is settled. Although there are no controlling statutes in
most states, some courts have litigated the issue of whether a
school can be compelled to release the transcript of a child
whose tuition has not been paid. The decisions in these cases
offer precautionary guidelines for independent schools that when
implemented can protect the ability to respond to delinquent
accounts.
In the New Jersey case of Fayman v. Trustees of Burlington
College, parents brought suit to compel the school trustees to
issue a transcript of their daughter's grades. The court found
that the parents' refusal to pay the tuition due was a breach of
the enrollment contract. In the absence of any unreasonable or
arbitrary action on the part of the school, the court felt it was
not in a position to force the school to release a transcript to
defaulting parents. The Fayman court further noted that
withholding a student's transcript is often a last resort for
independent schools to enforce the obligations due.
Notwithstanding the unpaid tuition, other courts have issued
injunctions requiring private schools to release transcripts
involving delinquent accounts. In January of 1993, the Court of
Appeal of Louisiana decided to force a private school to issue a
transcript to a student with unpaid tuition in the case of McKee
v. Southfield School. In this case, it was the student who
brought suit against the school seeking injunctive relief and
damages resulting from the school's refusal to release the
transcript. The headmaster at Southfield School had made several
unsuccessful attempts to bring the unpaid account up to date and
ultimately suggested to the parents that the school might ask for
the child's withdrawal. Nevertheless, the student was allowed to
complete the academic year.
The McKee court held that while the defaulting parents would
not have been entitled to the transcript, the student himself had
a right to his academic record. The court found that by allowing
the student to finish the year despite his unpaid account,
Southfield made an implicit guarantee to the student that he
would receive his academic credit, as well as documentation of
that credit in the form of a transcript. According to this court,
it would have been "grossly unfair" to withhold a
transcript where the student was allowed to believe that he would
receive credit for his attendance and completion of his
coursework. The court was also persuaded by the fact that the
enrollment contract did not indicate that transcripts would be
withheld for failure to pay tuition.
The contractual dealing between a parent and an independent
school generally will not implicate considerations of the child's
best interest. In all cases, courts will typically enforce the
clear and reasonable terms of the enrollment contract as written.
However, simple precautionary measures should be considered to
protect the independent school from being deprived of one its few
methods for recouping unpaid tuition:
Enrollment contracts should contain a standard provision
indicating that transcripts may be withheld for failure to pay
tuition.
School administrations would recognize that allowing a student
to remain enrolled when his or her transcript may ultimately be
withheld could weaken or negate the school's rights under the
enrollment contract. (ISACS Note: Often schools indicate in their
contract and enforce the stipulation that in the case of
non-payment, a student will not be permitted to sit for semester
exam(s)--typically the English exam--, thereby preventing the
claim that work has been completed and a transcript required.
Upon payment, the student would be allowed to take the exam,
complete his or her work and earn credits and transcript).
Where a student is asked to withdraw for nonpayment, the
independent school should recognize that it is under a duty to
take reasonable measures to mitigate the losses resulting from
the action.
ISACS would add to the legal counsel offered above that the
other side of the coin in such situations is the public relations
side: we should seek every avenue to achieve a win-win situation
(taking a promissory note backed by some asset and extending
credit over several months, if necessary) so that we achieve some
resolution that makes friends rather than enemies and that keeps
the issue out of the courts.
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Resource: David C. Landin, Laura A. Colombell, of the law firm
McGuire, Woods, Battle, & Boothe, Richmond, VA, 2/4/97.
