I'm aware that is the current narrative of the game where the PC owes Bailey money for living in the orphanage for 'free'.
I wasn't calling it arbitrary because I don't like the idea, but rather that's what I describe their actions of taking advantage of the PC (and other orphans presumably) by extorting them like you said when it's likely not legal for them to do that, which could be borrowed over to the dormitory narrative I suggested.
I proposed my idea because I've gotten the impression that Bailey might actually have some sort of power over the town's officials that could prevent the PC receiving any help from the corrupted authorities, as implied from the Cafe Grand Reopening scene where Bailey made the mayor interrupted the PC from spreading the dark reality of the orphanage and dismiss it all as a joke.
I was always under the impression that Bailey is just that: The chief of justice, (possibly) corrupt as all heck, and too knowledgeable about the oddities of the town for coincidence. The students don't seem to understand the whys of what's going on; the townspeople (and most of the named NPCs) don't seem to care. Bailey extorts the kids of the orphanage, and even "rents" them out if they fail to pay. But if the PC/NPC makes it back to the Orphanage afterwards they won't question it. Bailey will rescue the PC if they get into a bind outside Bailey's direct control (such as the drug dealer gangbang), freak-out if they wind-up screwing the PC, and will give the PC a ride home if their stress leads them to the hospital but not the sanitarium. Bailey will also throw people out who manage to sneak into the Orphanage - if that's to protect the orphans or "investments" I don't know.
But EVERYONE knows Bailey.
Which also makes me wonder if Bailey might not also be the parent/grandparent to all of the kids at the orphanage, too. It'd be messed-up as all hell (and it would make Robin the PCs sibling if true), but we're also left with the impression that whatever is going on in that town has for something like a thousand years - likely beginning with the event shown in the White Wraith flashback and continuing with the Elite today. Oh, and whatever is going on with the Mayor.
I think I'm rambling while on pain meds so what am I talking about again? Oh yeah! I wonder if a future update will let us sire/pop-out other animals and then sell them to the pet shop/pound for cash?