Regulating Private School Fees

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 -

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 -

Source: The Hindu