Fee schools feel chill

Fee schools feel chill

Parents delay payments for online classes, putting outlets in jeopardy

Students check documents before sitting a central university admission test at Rittiyawannalai School in Sai Mai district on Saturday. The busy exam season is underway as many private schools are facing financial constraints brought on by the Covid-19 pandemic.
Students check documents before sitting a central university admission test at Rittiyawannalai School in Sai Mai district on Saturday. The busy exam season is underway as many private schools are facing financial constraints brought on by the Covid-19 pandemic.

Few sectors have escaped the havoc wrecked by Covid-19 and privately run education is no exception.

The pandemic has hit private schools, vocational colleges and universities where it hurts the most (their pockets), with up to 10% of private schools in danger of going under and several universities being taken over if no help is forthcoming.

Two years of pandemic have been so difficult for some private educational outlets that they feel they are reaching the end of their tether. They say online classes were the crux of the problem.

The crisis started when the Education Ministry directed schools nationwide to push back the reopening of the new school term when the pandemic broke out.

Parents were unsure when their children could return to school. When it became clear the virus would persist longer than anyone had thought, classes had to resume remotely.

Although online classes had commenced, some parents were paying only partial tuition fees, if any at all. They argued the schools were using less resources holding classes online and so should not be charging fees in full.

At the same time, many parents themselves were feeling the financial pinch after they were laid off or furloughed.

The Bangkok Post has talked to private institutions including international schools and universities to get deeper into this phenomenon, following the Office of the Ombudsman finding that many private schools have struggled with liquidity during the pandemic and has asked Prime Minister Prayut Chan-o-cha to step in.

Parents, schools in the same boat

Padiwaradda Phongsuwan, director of Pongsuwanwittaya, a private school in Lum Luk Ka district of Pathum Thani, said parents dodging tuition fees caused the biggest setback for private schools' finances last year.

Despite the return of some on-site learning in the second term, some parents were still paying off outstanding fees from the first term.

Ms Padiwaradda said the school had recommended that parents pay full tuition and associated fees first with the promise that the school would reimburse any unused portion of their payments later.

The reimbursements were planned for November last year for expenses including swimming and computer lessons which were suspended during the outbreak of Covid-19.

Private schools had less revenue coming in and were struggling to balance their accounts as they had fixed costs to contend with, such as salaries for teachers, assistant teachers and cooks.

"Our expenses remained the same. But parents questioned why they should pay the same fees when their children were not attending on-site classes," she said.

For example, the cost of students' meals at school also covers cooks at the canteen. The school now must absorb the expense.

The schools that can afford it have dipped into their financial reserves to handle fixed costs. However, there is still the matter of unpaid fees.

Ms Padiwaradda said that at her school, 30-40% of fees remain unpaid from the first term of last year. The figure rose to 50% in the second term.

"We understand what our parents are going through. We suggested they take care of specific payments that are overdue such as swimming or computer classes.

"Some parents faced pay cuts at work or were furloughed. We are in the same boat," she said.

The school has appealed for the parents' understanding of its present circumstances as well, including that teacher salaries alone amount to more than 1 million baht a month.

Ms Padiwaradda said her school fought hard to return to on-site teaching in December last year after convincing the school district that its public health safety measures were sound.

While parents received a 2,000-baht, one-off remedial payment from the government during the pandemic, private schools were not getting any financial help.

Private schools can still draw on the educational support fund or school milk fund from the government. However, they are barred from spending the fund on operational costs such as teachers' salaries.

The school director said it would make a great deal of difference to private schools if the government would allow the support fund to be used for causes which can sustain them during this time.

She said arrangements may be made for the government to subsidise half the teacher salaries and offer the subsidy directly to the teachers.

Large schools are better able to survive the financial crunch. It is the smaller schools which are at risk of closure.

Schools that cannot stay float must notify the authorities of their plan to liquidate at least a year in advance so as to give parents time to find new schools for their children.

Ms Padiwaradda said some 10% of small private schools with no more than 100 students run the risk of closing down due to the pandemic.

"It's a tough environment out there," she said. She was hoping for better in the new school term which begins in May. It is now summer break for schools.

"Everything should return to normal in the next school term, provided there is no new Covid-19 variant," Ms Padiwaradda said.

Universities must reinvent

Universities also encountered a similar problem: it is taking parents longer to pay their children's tuition fees.

Many universities rolled out packages of assistance for students even at their own expense. Private universities are in various states of financial duress and three or four of them are in the process of being taken over or closing permanently, with the pandemic the last nail in the coffin, says Pornchai Mongkhonvanit, Siam University rector and president of the Association of Private Higher Education Institutions of Thailand (APHEIT).

"It's dire straits all the same," he said.

Private universities with solid finances are better able to weather the pandemic storm. Those with no cash to fall back on are in for a struggle, especially when there is a lack of state subsidy for private universities.

Many were medium- and small-scale businesses which opened lucrative higher-education institutes. Now that the pandemic has left them deep in the red they are turning to the association for help. However, the association has many universities under its wing to care for.

Mr Pornchai said tertiary institutions must reinvent themselves to stay relevant in the longer term. They should combine disciplines to meet academic and workforce needs in emerging fields such as the merger of science and public health.

"The private universities are keeping their nose above water," he said, noting their survival may also hinge on carving a niche by creating specialised study courses.

He added financial relief from the government may come with strings attached, which could undermine their flexibility and independence.

There has been state assistance to private universities although it was small in quantity compared to that given to state universities. The assistance came mostly in the forms of research and training.

International schools left in the cold

The pandemic has also forced international schools to tighten their belts and find ways to help parents cope with various constraints.

Usa Somboon, director of International School Bangkok (ISB) and president of the International Schools Association of Thailand (ISAT), said the pandemic has had far-reaching effects on school operations and parents.

The schools have offered to reimburse expenses for suspended activities to parents who are also given the option of paying tuition fees in instalments or over an extended period.

The ISB has not raised its tuition fee in the past two years and parents are still paying the fees. The 174 international schools under the ISAT are among those not eligible for subsidies or financial support from the state.

She called on the government to consider allowing foreign investments in schools and increasing the intake of foreign students.

Help in the form of loan

Meanwhile, Deputy Education Minister Kanokwan Vilawan said private schools in financial trouble can each obtain a loan of up to three million baht from the private school fund.

The fund is off-limits to some private schools however, such as international schools, which are ineligible to receive state subsidy or support.

The loan comes with a low interest rate of 2% per annum, which has been disbursed to 465 schools affected by the pandemic. Those which borrowed before the pandemic at 4% per annum also saw the interest cut to 2% as well.

Teachers who took out loans from the private school welfare fund were enjoying some reprieve after the interest was lowered from 4.5% per annum to 4%.

In addition, regulations will be revised to allow small private schools with fewer than 120 students to apply for a loan from the fund. Ms Kanokwan said she planned to ask the cabinet to inject more cash into the fund, which is left with only 200 million baht in its coffers.

Commercial banks approached by several pandemic-battered schools looking for loans were reluctant to extend them credit in light of the difficult economic condition.

"That's where the fund comes in," the deputy minister said, adding some parents facing dwindling income opted to move their children from private to state-run schools.

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