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Maximum Tuition Fee Limit Regulation That Backfires

In advocating for equal access to quality education in Kathmandu valley, Ministry of Education (MoE) has recently devised the regulation to set maximum limit on the tuition fees of private and boarding schools based on official categorization of the schools and the grade standards they conduct. While the maximum tuition fees limit per student studying at 9th and 10th standard for grade-A school is set at NRs 3,600, the tuition fee limit is set varying for other schools belonging to different category for the grade standards they conduct.

Given that the appeal for this price/tuition fee control is justifiable in order to make sure that quality education as a fundamental need of the society is affordable to all income holders, the side-effect of such restrain regulation that distort the balancing mechanism of the market is unfathomable and historically observed. Simply take the cliché case of maximum rent price regulation practiced in different cities of the world that brought the entire tenancy housing market into dire straits. New York City stays as a classic example whereby setting maximum rent price below the usual market price at tenancy housing market not only disturbed the incentive to supply enough apartment to meet the growing demand for it, but it also resulted to degradation of housing quality as house-owners could not afford to upgrade and maintain the housing standard while depending on below feasibility rent revenue. Alas, it led the city to only offer the fiasco of inadequate-barely livable residential housing thanks to rent price control legislation.

Importantly, it is necessary to recognize that the disastrous unintended consequence of rent price control has less if any to do with the unique characteristics of the housing industry of a particular city, but more if not all to do with distortion of the governing market fundamental (i.e., price) that allows the supplier of a particular commodity to supply it in a particular quantity and in quality as demanded by the market.  Similarly, in implicating the distortion of same market fundamental or price in the private education market in Kathmandu, the exact same horrendous consequences are likely to be observed.

At first and foremost, when private schools are forced to depend on limited tuition fees set by the maximum limit regulation, they are also forced to invest limitedly on infrastructure maintenance, upgrade, and in adopting innovative education practice in order to break-even. And, if the legislation prescribed tuition fees or the revenue is below what the market would offer, investment on increasing the education related infrastructure and the quality of the education will also be below the pace of what price liberalized private school market would have offered. And henceforth, the quality of the private education system is more likely to be compromised.

Likewise, the ability to charge below-feasibility maximum tuition fees as per the regulation shall also discourage new investment in private schools enough to meet the demand growth of private education possibly triggered by the guardians who are encouraged to transfer their children from public schools. A research from Samriddhi Foundation clearly states that cost structure and initial investment outlay for opening schools with infrastructure required for meeting Grade-C category cannot be feasibly fulfilled by the maximum tuition fee limit set for them. Therefore, a rational investor willing to make profit will not have incentive to establish schools of such category in order to meet the growing demand of private school education. Given the widening gap in supply and demand of private school education as the consequence of this regulation, the motive of this very regulation to make private school education affordable to normal people can instead backfire. With virtually no growth in number of private schools in compared to demand for it, the supply-shortage will rather create an underground economy whereby people with better connections and willing to pay more money off the table are more likely to get their children admitted at private schools while the marginal ones are left out.

This directive on setting maximum limit of tuition fees can be a costly constraint on growth of private educational institutes of Nepal. The directive meant for ensuring quality education to all at affordable prices, in itself can be a major factor hindering the growth of educational sectors. There are numerous reforms required in Nepal regarding its quality of education. In current scenario, the government must instead focus on improving the quality of public schools and not on decreasing competitiveness among private schools affecting its quality and lowering the possibility of low income household children to get a quality education.

 

Ayushma Maharjan

About Ayushma Maharjan

Ayushma is working as an intern in the research department of Samriddhi Foundation.

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A for Accountability: Understanding the Need for Market-Led Education

Originally published in Prespectives, The Himalayan Times on May 10,2015. 

School Leaving Certificate (SLC) examinations, to a large extent, are as important an identity stamp as anything else in Nepal. We group ourselves with strangers on the first meet by asking when they passed their SLCs. We don’t really ask for the other person’s age anymore; we infer it according to when they sat for their board examinations. We all have chances at five destinies; distinction, the first, second or third division or well, a non-destiny. In 2014, it was reported that only 28.19 percent students from public schools passed the SLC examinations compared to 93.12 percent students from private institutions. What causes or is causing this massive divide between the two?

Legalized private schooling entered Nepal only very recently; it was only after the third amendment of the Education Act in 1980 that private schools were allowed to operate in the country. Previously, in 1971, the state had nationalized all existing private schools and introduced standardized curriculums and operations. Inability to meet demands for a growing need of education from the public then caused the state to give in to private education as a supply alternative. Private schools are generally seen as a preferred substitute to public schools even now, a comparison based primarily on board examinations’ results, but that which connects and addresses numerous other sub-problems. A World Bank Report on Education in 2011 identifies a number of these sub-problems. These are inclusive but not limited to: high politicization of the teaching force, frequent transfer and changes of District Education Officers that cause changes in education rules and regulations, formerly nationalized schools, after 1971, have lost community ownership to a large extent and are seen as government ‘owned’ schools and a highly centralized education system structuration among others.

It is interesting to note that public schools in Nepal, more or less, go by the book and have comparatively airier and studier infrastructure than their private counterparts. It should also be noted that private school teachers are ‘less trained’ than their public counterparts (84.1% fully trained public school teachers, as opposed to 75.1% fully trained private school teachers in the Central region, Nepal Education Figure, 2014). They also provide free education up to grade 10 since 2000. Why then are people and more interestingly, the poor, also choosing private education over public education? What does a market-led education system provide that a state-controlled system does not?

Accountability. Both parents and teachers are accountable to each other because of a direct exchange of money for the service. The teacher’s length of duration of stay at the institution and pay is dependent on his/her performance and rate of absenteeism. An absence of a direct fee paying environment in public school causes parents to think that their obligation to educate their child ends with enrollment alone. Parents are more likely to be actively interested in the performance of their child and the teachers of the institution because they are spending hard earned cash for the service, thus willingly follow-up with their child on day-today school activities. Conversely, public school teachers are paid by the state regardless of their physical presence in the school and usually choose to turn up sporadically. He/she has little or no fear of being fired due to absenteeism as public schools operate from seemingly perpetual funds. A private school teacher is hence more likely to teach well because he/she is under constant watch by parents and the management alike. For a non-quality teacher shall mean dissatisfied parents and eventually, pulling the child out of the school in question.

On a similar line of questioning, does a larger classroom translate into better education? Surely no parent in their right minds would send their child to a less-spacious private classroom. But they do. Larger classrooms mean more number of pupils in the same class, thus more students that a teacher has to look after. Private schools have smaller student-teacher ratios, perhaps because of smaller classrooms, but because of which the teacher can better keep an eye on all children and also engage them well in academic interaction. Aggressive politicization of education has ultimately led to an erosion of public school infrastructures, where school appointments are nepotistic as opposed to meritocratic. Parents look thus, to be choosing accountable institutions with possibly fewer amenities than be handing over their children to the unaccountable, physically larger public institutions.

The process for registering a private school is wrought with bureaucratic hurdles and rent-seeking behavior on part of school inspectors and officials. A number of provisions such as having to seek letters of approval from similar schools beg revision. No school will want to invite and ‘approve’ competition while this is exactly what public schools lack. When a private school application is rejected, there are no formal reasons given for the decision thus the prospective school-head is unaware of what he/she is to do differently next year when re-applying. The District Education Office also takes 3 months to give its decision when it comes to private school registration which is decided on the basis of a 2-3 hour visit by a school inspector during the said duration after a lengthy procedure of stipulated documents procurement and submission. It is understood that private schools too need to follow basic guidelines when it comes to infrastructure upholding, but as previously stated, sturdy infrastructure does not always lead to quality education. Accountability on part of the teacher and parents does, which private schools are impressively better at providing in Nepal.

Labisha Uprety

Labisha Uprety

About Labisha Uprety

Labisha Uprety is a Research and Communications Officer at Samriddhi. She enjoys debating and likes her tea black with a little sugar.

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Too much to handle?

Not many in Nepal would deny knowing a thing or two about Tribhuvan University—this afterall, is the oldest and the largest of the Universities in Nepal. Every year tens of thousands of students from all across the country get enrolled in Tribhuvan University or affiliated colleges to pursue their higher education and those who pass the exam stand long hours in queue to submit the forms for their transcripts—me being one of those students this year.

Earlier this year, after having cleared my exams and the results being announced, like any other diligent student, I filled up the form and submitted it in the specific department. They took my form and other credentials (as required) and gave me a receipt saying that I could collect my transcript after two weeks. Two weeks later I went there as I was asked to—and 8 months hence, I still haven’t gotten my transcript. Why this happened has got to do with a few concerns that I have raised as follows:

1. Disastrous management
On any given day, one or the other important person is always absent in TU’s Balkhu office—“the Sir who’s supposed to sign this hasn’t come”, they say. I ask, “Will he come today?” “Don’t know”, they reply. And believe me, I was naïve enough to inquire if they had a human resource department and as you might have guessed they had no clue if they did. Such defines their ‘everyday’—I know because there was a time when I went there everyday! And the story doesn’t end with the management of Human Resource.

2. They are plain rude
I know that work pressure usually gets the best of us all—the University caters to thousands of students and each individual staff has to deal with a lot but that doesn’t give the officials the right to be rude of any student. As an institution that was set up to help students, they should stick to doing just that. But they don’t—you ask them a genuine question and nobody will be willing to answer. If you start asking for rationalization you are in for some very-very rude comments.

P.S. navigating the TU structure wasn’t engraved in our D.N.A and we are not sorry to ask questions when the answers shape up our lives.

3. Who’s responsible?
The whole place is mayhem—I have been there endless times in the last eight months and have been to every room and climbed every stair hundreds of time—enough to know that there’s no knowing who the person responsible for what is. One person sends you to the other, the other sends you to yet another and it continuous endlessly; until you finally decide to give up and seek for better opportunities abroad.

In my case, after the given fifteen days passed I showed up at the window and asked for my transcript and nobody responded (I wasn’t taking to the walls, there were 4 individuals in the room and from the way one of them was munching popcorns and chatting away with the rest, I took it for granted that they could otherwise talk). For some reason, after having waited for a while, one of them said, “We can’t give you your transcript”. Curious, I asked why and they went back to the silent treatment. I kept on asking and after what seemed like an eternity, I was asked to talk to the ‘Sir’ of that department and so I did likewise. And this ‘SIR’ wouldn’t tell me why he’d decided to not give me my transcript and like a parrot he endlessly said, “I can’t; I can’t; I can’t…” I took a deep breath and asked again, “Why? If you decide to not give me my papers, you should at least tell me why that’s being done”, and yet the same response. He was a dead end.

Over the duration of time, I went to that place end number of times—talked to almost all departments—nobody had an answer. In their defense, all of them repeated in some practiced tone, “We don’t know what specific law there is, but there should be one.” (Where—Out there in the wild; in some imaginative dimension?)

4. Accountability isn’t their cup of tea, either
So in my case, this man in the transcript department who wasn’t even ready to name himself knowing all too well that he’d wronged me, in the last meeting (first week of November) quite bluntly said that I haven’t even filled the form and the department did not have the stack of paper I submitted in April (luckily for me, I had the receipt they stamped). And then when I forced him to talk to his higher officials who pretty much knew that I had all rights to get the transcript, he shamelessly said, “I have never seen this girl before today”. Nothing will ever beat his lie!

What was hilarious was that after having disappeared from his office, he came with a piece of paper and said that according to that particular piece of paper, I am not eligible for getting my transcript. I inquired that he show me a paper and he said, “T.U’s internal document—can’t show it to a student”. He wouldn’t even let me touch that paper and I would never know what was written in there.
Quite honestly, if my fate is decided on the basis that piece of paper, I should know why. Then I said, as a student who has been wronged, I can sue them (there’s already a case running against them) and then they came up with a long list of other excuses—finally giving up and saying after a month I could go and collect what they should have given to me eight months ago!

From April, 2014 to November, 2014 I’ve been to that place so many times that I’ve lost count and quite frankly, I am beyond tired and yet nobody ever gave me an answer as to what exactly the problem was—from what I know, I am legally eligible to take my transcripts and it is only because of delay from their part that have cost me the bar exam this year; other transactional costs—well, I have lost track!

I know this scenario is not the most generalist of observations—many have refrained from even talking about it. During all this time, I was not the only student to have suffered—there were countless others. And I hope there was a respite for us all. For starters, perhaps what we need is to stand up against the mammoth system that thinks that being students puts us in a disadvantaged state from where we can’t even imagine putting up a fight. Well, about time this changes!

Anita Krishnan

About Anita Krishnan

Krishnan holds dual degrees--in law and sociology. Currently, she works as a Research Associate at Samriddhi, The Prosperity Foundation.

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