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A family with children at a Melbourne private school is facing a legal battle over almost $300,000 in unpaid school fees, as cost-of-living pressures raise concerns that more families will be pushed to the brink.

Leibler Yavneh College, a Modern Orthodox Jewish school in Elsternwick, has filed court action against the parents of three children currently at the school whose fees have allegedly not been paid since 2019.

Leibler Yavneh College is suing a family for $300,000 in unpaid fees.Credit: Penny Stephens

In documents filed in the County Court, college lawyers said the parents – whom The Sunday Age has chosen not to name – refused or neglected to pay a debt of $298,839, which was a breach of their enrolment agreement.

The board of Leibler Yavneh College declined to discuss the case but said in a statement that the school was passionate about Jewish children having the right to a Jewish education.

“Given this, we maintain a compassionate, robust and confidential fee-assistance program to support parents in paying their child’s tuition,” the board said.

“Any step we take to recover outstanding debt owed to the college is done as an absolute last resort.”

The family at the centre of the case said it was a stressful time but declined to comment further on the legal matter.

Court filings show the family has had children enrolled at the school since 2012, with fees billed quarterly and due at the start of each term.

The family allegedly stopped paying in July 2019, and in May this year, Leibler Yavneh College demanded payment.

Federal Court records show at least two other people have been tipped into bankruptcy by Leibler Yavneh College since 2018, and another was taken to court in 2013.

Supreme Court of Victoria documents reveal that Ruyton Girls’ School also pursued a father for $31,474.53 of unpaid school fees this year.

Credit Clear debt collecting agency chief executive Andrew Smith, whose business handles accounts for 30 of Melbourne’s private schools, said 250 “active Victorian accounts” had been referred to it, totalling about $3 million in debt.

Of those, 70 accounts had progressed to legal recoveries, with legal action being more frequent now than last year.

He said $300,000 in outstanding fees was an extreme case.

If schools let families accumulate such a large debt, they were “taking on a bit of that responsibility by allowing those students to continue”, Smith said.

He said that most of the school fees cases he handled were for amounts between $5000 and $50,000. Common reasons for overdue accounts were divorce, business closure, parents moving a child out of school and parents who disputed owing school fees.

Credit Clear co-founder Lewis Romano, left, and CEO Andrew Smith.

“There’s a similar amount of customers or students that have been referred to us [compared to previous years],” he said. “What we’re seeing is a dramatic uptick in the value of the debt.”

Smith believes some schools might have held onto debt longer because of the COVID-19 pandemic. “And now they’re saying, well, we can no longer work with those parents. We need to do something with it.”

He said administrations and liquidation had spiked dramatically. In Victoria, there had been a 39 per cent increase in cases to 1476 in the financial year ended June 30, compared to the previous year.

For business owners with children in private schools, this was contributing to the default in payments, and would only continue.

The pressure on parents and schools is about to compound as 60 of Victoria’s highest-fee schools pay the state government’s payroll tax from next year, leading some schools to raise fees.

At Geelong Grammar School, Victoria’s most expensive private school, fees increased 8 per cent for 2024 to $84,240 for full-time year 12 domestic boarding students.

At Caulfield Grammar, fees have risen to $40,543 for year 12 students, and fees are $40,053 at Wesley College – a 6.75 per cent jump.

Smith believes that with such high fees, parents could quickly end up with large debts if schools did not intervene early.

Only schools with fees higher than $15,000 a student are subject to the tax. Leibler Yavneh College is not subject to payroll tax.

Independent Schools Victoria chief executive Michelle Green said fee increases were an inevitable and an entirely predictable result of the “unprecedented imposition of payroll tax on non-government schools”.

She said many schools affected would increase fees between 3 and 5 per cent to cover the cost of the tax on top of any other fee increase unrelated to the tax – possibly 4 to 5 per cent.

She said schools had ruled out cutting staff and education programs to minimise negative effects on students.

“In reluctantly increasing fees, they have taken account of cost-of-living pressures on parents who make significant sacrifices to educate their children in a school that matches their needs,” she said.

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