Steering private schools during the pandemic – A myriad of untold management truths

Amidst all other news of crisis that comes to our news feed on a daily basis, we are living in times, when hardly a week goes by without, hearing of a parent who has knocked the doors of a court for non-levy of school fees or a reduction in the school fees payable by them for their children, owing to schools remaining physically shut due to COVID-19.

Such matters are ones that grab the attention of average news-consumer these days, since quite a significant chunk of such news consumers have their children or their grandchildren studying in private schools.

The concept and the need of private schools, whether or not such a system is required in a country like India, where the State is not able to provide quality solutions for meeting the schooling requirements of all, have been examined, answered and established by the laws as well as courts several times over.

The concept of private schools and the right to learn and right to run a private school are indeed inseparable aspects of the Right to Education enshrined in the Constitution of India.

Education being a Concurrent list subject, both the Central government and the State government can regulate matters that fall within the ambit of ‘Education’.

However, as far as school education is concerned, it is the State government that more often than not legislates on the subject and it is the State-run boards that prescribes the educational syllabi, conducts examinations and awards passing certificates to students that are enrolled and living within the territorial jurisdiction of a State.

This is of course with certain exceptions, when the State also runs certain schools or provides affiliations to schools even outside its own territorial jurisdiction – like in the case of Kerala State Education Department, which has schools affiliated to it in middle eastern countries.

Even in the case of certain boards that are recognized and/or administered under the auspices of the Union government, like the Central Board of Secondary Education (CBSE) or the Council for The Indian School Certificate Examinations (CISCE), a vast majority of terms and conditions for the grant of affiliation by such boards require schools to follow the specific laws of such State where such school is operating from.

Apart from that, as far as matters of levy of fees of a private school is concerned, the right and the quantum of fees that can be levied by managements is almost absolute and determinable by the private managements themselves except the obvious fact that the fees to be levied by a private institution should be in line with the facilities they provide.

As far as a private school is concerned, complete or near complete autonomy is what is granted to such schools in the matter of fees and management of such schools and this has been given absolute judicial recognition in the landmark 11-judge bench verdict in TMA Pai Foundation v. State of Karnataka, which was subsequently reaffirmed in Islamic Academy as well as PA Inamdar, wherein private schools and institutes have been allowed by schools to devise their own fee structure.

A private school in line with its guiding principles always seeks to establish state of the art facilities and infrastructure as well as tries to get the best of the best faculty, so that it can stand out amongst other schools and in this thrive to be the best.

It is a matter of bitter reality that the fees levied by schools are more often than not several times higher than what a government aided school would levy.

But the choice to send one’s children to a private educational institution that provides facilities equivalent to the ones in a five-star hotel or to another one with facilities equivalent to the ones in a three-star or even a two-star one is purely one’s own depending on each person’s capacity and ability.

Parents, in the quest for their children to obtain high standards of education, seek admissions in private management schools and the authorities running such private schools in turn and in fulfillment of their commitment, provide the latest and best infrastructure, learning environment, best of the faculties and the finest of the facilities as well.

This is the sole and only reason why there is a great disparity in fees amongst the private educational institutions itself and this as elaborated earlier, is something which is sanctified and has the blessings of the law as well.

Parents while obtaining admission for their children in such private schools sign up to associate with the school to pay their children’s fees on time and schools on the other hand shall have to provide the promised quality of education.

At this juncture, it is to be pointed out that there are indeed several government schools especially in Kerala and in Delhi, that have also recently been upgraded and equipped themselves with excellent infrastructural facilities that are at par with several private schools.

But there still appears to be a stigma associated with certain parents in sending their children to such government schools irrespective of the facilities provided.

As obvious as daylight, (which many a times the parents or other stakeholders and ‘interested’ parties who seek to throw mud at privately run schools and their management seem to conveniently forget) it is this difference as to who bears the cost for the installation and implementation of such infrastructure and facilities and the expenses involved in the upkeep and maintenance of such elements, which result in the difference in fees in private management run school and government school.

Apart from the capital involved in the establishment of school, there are several other aspects that are major contributors to the enhanced fee structure in a private school, which remain unaware to the public or to even the parents of the children at private schools.

Though these and their quantum may vary from State to State, a vast majority of them form part of the common palate of burdens on private school managements across India.

Let us take the case of Kerala. A school run by a private management in the State has to incur the following additional expenditures when compared to any aided school or government run school:

(a) property taxes – schools that fall under the latter category are fully exempted from payment of property taxes payable to the local self-governing body in which school is situated in, whereas a private school has no exemption of this sort. Moreover, the taxes that are payable are computed in the same slab as that of a commercial building akin to a hotel. Any school of decent size would be anywhere between 3000-10000 square meters resulting in lakh as property tax year a year;

(b) fitness certificate inspection fees – every school building that is required to be certified as a school building has to obtain a fitness certificate year on year and there is a joke called an inspection fees to the tune of 1.25% of the total construction cost that is leviable on private schools alone by the concerned local self-governing body. What is more is that the fitness certificate is not even a one-time exercise – it is a year-on-year exercise that is nothing but highly discriminatory especially in a circumstance when government and aided schools which function out of dilapidated buildings do not even have to get a fitness certificate;

(c) Road tax for private educational institutional buses – Kerala state imposes a tax for educational institutional buses that are run by private schools and this amounts to Rs.100 per seat and is payable every quarter, whereas government aided institutions are exempted from paying this;

(d) Higher electricity tariff applicable to private educational institutions – The electricity tariffs applicable to private and unaided educational institutions in the State of Kerala is again categorized differently and they are made to pay the same rates equivalent and applicable to a commercial consumer; and

(e) Building Tax – the taxes payable to the State government in what is commonly known as one-time building tax (OTBT). This tax is again non-existent for aided schools and only slapped on private schools. These are only a few glaring examples of the contrariety between the two segments.

While these are certain identifiable heads on which private schools are clearly discriminated in the State of Kerala, there are several areas where private unaided schools are forced to face the music from the State and other regulators, like the hassles a school has to go through right from obtaining the NOC for affiliating to a different board, obtaining recognition and renewal of the same under the provisions of the Right of Children to Free and Compulsory Education Act (RTE Act) etc.

The norms applicable for building and construction as well as fire and safety are on two different poles when it comes to a private unaided school and to an aided/government run one. This is one area where the dichotomy between the requirements for these two spectrum in the State of Kerala is clearly exposed.

The fire and safety and building norms in the State have been revised over the years and for valid reasons too. Privately managed schools which were constructed some-time back were forced to alter their buildings and spend several lakh and sometimes crores to make their buildings comply with these changed requirements.

However, the government schools on the other hand continue to exist and function without any form of alteration or improvements in their dilapidated condition or continuing expenses being required to be incurred under this head.

There is a general notion that cuts across especially in Kerala, that all private unaided schools operate solely as profit centers and are involved in profiteering.

This rather is far from the truth. A vast majority of such schools are registered as a charitable trust and they come under close and strict scrutiny of the Income Tax Department as well as the board to which they are affiliated to and also the Kerala Education Department and it becomes nearly impossible to engage in any form of profiteering.

Quite a significant number of schools do not even meet their expenses and are often left with no other means but to rely on loans and debts or to rely on the founders of such schools. The same is the story, when it comes to any form of capital expansion or addition to existing infrastructural facilities and private schools find it difficult to engage in any form of expansion, or the ones that does, have to necessarily add it back to the student’s fees.

It is in this difficult scenario that a private school goes about running its show and there is another aspect which most often goes unnoticed in a private school viz., fee-defaulters and bad-debts.

In any given year (even pre-pandemic) in most schools, at the end of an academic year, there would certainly be about 3-5 percent of fees defaulters. From there-on, it becomes the real difficulty and pain of a school management to recover such monies from such defaulters. Many schools do not resort to any action against fee defaulting students/parents during an academic year for various reasons including to avoid putting the concerned student through embarrassment or inconvenience.

However, in several such cases, schools often end up at the receiving end with parents withdrawing their children from the school without any formal notice or request and these schools can do nothing about such unscrupulous parents except to hope that the children who were their students, do not imbibe such corrupt and underhanded behaviour from their parents.

In India, as such there is no proper and immediate recourse for recovery of school fees from a defaulting parent, whether it be legally or through any administrative forums. And if at all any such school attempts to initiate any such recovery or take any action for its legally receivable dues, then as if to rub salt into the wounds, that school is all set to be hounded by the media and public-at-large.

Therefore, as you can see, running and managing an unaided private school in the normal scenarios was in itself by no means an easy task and the COVID-19 induced pandemic has certainly not made it easy for the education sector, especially the private school sector.

Like all other sectors, school education too went through a rapid and quick adaptation and most of the aspects became online – the brick-and-mortar classrooms were replaced by digital ones.

Several schools, taking into account, the pandemic affected conditions of the parents as well as other circumstances prevailing in their schools, on an individual basis, had suo-motu reduced the fees. There were indeed some schools that had not reduced any fees. Nonetheless, this COVID-19 pandemic scenario has led to one of the toughest times through which a private school management has to go through.

On the one hand, there were governments or regulators, even in States where they were not legally authorized to, passing dictum and directions, to reduce school fees to the tune of up to 40 percent.

On the other hand, there were concerned ministries passing directions ordering employers to pay 100 percent salaries even if employees were not reporting to work or in case they reported to work, but not performing any work.

The Supreme Court during this time received several petitions from parents of school going children to introduce a moratorium or deferment in payment of the school fees, but it declined to hear the petitions stating that the situation across India in all states is varying and therefore the High Courts, are best suited to decide on the matter.

Accordingly, parents and other interested parties, whether they have a genuine concern or not, approached various High Courts for what appears to be an attempt to not pay fees at all or to get a significant reduction in the amount of school fees - all under the garb of the pandemic.

What is not understood by these parents or other interested parties who are targeting the schools is that several heads of expenses for a school remains the same – irrespective of the pandemic or not.

One common aspect that is often raised by the parents or the litigators is that students are learning from the home and therefore the schools remain non-functional, thereby leading to reduction of operational costs like electricity charges, canteen etc.

It is indeed true that since the schools are not functional, there is indeed reduced electricity usage, but however, unfortunately parents or other litigators ignore or are not aware of the fact that schools are levied electricity under the commercial tariff with a huge component of the monthly electricity bill being levied as fixed charges and consequently meaning that the actual saving is not a significant one.

Another aspect the litigators/parents often overlook is that the schools and the buildings must necessarily be maintained, pandemic or not. This is so because, without regular upkeep, the infrastructure will most certainly take a beating and when physical classes re-open, additional expenses much more than what is collectively spent for maintaining it may have to be incurred for resurrecting or restoring them.

Yet another aspect that is often ignored is with respect to the payments of AMCs for the various fixtures, electronic installations and digital modes of learning that are installed at the schools like smart class-rooms etc.

This is of-course over and above the new additional line of expenses that a school has to incur because it has had to go onto the digital mode of education such as increased internet connectivity and bandwidth and back-up line for preventing connectivity failure; licensed platforms for conducting online classes on Zoom, Google Meet, Microsoft Teams etc; licensed software and applications for facilitating online interactive classrooms; increased trained manpower for handling these digital/IT related platforms and also to handle and create the digital and media contents; subscription to various electronic/digital applications and websites, programs for hosting and conducting special training sessions and modules for students, which were earlier not there.

This along with the fact that there are conflicting or ‘sensationalized’ media reports covering the various verdicts of the Supreme Court and High Court on this topic, appears to be nothing but an attempt to create a wave of sympathy for the parents during the pandemic time.

For example, all media houses reported about a judgement by the Supreme Court in Indian School v. State of Rajasthan. Primarily, a perusal of all the media reports made it appear that a judgment has been pronounced by the Court which was applicable to the whole of India whereas the judgement very clearly laid it down that the same was applicable only to those schools in Rajasthan contesting that matter.

Further, the Supreme Court also held that a 40 percent fee reduction order issued by the Rajasthan government was without any backing of law.

In fact, the Court ordered the payment of 100 percent fees through 6 installments, which was subsequently reduced by the Court to 85 percent on account of the unused facilities. It is unfortunate to note that such convenience reporting has only prompted parents from not paying fees and also to enable certain parties (whose interests are unfathomable) to contributing to create confusion in the minds of the parents by instilling doubts, as though the judgement is applicable to whole of India.

This is certainly not doing any favor or courtesy to the already strangled private school managements. Parents, stakeholders and other interested parties, seems to be oblivious, ignorant and to say the least, absolutely uninterested to know and learn about all these heads of expenses and appear to be only interested in making schools go through a difficult time, when they like any other organization are facings their own set of troubles in steering through these tough and unprecedented times.

Schools must certainly have a policy of compassion and should be receptive to parents concerns and it is most certain that almost all schools by now have inured to put a policy of providing installments as well as offering any reductions on an individual and need representation basis owing to COVID-19 pandemic induced situations faced by parents.

Parents must not use this pandemic as a scenario or as an excuse for not paying the fees of their children and they must certainly put themselves in the shoes of the school and its teachers as well as other staff members who have toiled just as hard as any other organization that is operational during this COVID-19 pandemic time. The pandemic must certainly not become a stimulus for the private school management sector to draw curtains in already uneven playing field.

Asok Chacko Thomas is a lawyer based in Kerala.