The entire quote: "You need to stop taking so many new students".

O.K. here's the story:
Yesterday, I phoned Mary's Mom (Mary is my student) to ask if Mary was planning to return to piano lessons with me after Labor Day, as was their plan as of this past June. Mary's Mom told me back in early June that her daughter would be "taking the summer off, returning after Labor Day". No vacations planned. In June, I reminded her of my studio policy:"students are expected to continue lessons through the summer" and "summer lessons reserve your spot in the fall", etc. Mary's mom chose to stop the lessons anyway.
This week, I gave Mary's time slot to another student who needed to switch, "Mimi". Mimi has been my student for 5 years, summers and all. I told Mary's mom on the phone yesterday that I gave her daughter's spot to Mimi and the reason. Mary's mom said, "You need to stop taking so many new students". The fact that I have taken new students over the summer had nothing to do with the fact that I gave up Mary's lesson time. I have other times available, and I offered those to Mary's mom. Our local schools'dismissal times will be later this year, so I am getting many requests from existing students to switch lesson times. I'm trying to make everyone happy, but certainly giving priority to students who study with me year round.
Mary's mom and I agreed on a new lesson time for her daughter, to begin after Labor Day. So I am continuing to reserve a spot for her. She has been a student of mine for 2 years, and did take a few lessons the summer of last year. I was able to hold her spot last year for fall.
Question: Have you had this type of issue happen to you as a teacher? and Why do I feel so guilty about this right now?
Thanks for your thoughts, I'll take the negative and positive ones

Sounds like you handled it perfectly! You offered her a spot, and you got your message across loud and clear (hopefully anyway).

Don't feel guilty, you did the right thing all the way around. (sounds like I'm being bossy, sorry, don't mean to be )

On a related note, I am waiting with baited breath for a call from a mom that I "fired" in the spring. I sent her a bill for monies owed, never expecting to see a dime of it, but instead she sent the money along with a note to the effect that she wanted to be in good standing come fall. Whaaaat? I thought I was clear when I fired her. Guess not.

Not so funny how we think things are clear when others apparently see things differently!!

You acted completely according to your policy. Your taking new students only limited her in her choice of less times. If she wanted her ideal time, she should have taken lessons over the summer. She forfeited that convenience.

I have those students who took summer lessons, and so I will give them a deadline by which they need to contact me to confirm their lesson time for last year or schedule a new one. These students include ones who began lessons over the summer. When those are done, I will contact students who didn't take summer lessons, giving them a deadline to schedule a time. After that, I will open up my schedule (if any times are left) to new students in the Fall.

On a side note to E&I's student who finally paid, I've got one who I sent an invoice with a collection letter requesting payment in full immediately. I didn't mention anything about lessons in the Fall, as I'm not sure I want to teach the child due to many no-shows, late payments, losing books, etc. It's a shame because the child is very sweet and she was improving. Isn't it strange that rarely does a teacher not want to teach a child due to the child, but the parent or parents?

The only thing I would have done differently is not mention that she lost her prior time. I would have said, "Is Mary interested in starting up piano again this fall? If so, I have just a few time slots left, and I wanted to offer you first pick of them." If the mother specifically asked for her old time, I would have just said, "I'm sorry, that slot is already claimed."

I have a couple parents like that - who always wants to be the exception, who think the policy doesn't apply to them because I am a "friend," or a neighbor, or their situation is so special... It is very hard for me to always have to be the bad guy. But it's getting easier!

I had an interesting situation yesterday. A brand new student (sibling of a current student) was dropped off for her 30 minute lesson, and Mom returned an hour and 20 minutes later! Mom doesn't speak much English, so I had to explain to the child that lessons were 30 minutes, and if Mom left them here longer, they would have to pay extra for that time. I am not a babysitter.

I felt bad having to deal with the child like this at her first lesson. But today, the mom came with the sibling, and apologized and offered to pay. I said it was okay but that she would have to pay if it happened again.

As I use an enrollment fee, and record the date of payment, that determines lesson time priority. In general.

But I remind parents that some day, their student will be in middle or high school, and will have some unusual scheduling demands, and parents who cooperate now will be noted and receive special consideration in the future.

It seems to help.

That is exactly what I said to Mary's mom. I told her I had to give up her lesson time when she asked why she could not have it. Her reply was the subject of this thread, and I immediately felt defensive. She has said to me in the past, when I have discussed the child's practicing schedule (lack of), and other issues, "but I thought you liked our daughter".

What a great idea!

This is exactly my situation too!! The little girl is a sweetie and she is good at piano.
The mom is the ONLY reason I let her go, and I struggled with it for a very, very long time before I finally had enough. I really wanted to continue for the girls' sake, but couldn't do it any more .

Tell her you could stop taking new students, but you'd have to double the lesson fee to make up for it.