At what cost?- Regulating Private Schools

Schools should publish the cost of education in easily legible format, and standardize the way fees are charged.

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There are two main reasons parents are angry at private schools. One reason is parents feel exploited. Private schools hide the true cost of education by lowering tuition fees but increasing other fees like admission fees. They force parents to buy expensive books and uniforms for which the school gets a commission. Often, to the surprise of parents, schools charge a new admission fee every year—for students that have been admitted for years.

What is more, parents have no idea how the fees might increase the next year. They have no choice but to tolerate the increase in fees because switching schools can be costly. Their children will require new uniforms and new books and so on. They might need to move to a new place. It can have an adverse impact on the success of the student.

Another reason for parents’ anger is that those who cannot afford private education feel their children are forced to take the second class citizen track just because they cannot afford a good education at the moment. The Maoist party which represents the interest of the downtrodden of the society considers it their duty to fix this problem. Because the Maoist party has political strength, this issue has gained momentum.

Therefore, it is not surprising that under the tutelage of the Maoist ideologue Baburam Bhattarai, Private and Boarding School Directive 2013 was passed.

Sadly, the directive shoots at the wrong target. It does more damage than good.The most damaging of the new rules is that the new Act requires all private schools to have a minimum of 22 students in a single grade, and a minimum of 115 students for a primary school, 165 for a lower secondary and 220 for secondary schools. This new law, if followed judiciously, will make it difficult to open new schools. If you want to open a school and you can find only 21 students for a class, you are out. When you are opening a new school, having 21 students is not an easy task. The real quality of a school is revealed only after it starts producing graduates, which takes several years. The first year GEMS school opened, grade two had only six students. I was one of the lucky students. If this rule were in place 30 years ago, there would be no GEMS school today.

Although I was one of the six students in the class, I feel I got a high quality education. Research shows that smaller class sizes are assets in schools. In the US some states have laws limiting the class size to not more than 18 students in primary schools. Top quality schools actually have class size limits for maximum students, not minimum students!

According to reports, this new directive is going to wipe out 4,000 smaller schools from the market. If the idea is to help the poor as the Maoist party wants to, and as Baburam Bhattarai has often said, his policy doesn’t help, but makes their situation worse. Among the parents, the poor parents are going to be hurt the most because they can no longer send their children to these smaller private schools which are cheap. They will have to send their kids to costlier and bigger schools, with larger class sizes. It is straightforward economics that when you increase the barriers to entry, you reduce competition. This leads to higher fees and poorer service. So overall, this rule will reduce the quality of education and increase fees. In other words, parents and students will get a worse deal.

The regulation should focus on making the pricing mechanism more transparent, and making it difficult for schools to exploit parents. Here are some ideas:Mandate that schools publish the cost of education in an easily understandable format. That is, all schools should follow the same format, so parents can compare.Standardize the way fees are charged. Don’t allow private schools to charge whatever they want, whenever they want. Allow for increasing fees, but not more than inflation, and show the maximum total cost for parents. Make the admission fee a onetime only policy.

As for making quality education available to poor students, an obvious way is to improve the quality of government schools, but that is wishful thinking. The best way to provide quality education for the poor is to encourage private schools in rural areas by giving them tax breaks, or giving poor students vouchers to attend private schools. Another idea is to have a policy where the government selects students in a national level exam in the fourth grade, and places students in private schools of their choosing, similar to what they are doing in private medical colleges.

Nepal needs more private schools, not less. Private schools are opening up so frequently because there is a higher demand, but smaller supply. They survive because they provide value.

Often the process of lawmaking is captured by interest groups, and you end up having a law that instead of benefitting the people ends up benefitting the interest groups. Often this has serious unintended consequences. This one, if followed properly, will have a serious consequence. And as is usually the case, it will be the poor who are going to get cheated one more time.

source: Jha, Anand (2013),"At what cost?", republica,31 march 2013

2013-03-31 | EducateNepal


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