Regulating Private School Fees

March 13, 2018
1 year

What is the issue?

There is a lack of jurisprudential clarity on the fees charged by private schools.

What is the challenge?

  • Regulating school fees is one of the most significant legal and political challenge policymakers in India face.
  • The issue of fee regulation finds itself at the intersection of two important ideas.
  • One, the constitutionally protected freedoms enjoyed by private schools.
  • Two, the need for making quality education affordable and accessible to all.

What are the concerns?

  • Cost - Every academic year, parents witness the burden of unjust hikes in tuition fees for schools.
  • Adding to their burden is the additional costs such as fees for transport, extra-curricular activities and sports.
  • The managements of such schools claim that these hikes are reasonable and justified.
  • The costs of maintaining a fully functional private school with quality teaching and world-class infrastructure are quite steep.
  • In 2010, the Comptroller and Auditor General slammed 25 well-known private schools in Delhi for arbitrary fee hikes.
  • According to the report, money was being collected from parents under false heads.
  • Also, teachers were being underpaid, and accounts were misrepresented.
  • Autonomy and welfare - Balancing the autonomy of private schools and their public welfare function is another contentious issue.
  • The Supreme Court held that regulatory measures imposed on unaided private educational institutions must, in general, ensure -
  1. maintenance of proper academic standards
  2. school atmosphere and infrastructure
  3. prevention of mal-administration by the school management
  • A Constitution Bench of the Supreme Court held that these institutions have the autonomy to generate “surplus”.
  • Private schools are thus entitled to a reasonable surplus for development of education and expansion of the institution.
  • But the autonomy of such institutions has to be balanced with the measures taken to prevent commercialisation of education.
  • However, there is not much clarity on what the terms “surplus”, “reasonable surplus” or “commercialisation of education” entail.

What are the States' models for fee regulation?

  • Many state governments have either enacted fee regulation laws or are in the process of framing them.
  • These are to prevent private schools from charging unreasonably high fees and to prevent misuse of funds.
  • E.g. Tamil Nadu follows the fee fixation model.
  • Under this, a government committee is empowered to verify and approve fee structures proposed by private schools.
  • Karnataka has a formula that caps fees for schools by way of framing rules under its school education legislation.
  • Maharashtra has a weakly enforced legislation to regulate fees and has multiple government bodies to approve school fees.
  • Maharashtra government recently decided to cap proposed fee hikes at 15%, which was widely criticised by schools.
  • A recent order of the Gujarat High Court upheld the validity of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017.
  • This is now being reconsidered by the Supreme Court which has directed the government to not take any coercive steps against schools in the interim period.

What are the drawbacks?

  • Clarity - The new wave of fee regulation laws in States has the potential to address the problems.
  • However, there is still a lack of jurisprudential clarity on what private schools can or cannot do.
  • How much “surplus” they can make, or what “commercialisation” actually means are poorly defined.
  • Deeper Problems - Existing legislative efforts seem to have made an incomplete assessment.
  • Evidently, the deeper problems are with financial management and accounting practices by private schools.
  • As of now, the states' models are affected by the challenges of weak implementation.

What is the way forward?

  • The solution to make these laws more effective is to address the financial mismanagement and misreporting.
  • In Modern School v. Union of India (2004), the Supreme Court recommended accounting standards for private schools.
  • Further, measures such as the following could be considered -  
  1. regular government supervised audits
  2. generating capacity in State-level Departments of Education
  3. regular inspections
  4. stricter sanctions for fraudulent reporting


Source: The Hindu

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