The inside Story: Most of the Private Schools are Facing Existential Emergency

Further Closure of Schools Means the End of Road for Many

By: G.N.Shakir

Whenever we talk of a private school, a self construed image comes in our minds which look like fancy buildings, high rates of fee and luxurious set up. In fact the truth is far from this. This may the image of some high end schools but the general reality is quite different since a lot of these are low-budget private schools that charge less than Rs. 2000 a month. Commonly, these schools are termed as low income or budget schools because of the fact that these schools cater to the educational needs of students coming from economically weaker and low income families especially in rural and semi-urban areas. Some years back, these schools used to be most popular institutions because parents with a lower or a middle-class income wanted their children to study in English medium schools in a bid to give them better prospects for their future. But for last some time, the perception about these schools has drastically changed. This change of perception has affected the functioning of schools to a large extent even to the extent of compromise on quality education.

From last about a year, I have been closely monitoring the functioning of private schools being associated with a large chunk of these educational institutions. Private sector constitutes one of the most important partners in the education sector. Roughly, about 52 percent students are enrolled in privately owned schools. According to UDISE data of year 2019-20, there are nearly 5500 private schools across Jammu and Kashmir compared to 23 thousand Government schools. There was an enrolment of about 1260000 students in private schools during the year 2019-20 while as in Government run schools the enrolment was about 1270000. About 60000 teachers are employed in private schools compared to more than one lac teachers in Government schools. Today, the figures can be different as many parents shifted their children from private schools to government schools because of pandemic induced financial crises. Many private schools closed their ventures and enrolment in Government schools may have increased manifolds because of the quality checks, enrolment drives and other obvious reasons.

For last more than two and a half years, the COVID-19 pandemic caused a lot of destruction and one of the worst-hit sectors is that of the private budget schools most of which were either shut down or are on the verge of closure.Because of the pandemic induced school closure, these schools have lost out their basic revenue as they only depend on student fees to survive. In fact the schools are facing an existential emergency. Private school owners are currently under huge stress because on the one hand collection of fee has become a hard nut to crack for them and on the other hand most of the parents are reluctant in paying the dues. The stress among private schools is emerging mainly due to poor fee collections, which is not just affecting their cash flows but also impeding their ability to pay salaries to their staff and loan dues.

Private schools have been struggling to pay their bills and loan dues to banks and other lenders due to poor student turnout amid the pandemic. Many of them fear that another wave of COVID-19 infections, and a subsequent lockdown, if any, may even force them to shut down forever. Apart from causing a disastrous loss in the form of lack of access to education for children, this could lead to a lot of unpaid loans for banks and other lenders, and loss of livelihood for teachers and support staff.

For the past 32 months, schools have been surviving on near-zero cash flows as most of the fees they collected got exhausted in paying salaries to its staff, repaying loan installments, and running online classes. According to a pan-India survey, the fee collection for the last academic year has been very poor mainly because parents either lost their livelihoods during the pandemic or were unwilling to pay school fees due to absence of offline classes.

Recently a school owner told me that he had to take loans from family and friends to pay their loan installments during the pandemic as debt kept piling up. “If another wave strikes and there is a lockdown again or schools are continuously shut, I may have to sell half of my land to repay the dues,” he said.

During last two academic sessions many students studying in private schools have already switched to government schools. As per RTE act, no school can deny admission to a child and there is free education in Government schools which forces low income parents to chose it for their wards but at the same time the shifted students owe huge amounts of fee to their parent institutions which the parents are never ready to pay thereby causing huge financial loss to the private schools. A school owner from Srinagar Uptown told that at least ten students have shifted from his school to nearby Government schools and each parent owes sixty to seventy thousand rupees to his school as pending tuition fee of last three years. Imagine, this amounts to about seven lac rupees which the school has almost no hope to add to his balance sheet and under these circumstances he has to either stop the salary of his staff ( which is in no way justified) or has to beg, borrow or steal to meet the  expenses.

There is no denial of the fact that private schools perform better on the academic front and when it came to online mode of education, these schools were no exception to put their system on the required track. Many schools borrowed loans and provided smartphones and internet connectionto their teachersin order to impart online education. But unwillingness of parents to pay school fees as they did not consider online education at par with classroom learning, was again a hurdle.
Although many schools made successful attempts in getting their students to schools for examinations, assignments or other purposes and got some amount of fee collected but in general, the fee collections still remains inadequate, while interest on the loans have either gone up or their loan accounts have become NPA.  Many schools are demanding for extended repayment terms and moratorium, as their situation has barely improved or is expected to improve in near future.
In order to save this sector from collapse, there is an immediate need of a financial package for these budget schools. Moreover, these schools need relaxation in loan repayments and other taxes.
Be it closure of schools or distressed functioning, it is clear that the fate of already stressed private schools hangs in balance. Further closure of schools may be the end of the road for many.

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