High-end private schools in Bengaluru are asking parents who are unable to pay fees to take up loans for the same. Narayana Educational Institutions, one among many such schools, has circulated fliers for a loan-for-school fee scheme. This has come as a shock to parents who are struggling with job loss or cut in salaries due to the pandemic.
"From around two weeks, every morning between 7 and 8, I receive a digital pamphlet on my WhatsApp number. It has details of a financial institution named FinanceFeer. It mentions zero/low-cost interest, EMI options, insurance coverage for education fees etc. And this is a wing of Narayana Techno School where my daughter studies in the fourth standard. There is also a reminder on daily basis on payment of the first installment of school fee for the current academic year which is 43,000 and once I see that message and there is a blue tick, the message is deleted", explains Deepika Mohan.
Schools’ behaviour has raised concerns among parents and education activists. There are similar offers from few other schools, explains BN Yogananda, member, Karnataka private schools parents' association coordination committee. "I have been chasing these schools and their finance wings for a few days. The schools and the finance handles mention that NBFC (Non-Banking Financing Corporation) allows them to bring in such schemes. Though not under RBI directly, these are equal to finance companies that promise big interest for your deposited amounts".
No matter what the company is or the offer they give, any school offering such a scheme to get their fee paid is bizarre, says Mr B N Yogananda. He explains the working pattern of this scheme. “The financial institution pays off the entire year fee to the school on behalf of the agreed parent. The parent then gets a monthly EMI option where they can take interest-free EMIs for the first three to six months and pay the rest with prescribed interest rates. Parents end up handing over attested blank cheques to these companies. In several cases, the schools will also be an investor or shareholder of these companies,” he said.
The risk factor is not just the vicious finance, interest circle but the marketing of school education in such a manner. Schools are yet to tell parents the complete amount of fees for this academic year. And most people have either lost jobs or struggling with pay cuts due to the pandemic. In such times of distress, schools coming up with these 'solutions' is very inhuman, complain parents.
In case a parent is unable to clear the school fee completely or discontinues the child's studies and decides to shift to another school, the school will hand over the transfer certificate of the student to the finance company instead of the parents, as per the setup. Until the parent clears off all interest and premium mentioned by the finance company, their child can't admit into any other school due to this, as per the rules. The parents will be left in a lurch either way. Until now, no parent has taken this offer and the tug of war between school management and parents are still on.