Financial Planning For Budget Private School Owners Post Covid

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Financial Planning

During and post COVID-19, Budget Private Schools (BPS) in India are struggling to upgrade their infrastructure and adapt to a new reality.

However, BPS has its own set of issues. These schools face difficulties setting up reasonable tuition fees due to government regulations. They also require funding to improve their infrastructure. BPS also faces three major challenges in running any school –

  • Unavailability of qualified teachers,
  • delays in fee payments, and
  • management of students’ transportation.

Are Budget Private Schools adjusting to the COVID-19 crisis?

Budget Private Schools are struggling to cope with the pandemic effect as several parents continue to struggle to pay tuition fees. In the post-COVID world, BPS will have to focus more on building infrastructure for digital education.

There would likely be a shift-based education system introduced. But the question is, can it be done? They are apprehensive about deploying technology for education as they do not want to incur high costs.

Another problem faced by BPS is the fact that the majority of the teachers are not well versed with electronic devices like computers, smartphones, and tablets.

Teachers also doubt the effectiveness of online education versus traditional face-to-face teaching. This mental block is a limiting factor. BPS also faces issues from an infrastructure point of view, like the availability of hardware and internet connectivity, especially in semi-urban and rural areas.

The situation with pandemic has led us to believe that this might not be the last of it. We can expect a relapse as a worst-case scenario.

Budget Private Schools Financial Planning

Post-Covid, Budget Private schools must plan their finances. They need to consider the past dues that are to be repaid, teacher and staff salary, maintaining infrastructure, and the quality of education. These act as important aspects of financial planning.

Avoid unnecessary expenses:

  • Marketing and Campaigns – Marketing is an essential tool in society. The more you market, the more it impacts the mindset of the parents. Keep the target customer in consideration. Instead of rolling out pamphlets or brochures that add cost to the school, a campaign about the school with the available teachers in the community where the teachers could give detailed information about the services and facilities provided by the school builds a better relationship with the community.
  • Use of social media – Schools can also use social media to share videos, photos, events, etc. at the school. These days, parents use social media to cross-verify the school and its reviews. Hence, this is something the schools must take seriously to be able to showcase their facilities.

Also Read: 5 Reasons Why School Infrastructure Is Important for A Child’s Growth

 

Quality of Education Matters:

  • Developing students – During COVID-19, students moved to public sector schools. The enrollments went down. However, instead of attempting to pull them back to budget private schools, it would be better to concentrate on the available students and provide quality education. There is also an issue with covering learning loss and managing the social-emotional needs of students and teachers.
    Furthermore, the New Education Policy (NEP 2020) has led to the emergence of new areas for development for schools.
    The quality of education matters, it must be enhanced. When the quality improves, admission increases, and students return to budget private schools, in turn, helps in the financial planning of the school.
  • Professional development for Teachers – Post-pandemic, schools are recognizing the need for upskilling their teaching force specifically around the use of digital tools. Though the pandemic lasted for a year and a half, the situation is unpredictable in the future.It’s always better to upskill teachers by using digital equipment. With the available teachers, they need to be trained in the new NEP 2020 and various pedagogy can be implemented in the classroom. Teachers are the key aspects in improving the quality of education.

Support of Parents/community:

For BPS to survive, parents’ support and timely payment of tuition fees are mandatory. Payment of fees on a regular or timely basis will help the school in financial planning. Any product introduced in the school; needs to go together with the support of parents.

The transition of parents to technology during a pandemic or enhancing the skills of the students can only be done with the support/ acceptance of parents. Parents play a vital role in the improvement of the school. The school needs to see that there is accountability and transparency in the school budget.

Prioritize the goals:

Plan the budget from previous year’s income. Consider what is essential rather and what investments can be withheld for the future year. Prioritize your goals, and concentrate on financial planning.

Other Financial support:

  • Easy access to Technology – There’s a digital divide between urban and rural areas in India, where the further you move from the city, the poorer the internet connectivity. There’s also a divide between learners who come from mid to high-income families and those from low-income families, where the affordability of devices impacts learners’ ability to engage with remote learning. Families have also experienced a significant loss of income.

    We now need to focus on making technology usage sustainable for schools. For this to happen, tech providers and manufacturers need to come together to create affordable and relevant products. Technology can also be a fantastic diagnostic tool leveraged to assess the learning levels in children and identify learning gaps. If Technology can be used to deliver content at the right level, then it will have a great impact on the learning outcomes of children.

UNICEF reported, in India, 42 percent of children between 6-13 years reported not using any type of remote learning during school closures.

  • Arranging Funds – When tech providers and manufacturers offer products at an affordable price, the challenge is to get funds for their procurement. Since most BPS schools have a low fee structure, paying for these products is a challenge.If the schools are already leveraged, they can approach corporates in the vicinity for grants and aid as a part of their (Corporates) CSR. The schools can also explore possibilities of utilizing any Government aid and subsidies available.Involving corporates even as a part of a CSR activity can add value to the school’s credibility in terms of vision and strategy, which could be strengthened in the school’s financial planning.
  • Affordable Education Finance – As per a research by AVPN and KPMG India, school owners highlighted two key challenges: finding a financial institution and secondly their willingness to lend to them.73% cited an inability to identify a financial institution willing to give them a loan. There is a lot of lender preference for lending vehicle loans, rather than infrastructure. 72% cited poor product fit as a result, it was challenging for schools to attract funding from regular banking channels.Additionally, most schools in India are registered as trusts and societies, adding another difficulty layer. Ambiguity regarding collaterals offered and projected revenue streams do not give much confidence to the lending institutions.In the meanwhile, if the ambiguity is cleared and the school managements are transparent enough to let the lending institutions onboard, then this partnership can be conducive for both the borrower (schools) and the Lenders.Financial institutions can benefit from this demand for capital while making financing more affordable for BPS.By designing products that work for schools and making formal funding accessible, financial institutions can have an enormous impact on the quality of education of learners attending BPS.

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