Private schools with little liquidity are at risk of shutting down: Rahul Ahluwalia, Central Square Foundation

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September 28, 2020 1:20 AM

While private schools are popularly associated with the elite, 70% of students in private schools pay less than Rs 1,000 per month in school fees.

Rahul Ahluwalia, Central Square FoundationRahul Ahluwalia, Central Square Foundation

In the recent ‘State of the Sector Report on Private Schools’, the Central Square Foundation (CSF), a non-profit organisation, found that low-fee schools have seen a significant impact on revenue due to school closure, exam postponement, and widespread non-payment of fees during the lockdown. “If the economic crisis worsens, private schools with little liquidity may be forced to shut down,” says Rahul Ahluwalia, who leads Public Governance & Private Schools team at the CSF. Excerpts from an interview with FE’s Vikram Chaudhary:

In which all ways has the CSF worked towards improving learning outcomes amongst children, especially those from low-income communities?

We have worked with the Ministry of Education on key projects such as DIKSHA, the national digital infrastructure for teachers, as well as partnered with state governments to develop foundational learning and education technology programmes. We also fund research in education and provide grants to early-stage organisations working on key strategic areas.

A few years ago, many engineering colleges shut down, and now many universities that are not digitising are at risk of shutting down. Do you think private schools also, if they do not take steps towards imparting quality education, are at the risk of closing?

For the ‘State of the Sector Report on Private Schools’, the CSF undertook a dipstick survey in April-May 2020 to gauge the impact of Covid-19 on affordable private schools. From our preliminary survey, we found that low-fee schools have seen a significant impact on revenue due to school closures, examination postponement, and widespread non-payment of fees for this period.

The key points from the survey are:
● None of the private schools reported they collected fees during the lockdown, but around 25% of parents report paying fees;
● Fee collection cycles in private schools depend on the start and end of the school academic year; parents often wait until March-April, i.e. till the end-of-year examinations, to pay the academic year’s dues;
● Some states including Tamil Nadu and Maharashtra ordered schools to refrain from collecting fees during the lockdown, forcing schools to forgo a large share of their annual fees and not just the monthly fee for March and April;
● Haryana, Telangana, Delhi and Madhya Pradesh allowed schools to charge only the tuition fee and Maharashtra warned schools of strict action if they withheld staff salaries during the lockdown;
● Nearly 50% of school leaders are considering a shift in pricing models in the upcoming year. They mentioned fee discounts/fee deferrals, pay-cuts for staff and increasing class sizes as possible ideas.
Financial distress for schools will continue even after reopening as they anticipate a drop in enrolments. A significant proportion of parents surveyed say they may have to switch schools for the coming academic year. If the economic crisis worsens, private schools with little liquidity may be forced to shut down.

According to the CSF, learning outcomes even in private schools are not where they should be. What can be done to improve these learning outcomes?

Private schools outperform government schools in terms of raw test scores and are much more cost-effective; however, when student background is accounted for, the learning gap narrows (DFID 2015, Muralidharan et al 2015). The ASER 2018 report shows that 35% of rural private school students in grade 5 cannot read a basic grade 2 level paragraph. More worryingly, learning levels in the private school system have remained stagnant for a decade. This indicates a lack of systemic forces that would lead to an improvement in quality.
The following key policy recommendations are critical to improving learning outcomes:
● 60% of schools are not covered by board exam scores since they end before the grade of testing and hence it is difficult for parents to gauge the learning outcomes in earlier years. As the NEP 2020 recommends, key stage exams at earlier grades (3, 5 and 8) can be critical to map achievement of learning outcomes and make this information publicly available so parents can compare the learning quality of different schools. This will provide an incentive for school owners to focus on learning quality improvement;
● As the NEP 2020 suggests, review input-based norms and replace with a pragmatic and contextual accreditation approach for every school focusing on learning outcomes, child safety, and public disclosure of key information. It also critically suggests that states should set up independent accreditation bodies at the state level (State School Standards Authority) to minimise conflicts of interest;
● Review the non-profit mandate for the education sector and existing fee regulations to attract investment and enable easy access to credit for schools. The government could also explore opening corporate governance structures to private schools to drive greater transparency and accountability. Classifying private schools as micro, small, or medium enterprises could enable higher credit availability for the sector and create greater resilience through crises like Covid-19;

Edtech has seen a massive jump during the lockdown; will this trend also lead to the closing of private schools that are not innovating enough?

While private schools are popularly associated with the elite, 70% of students in private schools pay less than Rs 1,000 per month in school fees. For students in affordable private schools, the digital transition has not been seamless. Our dipstick survey found that while the majority of schools are attempting digital transitions through low-tech, WhatsApp-based tools or video classes, only 33% parents can support their children with digital education, and none of the teachers surveyed find current forms of online instruction effective.

It is argued that there is a need for a policy framework to focus on ‘learning’ rather than on infrastructure and the medium of education. Why?

I must say that 73% of parents who send their children to private schools do so because they believe that these schools will offer them a higher quality of education, and 12% choose them primarily for medium of instruction. While school quality is complex, learning outcomes are a critical indicator of the same. However, in the past decade since the Right to Education Act, which focuses significantly on infrastructure, independent assessments such as ASER show that learning outcomes have declined overall. Given increasing quality concerns, near-universal school access may not mean much if the quality of learning is not being delivered. The NEP 2020 recognises the need to focus on learning quality.

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