Over the last three to four months, parents across various Indian cities have organised themselves to fight against against private schools over unregulated fee hikes. Protests have been staged against schools in Delhi, Bengaluru, Mumbai, Kerala and recently, in Hyderabad. In many cities, the school fee issue has reached judicial corridors this year.

The Hyderabad School Parents’ Association (HSPA) received support from parents nation-wide, when they launched a “missed call campaign” last month. The Association gave a call to all parents to dial a number on a given day if they want school fee regulation. Reportedly, it received a total 1.3 lakh calls, of which 17,800 calls were from Delhi, 14,994 calls were from Maharashtra and 10,550 from Karnataka, reflecting the kind of frustration that parents across the country are probably experiencing.

In Bengaluru, while a group of parents are already fighting it out in the court, the newly formed Karnataka School Parents Association (KASPA) too has decided to file a PIL in the High Court, demanding school fee regulation.

The parents are up in arms against the schools for hiking the fee by 20-30 per cent.

Fee doubles in five years

In 2012, a private unaided CBSE school was set up in an area in Bengaluru where a majority of IT employees live. The fee was Rs 45,000 per annum and affordability was one of the factors that influenced parents’ choice. This academic year (2016-17) the same school has imposed an annual tuition fee of Rs 82,000, almost twice what it used to charge four years ago.

“We are unhappy over the ways in which schools are manipulating parents by hiking admission and transportation fees every year. The CBSE and ICSE bye-laws clearly state that the school management should consult parents through chosen parents’ representatives before revising the fee. But we are not convinced about the selection process of the Parent Teacher Association (PTA) itself. Often, parents are unaware of the PTA selection process and are never informed about it,” says KASPA Vice-president Selvaraj.

Karnataka, like several other states, has not fixed a fee limit for schools. In 2014, the Department of Public Instruction drafted a policy to fix the fee per student in Bengaluru schools. But the draft reportedly received 7,000 objections and suggestions from the public and was shelved.

The proposal also received strong opposition from school managements. Dr M Srinivasan, Founder and Chairman of GEAR International School in Bengaluru says, “The government and the parents consider just the salaries and maintenance cost while calculating the fee, but what about the initial establishment cost?”

Variation in establishment cost

So what’s the establishment cost incurred by a school? “There is no single criteria to measure the establishment cost,” says K Satyanarayan, Director at Chennai-based New Horizon Media Pvt Ltd and an education blogger.

The school’s initial expenditure depends on how the land, on which the school has been established, was sourced. For example, if the school land was bought at market value or taken on lease, the management will most likely have the burden of a loan incurred to purchase or take it on lease. “In fact, in Bengaluru most of the franchise schools or group of institutions are built on leased property,” points out Sawal Das Jethani, Founder and Managing Trustee of the Chrysalis High Chain of schools.

If the private school has obtained land at a concessional rate, then of course it is even easier for the school to make substantial profit.

“In Bengaluru, the Bangalore Development Authority reserves land for educational institutions, but how much of it is actually sanctioned to schools?” asks D Shashi Kumar, General Secretary of the Karnataka State Private School Managements’ Association and the Founder of Blossoms School. He says the government used to sanction land in the past for educational institutions, but that has not happened in a decade or so.

According to Jayaraman S, a Chartered Accountant who used to audit private schools in Delhi and is a governing body member of several schools, the Delhi government sanctions land to private school managements at a relatively cheap Rs 45 lakh per acre. Unlike in Bengaluru, land availability is still not an issue in Delhi, which could be a reason for much higher fees in Bengaluru, even when compared to the best schools of Delhi.

Apart from land cost, school managements also incur cost to build the school and provide infrastructural facilities.

Reasonable surplus

This brings us to the question of schools making “reasonable surplus.” The Indian law makes it mandatory for educational institutions to be registered under the Indian Societies Registration Act or Indian Trusts Act. Naturally, these institutions are meant to be non-profit organisations.

In various court cases, the apex court has passed judgement stating that educational institutions do have the freedom to make reasonable surplus. However, the court was clear that there cannot be any profiteering in education and the surplus fee collected should be used only for the school’s development activities or expansion plans.

Regulations and litigation

Every state has its own fee regulation policy for schools. But the policy itself has become a point of altercation between school managements and parents. The Andhra Pradesh High Court in 2010 had limited the admission fee for private schools to Rs 5,000 per student, following which the government enforced an order the same year.

But parents in Hyderabad say the schools have been violating these norms. “Schools collect non-refundable admission fees, ranging anywhere between Rs 25,000 to Rs 2,50,000,” says Seema Agarwal, Executive member of HSPA.

In Mumbai, Private Schools of Maharashtra (PoP SoM) is a group that’s fighting unjustified fee hikes. The Maharashtra Educational Institutions (Regulation of Fee) Act allows for a 15 per cent fee hike once in two years, but parents allege that schools have been hiking their fee every year.

If there is one major city where parents haven’t been very vocal about the fee hikes, it is Chennai. Tamil Nadu was a sort of pioneer when it came to regulating the fee structure in private schools, a model that other states are now trying to replicate. The Tamil Nadu Schools (Regulation and Collection of Fees) Act, 2009, paved the way for the establishment of the Private School Fee Fixation Committees, who calculated fees based on the school locality, strength of students, classes of study and status of the school.

But some CBSE and ICSE schools approached the Supreme Court questioning the powers of the Fee Fixation Committee, leading to the issue of an interim order by the Supreme Court in January 2016. The order said that the power of the committee is limited only to verifying the fee collected by schools and checking if it is commensurate with the facilities provided; they could not impose any fee ceiling.

Lack of clarity

Satyanarayan, feels that the crux of the problem lies in the lack of clarity on what is allowable and non-allowable expenditure for schools.

Dissecting the Chennai model, he says there are two glaring faults in its fee fixation policy. First, the policy doesn’t leave any scope for the schools to experiment. For example, according to the Right to Education Act, the student teacher ratio per class should be 30:1. But if a school tries to improve educational outcomes by deploying more teachers, the Committee considers it as inflating the expense.

Second, the members of the committee are not auditors, but officers from the Education department. “They cannot actually gauge the cost and expense of the school,” Satyanarayan observes.

He believes that the problem lies in the absence of a separate authority to regulate the education sector and emphasises that fee regulation has to be viewed holistically.

Urban expert and CEO of social technology company Mapunity, Ashwin Mahesh too echoes his opinion. He says an independent regulator to monitor private and government schools would be better. “Schools should be given the liberty to fix the fee, but they should be subjected to auditing as well. The proposed amendment to the Delhi Education Act is a right step in this direction,” Ashwin says.

Along with it, there should be transparency in the school accounts. “Schools should be mandated to make their expenditures public,” says Satyanarayan.