Debentures/capital levies charged by private schools - are they approved?
Updated: Apr 21, 2021
As a follow up to Part 1, written in January, we delve deeper into those school fees that ARE approved and those that appear not be approved.
We think it's high time that schools are held accountable to fee payers - ie parents - and not only the EDB to justify those fees that are approved and those that may not be approved.
What are the approved tuition fees?
To ascertain the approved tuition fees of any school, start here: https://applications.edb.gov.hk/schoolsearch/schoolsearch.aspx?langno=1
Here's a video on how to drill down to the information you need; the Fees Certificate:
For example, the Tuition Fees for Independent Schools Foundation Academy are here: https://applications.edb.gov.hk/schoolsearch/schoolfee/553190.pdf
At the end of every Fees Certificate, it is stated:
Unless otherwise permitted in writing by the Permanent Secretary for Education, no supervisor, manager or teacher shall charge or accept payment of any money or any school fees whatsoever other than the inclusive fees as above stated.
No additional fees for entrance examinations and registration may be charged from the supervisor, manager or teacher without the previous written approval of the Permanent Secretary for Education. Such approval must be kept conspicuously exhibited at a prominent position in the school together with this Fees Certificate.
Unless otherwise permitted in writing by the Permanent Secretary for Education, the inclusive fees for an educational course shall be calculated on an equal monthly basis and collected on or after the first school day of each month of the period during which the educational course is conducted.
Notwithstanding paragraph 3 above, a supervisor may require a pupil to register for an educational course by paying the first monthly instalment not earlier than one month before the commencement of the educational course.
The payment of every sum of money by or on behalf of a pupil to a supervisor, manager or teacher shall be forthwith acknowledged in writing by such supervisor, manager or teacher on a proper form of receipt.
No change in the inclusive fee shall be made without the written approval of the Permanent Secretary for Education.
Note: Attention is drawn to Regulations 60 to 65, 67 and 101 inclusive of the Education Regulations. [The Regulations (Cap. 279A) referred to are here: https://www.elegislation.gov.hk/hk/cap279A?xpid=ID_1438402923936_001]
So, do the schools have express written permission to charge additional fees?
Additional fees in the form of application/assessment fees for kindergartens came up in 2016. A report by the Ombudsman in December 2016 referred to those same Education Regulations printed above; that any fees in addition to those on the Fees Certificate must be approved in writing. At that time, the EDB were :
criticised for being too lax and for approving fees too often without any substantive justification provided; and
urged to formulate specific working guidelines for vetting and approving applications for collecting application fees above the ceiling in a strict, fair and just manner.
Kindergartens were urged to provide substantive evidence of the need to charge high application fees, to refund any overcharged (unapproved) amount to parents and be prevented from continuing to charge application fees that have not been approved.
All this in relation to application fees at kindergarten level ONLY and NO mention of any other fees charged.
2016 Report here: https://ofomb.ombudsman.hk/abc/files/DI373_full_E-19_12_2016.pdf
So nowadays, schools do seek - and are generally granted - approval for application fees. See Note 2 at the end of the Fees Certificate.
Also, in 2018, the Ombudsman said that some schools were given too much liberty to unreasonably raise tuition fees year after year, whereupon three schools were promptly denied their usual annual increase! Guidelines for schools on 'adjusting' their fees are here.
So what about all the other additional fees in the form of capital levies, debentures, etc.? These amounts routinely run into tens of thousands of dollars and even millions. If 'other' fees ARE approved, schools need to display approval letter conspicuously on campus. They also need to follow the schedule, rather than charging 'reservation deposits' or tuition fees months in advance. The schedule states:
Unless otherwise permitted in writing by the Permanent Secretary, the inclusive fees ... shall be ... collected on or after the first school day of each month of the period during which the educational course is conducted.
As we wrote in Part 1, the Hong Kong Government Ombudsman released a Direct Investigation Report into the EDB’s processes for approving fee changes, finding that:
in accordance with section 61(1) of the Education Regulations, all fees charged by a school need EDB approval; and
the EDB should establish a procedure for approval of “other fees” charged by schools (like debentures and capital levies).
Ike Kutlaca, education practice group leader from law firm King & Wood Mallesons, commented that “we’ve always advised our school clients that all fees need EDB approval – from the smallest administrative charge to the largest debenture. Once the Ombudsman started investigating, the EDB conceded that their past practice of considering debentures as a ‘private arrangement’ between schools and parents wasn’t in compliance with the regulations. The question that remains, though, is what level of rigour will the EDB bring to examining applications from schools that want to keep charging debentures or capital levies?”