Fate of budget private schools hangs in the balance as they wait to reopen

Hit by non-payment of fees, schools fear that many students will not return

• Ajmeri Begum used to teach in a private school in Telangana. The school had been unable to pay her salary since March. So she quit teaching and now works for fast food chain KFC. Another colleague from the same school is now an Uber driver.

• A private school in Faridabad has barely managed to collect fees from 20 per cent of its students since March 2020. Now that some classes have resumed, teachers have been tasked with convincing parents to pay the fees due. "They’re having to act more like collection agents than educators," says the school’s principal, who wishes to remain anonymous.

• Chennai-based Shiksha Financial Services, which has provided loans to 2,800 private schools across the country, reports that over 85 per cent of its clients have suffered a severe cash crunch since the lockdown. "Many are uncertain as to how many students on their rolls will return once schools reopen,” says co-founder and CEO V L Ramakrishnan.

As schools anxiously await the green light to reopen for the first time since India went into a lockdown in March 2020, the fate of the country’s estimated 300,000 private schools hangs in balance. A new survey of 3,690 budget private schools by the National Independent Schools Alliance (NISA) reveals that while they have managed to collect fees from an average of only 38 per cent of the students on their rolls, they have had to continue to pay teacher salaries, utility bills, property tax, and more.

“Private schools are bleeding,” says Rahul Ahluwalia of the Central Square Foundation, a non-profit working to transform the Indian education sector. “And it’s not just because of the economic downturn caused by the lockdown, but because of the government’s attitude towards them.”  

Most state governments have directed private schools to not force parents who might be struggling financially to pay the fees. “This has hit many of Shiksha Finance’s school partners,” observes Ramakrishnan. “They’ve operated online classes throughout the year without earning enough fee revenue.” 

Also, state governments have not defined 'ability to pay fees'. Kulbhushan Sharma, president, NISA, and founder of a budget private school in Ambala, Haryana, says, “We feel some parents have taken advantage of this.” The NISA survey shows that respondent schools in Andhra Pradesh, Assam, Himachal Pradesh, and Uttarakhand have collected 15 per cent of their regular fee revenues. The situation in Bihar and Chandigarh is even worse — they reported 7 and 4 per cent fee collection, respectively.

Why has this happened? The reasons aren’t hard to find. The lack of smart phones and digital access among both students and teachers in most budget private schools has meant that they have not been able to hold proper online classes for junior and middle schools. Parents, many of whom have become considerably poorer during the lockdown, have thus found little reason to pay fees. 

“Perceiving private schools as charitable institutions has contributed to this mindset,” remarks Ahluwalia. “But private schools, like MSMEs, have infrastructural costs to bear.”

Matters have been exacerbated by the fact that most states had also instructed private schools to not fire any teachers during the lockdown. “We’ve been forced to fire temporary teachers and support staff to stay afloat,” says the principal of the Faridabad school mentioned above.“And we have dipped considerably into our savings to pay utility bills, taxes, and salaries. If parents don’t start paying fees now, I don’t know how much longer we can carry on…”

She, like other school principals across India, is working out mutually acceptable settlements with parents, as striking students off the rolls will impact their revenues going forward. 

Some states are showing the way. When private schools challenged the Tamil Nadu order restraining them from demanding fees during the lockdown in the high court, it allowed them to ask for 35 per cent of the fees (over and above the 40 per cent that had already been permitted to be collected earlier). It also granted them time till February 28, 2021, to collect the extra fees and allowed it to be collected in instalments, if necessary.

Meanwhile, there are two things beleaguered private schools are dreading when they reopen -- the cost of implementing social distancing and finding out how many students on their rolls actually return. Like others, the Faridabad school has managed to survive by getting one teacher to teach over a 100 students on Zoom. “With social distancing, one teacher will be able to teach only about 12 students,” says its principal. “Currently, that is economically unviable.” 

It might be even more unviable if, as she fears, many of her non-fee-paying students have already shifted to cheaper government schools. NISA believes that the only way forward for private schools is for the government to ease their tax burden, utility bills and extend moratoriums on loans. “If it doesn’t,” says Sharma, “Private schools in India could become the biggest losers of the pandemic.”