Survival Of Education Sector And Fee Financing

The new normal in the education might cost some extra bucks for the schools as well as parents and thus create more problems.


The Corona crisis has not only brought a health emergency but also an economic emergency. Almost all the sectoral activities were put to a halt before the unlocking process started. However, some sectors are still closed owing to the threat of virus spread. The education sector is one of those sectors only which is still suffering the brunt. 

After the Unlock 2.0 was announced, the schools were still kept close till July 31. It is expected that the government will continue to maintain the status quo on schools for quite some time now as children are the most vulnerable to the virus. 

The post-COVID era is not expected to bring some relief for the sector as there would be a drastic change in the situation which would bring in new normal for the schools as well as parents. The new normal in the education might cost some extra bucks for the schools as well as parents and thus create more problems.

With schools being closed and a lot of parents suffering pay cuts and job losses, the whole education sector is reeling under the problem of cash flow and fund management. A lot of private schools had to slash down the number of teachers while a lot of parents were either forced to change the schools of their wards or drop them out for the current academic year. 

The pandemic is still spreading and there is no clarity on when the situation will get better. With so much uncertainty prevailing, the fee financing model comes as oxygen for the entire education sector. There is a lot of buzz about schools not getting fee due to various reasons and parents fighting for the fee waiver, obviously owing to the financial crisis they are suffering. Therefore, the fee financing model acts as a bridge between the two so as to give them a sigh of relief. 

The model comes as a win-win solution for both the stakeholders. A fee financing company pays the entire year’s fee upfront to the school while parents are facilitated to pay it back in monthly installment without the burden of interest. The model offers Zero-interest and no-cost EMI with a moratorium facility for the parents. 

Since the fee financing company pay the entire year’s fee in advance to the schools, they can leverage on that fund and plan out the expenses in a much better way. They can even use that money to enhance their infrastructure which will help them in the long run. They can also avert the risk of dropouts and low enrollment rates as parents will not have to bear the burden of paying the fee at once. 

Apart from this, the parents reap the benefit of zero cost EMI and zero interest. The fee financing companies also offer moratorium to the parents which is also interest-free. With fee financing facilities at their doorsteps, the parents will also not be compelled to shift their wards to the schools with fewer infrastructures or drop them out. 

Therefore, in the crisis fee financing model create a synergy effect in the education ecosystem and release the pressure from both parents and schools. So, while accepting the other new norms before opening the schools, the schools should join hands with the fee financing companies so as to make parents aware of the option so that they can avail the facility to ensure uninterrupted quality education for their wards. 

With some companies coming forward in the fee financing segment, the government must extend support to ensure that its Education for All initiative is not only fulfilled rather it gets enhanced with the motive of providing ‘Quality Education for All’.  

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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