The education sector, like others, has been reeling under the impact of Covid-19 and the subsequent nationwide lockdown. With the pandemic leading to huge job losses and deeper salary cuts, arranging school fees has become a challenging task for many parents.
According to a survey released in June by the Indian School Finance Company, 87.5 per cent of the respondents (schools) claimed they were facing problems in fee collection. The non-government funded schools cited that 55 per cent of the parents did not have the income to pay fees of their children. It further revealed that 8.5 per cent of parents were not keen to shell out money for online classes.
Some private schools and financial technology companies are now encouraging parents to avail fee rebates, scholarships, or opt for education loan or microcredit.
Some prominent schools have rolled out scholarship schemes based on parents’ reduced income during the lockdown. Global Indian International School (GIIS) started a two-year scholarship programme, called ‘Resilience’ for parents impacted by job loss or salary cut. “The school will provide the scholarship once they receive the application and re-evaluate your financial situation. If you’ve got a job or your full salary is reinstated, your child may no longer be eligible for the second year’s scholarship,” said Rajiv Bansal, director-operations, GIIS.
However, these scholarships are just fee waivers and not additional grants. “Around 500 parents have availed resilience scholarship schemes, which included up to 30 per cent off on tuition fee based on different categories,” said Bansal.
VIBGYOR schools (spread across Maharashtra) have extended financial assistance with a scholarship programme in which a maximum of three fee installments can be waived off. “We have adjusted several components of the fees already paid earlier, against future dues. We are also ensuring that all transportation charges for this period are being adjusted,” said Peshwa Acharya, chief marketing officer, VIBGYOR schools.
Interest-free loan can ease the burden
Lucknow-based Tushar Saxena, who works in an insurance company, had to take a 30 per cent cut in his monthly salary. When the school where his two children study demanded fees for the whole year, he thought of admitting them to some other school. However, the school directed them towards microcredit.
Rishab Mehta, founder and CEO of a finance technology firm GrayQuest, said that according to their data, an average Indian household spends nearly 24 per cent of their annual income on tuition fees alone. Parents are, therefore, taking education loans and companies are witnessing a surge in applications.
These companies first partner with leading educational institutions to provide monthly payment options to parents. “We help the parents/students to convert their course fees into smaller, much affordable and convenient bite sized installments, typically at zero extra cost. So now instead of having to pay their education fee of two lakh in two bulk installments of Rs 1 lakh each, parents get to pay it in 10 monthly payments of Rs 20,000 each,” said Mehta.
GrayQuest received 45,000 applications in the first quarter of this year alone while fintech company FinancePeer founder Rohit Gajbhiye said they have received over 5 lakh loan applications. “The parents need to complete a minimal documentation and if the application is approved, the amount is disbursed to the school account directly within 48 business hours,” Gajbhiye said.
No fee hike
Complying with state government guidelines, schools have not hiked tuition and annual fees. Some schools have also deferred quarterly fee payments and have given options to pay fee monthly.
Some unaided schools have given fee waivers on a case-to-case basis. “We have decided to defer school fee till the parents are in a position to pay,” said a spokesperson of a school requesting anonymity. To apply for rebates, one has to send an online application to the school. The authorities might ask for proof of a job or salary cut or your salary slip and accordingly, the waiver will be granted.