An Administrator's Guide to California Private School Law

Chapter 13 - Student Applications And Enrollment Contracts

plan of a private school that charges interest or other fees or provides for more than four installment payments may be subject to the TILA’s general disclosure requirements. 2018 A TILA disclosure applies to plans that provide for more than four installment payments even if no additional interest or fee is charged for the installment payments under that plan. The issue of whether private schools must include TILA disclosures with enrollment contracts is currently unclear. The most conservative approach is to attach completed TILA disclosures to the agreement charging interest or fees or permitting payment in more than four installments to remove any argument that the private school failed to comply with TILA requirements. We recommend that schools include the following information in their enrollment contracts if they charge interest or provide for payment plans that allow parents to pay tuition in more than four installments:  The total amount of tuition. This includes a statement that this is the total amount of the obligation when all payments are made.

 The total number of payments and payment schedule. This includes the number, amount, and timing of payments scheduled to complete payment.  The amount and terms of any late payments, non-sufficient funds charges, and the rules resulting in these charges.  Amounts paid by the School to other persons on the consumer’s behalf (i.e., any administrative or insurance fees). The School must identify all such persons. This can be described in generic terms, e.g., public officials or government agencies, credit reporting agencies, appraisers, and insurance companies.

TILA disclosures must be made “clearly and conspicuously in writing, in a form that the consumer may keep” and the “[t]he disclosures shall be grouped together, shall be segregated from everything else, and shall not contain any information not directly related to the disclosures required…” 2019 Based on this requirement, we recommend that TILA disclosures be listed in a separate attachment or addendum to the enrollment contract or that the school create a completely separate tuition refund insurance contract. Additionally, these disclosures must be made to parents or legal guardians before the enrollment contract is signed. 2020 6. C REDIT C ARD S URCHARGE F EES On January 3, 2018, the Ninth Circuit held that California Civil Code section 1748.1 , which provided that “[n]o retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means” was unconstitutional because it violated freedom of speech protected under the First Amendment. Accordingly, schools are now permitted to impose credit card surcharge fees for paying tuition. 2021 If a school charges a credit card surcharge, families must have advance knowledge of the credit charge surcharge fee. This information should be clearly described in the enrollment contract.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 485