In Perpetuity: Common Questions about Enrollment Contracts

In Perpetuity: Common Questions about Enrollment Contracts

by Debra P. Wilson, general counsel, National Association of Independent Schools (NAIS) and incoming president of the Southern Association of Independent Schools (SAIS)

As we once again enter into the most active time of the admission season, questions regarding enrollment contracts abound. On the one hand, it seems like this system should be as smooth and easy as possible for families and the school. On the other hand, administrators do not want to expose the school to unnecessary risks by trying to make things simpler. Here are answers to some questions that schools have around enrollment contracts.

reenrollment quoteMust both parents sign the enrollment agreement?

If you want to be able to enforce the agreement (and the terms within it) against both parents, the answer is yes. The enrollment agreement addresses things like financial responsibility, following the procedures and policies within the school handbook, giving permission for the student and/or their work product to appear in school marketing materials, and similar topics that help make the school year run smoothly. If both parents do not sign the agreement, it is only enforceable against whoever signed it, and the other can raise objections to actions the school takes.

What if the parents are divorced and one doesn’t want to sign so as not to be held financially responsible?

Some schools have developed agreements that leave out the financial obligations if they are sufficiently comfortable with the financial obligations being met by the other parent. These alternative agreements cover all of the other policy acknowledgements.

What if only one parent is enrolling the student?

Your school should have a policy related to when one parent can enroll a student. Some schools require that the parent show that he or she has sole or primary custody and has the right to make this decision without the other parent. Others take additional steps to be sure the signing parent understands the ramifications of the agreement and what will happen if the non-signing parent somehow manages to ensure that the student does not attend the school in the fall.

Are perpetual enrollment agreements a good idea?

Some schools have been moving to perpetual (or continuous) enrollment agreements, making the re-enrollment practice more of a subscription recommitment than an entire contract process. The original agreement has an “evergreen” clause that usually notes that the agreement will continue under certain circumstances, such as the school sending a renewal communication and the parent submitting a deposit.

Many schools have found that this process results in a faster return communication from parents and it eases the paper burden on the school. Schools considering this approach should work with legal counsel as there are some exposure concerns. Although the specific nature of the concerns depends on the intricacies of your school’s agreement and process, standard issues include whether such an agreement is even allowed in your state (particularly given the cost of the agreement) and if there are special obligations that the agreement must meet if you have such a contract (e.g., some states may require a clear and conspicuous notice of the evergreen language and lack of the language may result in a problem with enforcement later). You must also think through how any changes to the contract terms would be done and tracked if needed. Another common concern is whether your school agreement requires a Truth in Lending Act disclosure. These disclosures are required under some payment plan circumstances and would still need to occur even under this structure. You should also talk with the school’s attorney about any long-term enforcement issues that may come up. For example, if the parent signs the agreement when the student enters first grade, will there potentially be enforcement issues if something comes up as the student begins their senior year?

If your school is going to use a perpetual agreement, your other practices should be very dependable. As easy as it is for parents to forget what they originally agreed to, this process makes it easy for the school to get lackadaisical about reviewing its agreement or making needed changes. Further, the school’s notices of potential discipline issues or policy violations will need to be consistent and dependable as those kinds of notices and procedures will make enforceability issues more manageable.

How can electronic signatures help the admission workflow?

Many schools have found that simply moving to an electronic signature process made their enrollment and re-enrollment processes much smoother. Again, state law will require certain elements for enforceability, such as the parties agreeing to accept electronic signatures, certain disclosures, the signatures of all of the parties, and a clear and certain copy for both signors that cannot be altered. However, electronic signatures are generally acceptable across the country. They allow the school to easily update the agreement, make Truth in Lending Act and other disclosures as needed, and are easily tracked. Schools may want to consider this as an interim step before leaping into perpetual enrollment territory.

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