The disturbing events in the Ukraine in recent days with the invasion by the Russian Army and the breakdown of diplomatic relations in the region will have a direct and immediate effect on our independent schools and further and higher education organisations.
The situation is moving at a pace, but this stop press takes stock of where we are now and provides high-level guidance on some of the issues you may encounter and what action you can take at this stage.
Checking the source of fee payments
The first issue to consider is whether any of your students' places are being funded by sources that are now on the UK sanctions list. This is publicly available information and can be found at https://www.gov.uk/government/publications/the-uk-sanctions-list.
In this situation, you will not be able to accept any further payments from these sources.
Some families will not be directly sanctioned but will be financially affected because their bank accounts are frozen. Your next consideration will therefore be to check the banks which are paying your fees. If any of the banks have had their assets frozen as part of the latest round of UK government sanctions, you may find that some families will struggle to pay the next set of fees due. Checking your direct debits is one practical way of seeing who is making the payments.
Other families may not be affected by sanctions but may have substantial non-cash assets in Russia and/or Eastern European countries and may see value wiped off their wealth as a result of the falling Russian share index or possible longer-term economic stagnation caused by war. You may therefore be concerned that a number of families may simply not be able to afford your fees going forwards.
You may already have heard from these families to alert you to their situation. You may see some families attempting to pay a large up-front payment to cover future school fees in anticipation of potential problems/sanctions. Please be aware that banks are looking out for this kind of payment behaviour and that this could trigger a 'high unusual payment alert'. UK banks have yet to announce their updated sanctions policy but if they take the line they have done with Iran (and completely de-risk) it will be difficult for establishments to accept funds from anyone with a connection to Russia. It is too early to tell at this stage what the banks will do.
In the meantime, if such an offer is made, in addition to considering your policies as to whether pre-payment is acceptable, you should pause to consider whether the payer is compromised in any way and whether there could be a reputational risk in accepting the funds in these uncertain times.
This may also be an opportunity to consider what due diligence you are currently carrying out on the source of paid fees and whether any money laundering checks need to be taking place as a matter of course, in addition to the checks required because of this latest international crisis. This topic needs wider consideration, and we will be including an article on this in our next Education Newsletter.
Impact on individual students
The impact of war on minors and young students will need to be dealt with sensitively. Of course, there may be reputational risks with 'harbouring' families of sanctioned or affected individuals. At the same time, you may have a duty of care (particularly where, for instance, you have a child in a boarding school) to ensure that you are not sending that child back to a war zone because their school fees are not readily available on the first day of the next term.
One option that may be available is to support students in this situation through the use of hardship funds (as some education institutions did during the pandemic) in order to see them through to the end of their next educational milestone (e.g. if they are in Year 10 at school, to see them till the end of their GCSEs or equivalent).
If no alternative sources of funding are available and you are concerned that sending a student home at the end of term would put them into danger, then you should consider the student's wider UK network and whether, for instance, their UK guardian (if any) would shelter them. You may also want to consider whether it is appropriate to get social services involved, particularly if they are a minor or vulnerable adult.
Impact in the classroom
Education institutions will need to keep tabs on changes of atmosphere in the classroom. Students may be targeted because of their race or political views. Not all students will support Ukraine and the UK government. War will cause fascination and discussion amongst students, but teachers will need to be sensitive to the fact that, for some, war will be much closer to home than for others. Some students may lose family members or see their families and friends displaced or detrimentally affected. Teachers should encourage the classroom to be a safe and sensitive space and report any potentially damaging or racist behaviour.
We will continue to watch over events as they unfold and will update you with further advice as the situation changes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
