How can APS overcome the financial burden imposed by covid?

How can Affordable Private Schools overcome the financial burden imposed by covid?

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Financial planning

Affordable private schools (APS) are under significant financial shock after the pandemic. Teachers have reported losing jobs, having their salaries cut or wages not being paid at all. Thousands of APS have been closed, with the rest struggling to survive. Many APS could not provide remote learning support to students through the pandemic due to a lack of technical support and funds. Here, we will talk about the financial burden faced by APS post covid and also discuss how they can overcome these challenges.

What are Affordable Private Schools?

UNESCO defines the APS as any school which is not operated by the government but controlled and managed by a private body (e.g. community, foundation, faith-based organisation, NGO, private proprietor enterprise). Other terms for APS are non-government, non-public and non-state.

APS are loosely characterized as low-fee schools whose operation is not supported by government funds. As per the ministry of statistics of India’s report (MoSPI2019), 45% of students in private schools pay less than ₹500 a month as fees, suggesting that the majority of the sector is “low-fee” or “affordable.”

Fees Enrolment

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Causes of financial problems during the pandemic in APS 

School fees collection

APS faced a significant financial hit due to non payment of school fees. Parents from these schools are usually from lower-income groups and depend on their daily income for day-to-day livelihood. In urban areas, these parents are usually employed in small businesses like building construction, housekeeping, security services or small offices, with a salary range between ₹8,000 to ₹20,000 per month. Most of these jobs were at stake due to the pandemic and so parents could not pay their children’s school fees.

Reverse Migration

The 2020 ASER report noted that between 2018 to 2020, boys’ enrollment increased from 62.8% to 66.4% in government schools and enrollment of girls increased from 70% to 73%. As this happens, Affordable Private Schools lose more students and come under severe financial distress.

Lack of surplus cash

Affordable Private Schools do not run with huge cash surpluses from their past operations, unlike elite private schools. Any surplus is reinvested in infrastructures like benches, labs, classrooms, libraries, sports equipment, ICT boards, computers and school vans. As a result, APS did not have excess reserves to take care of their operations costs, such as salaries, rent and other day-to-day operating expenses. So, overall COVID-19 left APS’s finances in shambles.

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

Court’s order of school fees relaxation

In 2020, a judgement by the Supreme court of India, as well as several high courts across the country, ordered thousands of private unaided schools to grant a 15% deduction in annual school fees for unutilised facilities, including recurring costs on various items such as electricity, petrol/diesel, maintenance cost, water charges, stationery charges, etc. These orders had relieved parents suffering under the burden of school fees payment and that crippled the operations of APS further.

Lack of Government support

The government has been chiefly oblivious to the distress of the APS. APS have not been accounted for in policy decisions. Reports have stated that many reimbursements for unaided schools have been pending under the Right to Education Act of 2009. The government also did not help waive property tax or lower interest on borrowings.   

Different ways to ease the financial burden of APS:

  • Raising capital in the form of grants, donations, CSR and funding- An entity or individual can raise two types of funding. A funder invests in someone or something and expects some monetary return; the other one, where funders invest money for a social cause and that money doesn’t need to be paid back, is called charity. APS can take advantage of charity, donations and any CSR funding from NGOs and companies. An instance where a grant of 22 crores was received by Teach For India from the Michael and Susan Dell Foundation recently to purchase devices for over 15,000 students. 
  • Government support– Government can support APS by fast-tracking income tax registrations and exemptions, granting waivers on land revenue and providing low-cost loans. Government has under-regulation of school learning outcomes compared to over-regulation of inputs and entry. Also, public banks have to focus on affordable loans for APS. 
  • Public-private partnership- Globally, Public-Private Partnership (PPP) associations in education have been used to provide the framing structure through which to bring the public and private sectors together to complement each other’s strengths in the financing and provision of education services. PPPs have been widely applied to the delivery of education facilities in the last few years to strengthen equity in access through demand-side financing schemes and can help extend the reach and effectiveness of government funds, encourage innovation in education and increase the efficiency and capacity of infrastructure.
  • Reduce dependence on tuition fees– APS must find alternate ways to generate income, such as renting out school playgrounds and auditoriums for social events, ceremonies and functions. 
  • Collaboration with NGOs to adapt to technology- There are thousands of registered NGOs in India working towards adopting technologies and learning outcomes in schools. Varthana, too, has third-party partners such as LEAD school and K-YAN to support schools in technological assistance. Collaboration with such NGOs can save tremendous costs for APS in the ICT and technical development of the schools.
  • Marketing- APS must improve their marketing strategies to attract more parents to their schools. Comprehensive marketing is costly, but in the long term, it benefits the school. In the post-pandemic world, APS must expand their digital and physical footprint. You can also check the comprehensive guide for school marketing in 2022 by LEAD SCHOOL.

APS have always been in a vicious circle of being economically marginalised by lacking funds and resources. The financial struggle faced by the education sector has opened a unique window of opportunity. APS must reflect on their mistakes and work on solutions to improve their situation and provide an essential learning experience to the students.

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