COVID-19 effect:  Many schools fear closure, up for sale!

The school shutdown imposed in light of the COVID-19 lockdown has left the many school’s finances in a shambles across the country. The vast majority of private schools are small-scale facilities. There are many private schools with a fee of about Rs 800—1,000 a month. This pandemic left many students’ parents without pay, putting the schools in serious financial trouble. Many small schools have no funds as they are facing difficulties in collecting the fees.
A survey released two months ago sought to express the COVID-19-related fee conundrum of budget private schools reveals the true picture.  The survey conducted by the Indian School Finance Company, a non-banking financial company that funds education institutions, the survey involved 1,678 respondents, comprising owners and principals of private schools, colleges, and vocational training institutes, with budget private schools forming one segment of the report. According to its results, 87.5 per cent of the respondents reported challenges in the fee collection. The challenges cited were parents not having the income to pay fees due to the lockdown (55 per cent), parents not being able to come to school or bank premises to pay fees owing to the lockdown (24.5 per cent), parents receiving salaries late and unable to pay on time (12 per cent), and parents not keen to pay for online classes (8.5 per cent).
The term private schools usually evoke an image of fancy institutions that charge high fees on the promise of holistic education for children. But the vast majority of private schools in India — by some estimates, nearly 80 per cent — are small-scale budget facilities that charge low fees but are seen by many parents as better alternatives to government schools.
According to the think-tank Centre for Civil Society (CCS), budget private schools “are a growing segment of private schools that cater to economically backward communities and are often run by individuals from their homes”.   A report titled “State of the Sector — Private Schools in India“, released two months ago  by the education-sector think-tank Central Square Foundation (CSF), said more than 70 per cent of Indian private school students pay less than Rs 1,000/month in fees, while 45 per cent pay less than Rs 500/month.
There is a shocking report that  over 1000 KG to Class 12 schools in the country are up for sale, hoping to pool in an investment of close to Rs 7,500 crore (roughly $1 billion) in the next two-three years, with the COVID-19 wave hitting India’s education sector hard.
Many large school chains had to slash non-teaching staff salaries by up to 70 per cent. Even funding has become difficult to come through with financial institutions hesitant on lending, owing to lack of clarity over how the situation will pan out.
There are different ways to benchmark fee levels in private schools to identify budget schools. Some of the commonly used benchmarks include minimum daily wage, per-pupil expenditure in government schools or state per-capita GDP,” the CCS added in 2018 report.
 

- Prabhakar Purandare

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