Parents in Mumbai stare at study loans & EMI fees, look at govt schools

MUMBAI: For parents of schoolchildren, the pandemic has been a double whammy. While they are still to get their Covid-hit finances in order, they have had to resort to borrowings to meet the rising costs of schooling too. From taking loans, paying EMIs on school fees, seeking more instalment options and switching to government schools, the act of balancing quality education with how deep one's pocket is seems to be getting trickier by the day. Broken by the pandemic and a simultaneous fee hike at a private CBSE school in Dadar where his kindergartener studied, Mahim resident Sudhir K (named changed) decided to shift his daughter to a BMC-run school offering the CBSE curriculum, which started in 2020. An event management professional, Sudhir could stay afloat that year, thanks to "goodwill" money paid by his employer. "There was no work," he said. A year into online classes, the school decided to increase fees."I decided enough was enough. I started applying through RTE in other schools but did not make it. There were no other affordable private CBSE schools in my locality," said Sudhir. But while for him, the choice was shifting schools, poorer parents are left with few options and may even have to withdraw children from schools.Luckily for Sudhir, the BMC-run school was enrolling early birds in its year of inception. "Now I hear they have applications pending. Besides there being no tuition fees, the BMC school also provides mid-day meals," he said.In 2020-21, nearly 350 students in the city shifted from private schools to the then newly opened CBSE and ICSE schools run by the BMC, as per data shared with TOI by the civic body. The number has since increased, as have civic-run CBSE, ICSE and IB schools (see box).Parents said the push from schools for fees in lumpsum or in biennial or triennial advances collected through post-dated cheques, and incremental late fees, gives them no breathing space. The pandemic intensified demands for waivers, concessions and monthly payment options. It has prompted schools to tie up with financial firms to offer EMI options to parents either at zero cost or at interest, depending on the number of instalments. For the upcoming academic year 2023-24, for instance, an ICSE school in Khar, through its tie-up with one such firm, has offered three payment schedules of seven, nine and 12 months for grades 1-5.The first option to pay annual fees of Rs 1.1 lakh by October is at zero extra cost whereas the other two attract interest rates of 1.75% and 2.95%, respectively. "It draws students from many business families in the area who suffered losses in the lockdown. Many parents started asking for monthly payment options," a parent said.A city-based firm offering a payment platform said an increasing number of schools in Mumbai region are roping in its services. As fee financing companies came up, parents signed up to pick debt and ensure tuition can be paid on EMI. "Both my daughters attended an international school in JVLR. But after I stepped down as CEO and started my own venture, I initially took a loan to pay the fee, but I could not cope with a fee hike," said Om Pradhan, a parent.A new survey by PNB MetLife and Nielsen IQ revealed parents are spending up to Rs 5.3 lakh a year on their children's education and extracurricular activities and are even willing to make lifestyle adjustments. The research, titled 'Financial Planning in the Era of Rising Education Cost', which explores the needs, influences and barriers for parents planning their children's education, was conducted in April 2023."More than one in three parents misjudge the expense they would incur and end up overshooting their budget by 27%," said Sameer Bansal, chief distribution officer of the insurance firm.Take the example of Milind J (name changed), whose two children study at a Thane school. He took a personal loan of Rs 5 lakh to cover overheads "including fees". "All of it has to be paid by September," he said. Another parent has pledged his gold for Rs 2.6 lakh. The principal refuted claims that parents are not informed about late fees. "We regularly communicate everything to parents," she said. What about the above-10% fee hike for 2023-24 and the lack of instalment options? We have followed these schedules for years.During the pandemic we did not increase fees. This year we have. So, next year, we won't," she said.The dearth of "good affordable schools" leaves parents to grapple with the question of what quality education is. Sudhir, though, bats for a public education model. "If you have good schools, why would parents not pay? What are good schools anyway? Any school can be turned into an 'achcha' school," he said.Mumbai: For parents of schoolchildren, the pandemic has been a double whammy. While they are still to get their Covid-hit finances in order, they have had to resort to borrowings to meet the rising costs of schooling too. From taking loans, paying EMIs on school fees, seeking more instalment options and switching to government schools, the act of balancing quality education with how deep one's pocket is seems to be getting trickier by the day. Broken by the pandemic and a simultaneous fee hike at a private CBSE school in Dadar where his kindergartener studied, Mahim resident Sudhir K (named changed) decided to shift his daughter to a BMC-run school offering the CBSE curriculum, which started in 2020. An event management professional, Sudhir could stay afloat that year, thanks to "goodwill" money paid by his employer. "There was no work," he said. A year into online classes, the school decided to increase fees."I decided enough was enough. I started applying through RTE in other schools but did not make it. There were no other affordable private CBSE schools in my locality," said Sudhir. But while for him, the choice was shifting schools, poorer parents are left with few options and may even have to withdraw children from schools.Luckily for Sudhir, the BMC-run school was enrolling early birds in its year of inception. "Now I hear they have applications pending. Besides there being no tuition fees, the BMC school also provides mid-day meals," he said.In 2020-21, nearly 350 students in the city shifted from private schools to the then newly opened CBSE and ICSE schools run by the BMC, as per data shared with TOI by the civic body. The number has since increased, as have civic-run CBSE, ICSE and IB schools (see box).Parents said the push from schools for fees in lumpsum or in biennial or triennial advances collected through post-dated cheques, and incremental late fees, gives them no breathing space. The pandemic intensified demands for waivers, concessions and monthly payment options. It has prompted schools to tie up with financial firms to offer EMI options to parents either at zero cost or at interest, depending on the number of instalments. For the upcoming academic year 2023-24, for instance, an ICSE school in Khar, through its tie-up with one such firm, has offered three payment schedules of seven, nine and 12 months for grades 1-5.The first option to pay annual fees of Rs 1.1 lakh by October is at zero extra cost whereas the other two attract interest rates of 1.75% and 2.95%, respectively. "It draws students from many business families in the area who suffered losses in the lockdown. Many parents started asking for monthly payment options," a parent said.A city-based firm offering a payment platform said an increasing number of schools in Mumbai region are roping in its services. As fee financing companies came up, parents signed up to pick debt and ensure tuition can be paid on EMI. "Both my daughters attended an international school in JVLR. But after I stepped down as CEO and started my own venture, I initially took a loan to pay the fee, but I could not cope with a fee hike," said Om Pradhan, a parent.A new survey by PNB MetLife and Nielsen IQ revealed parents are spending up to Rs 5.3 lakh a year on their children's education and extracurricular activities and are even willing to make lifestyle adjustments. The research, titled 'Financial Planning in the Era of Rising Education Cost', which explores the needs, influences and barriers for parents planning their children's education, was conducted in April 2023."More than one in three parents misjudge the expense they would incur and end up overshooting their budget by 27%," said Sameer Bansal, chief distribution officer of the insurance firm.Take the example of Milind J (name changed), whose two children study at a Thane school. He took a personal loan of Rs 5 lakh to cover overheads "including fees". "All of it has to be paid by September," he said. Another parent has pledged his gold for Rs 2.6 lakh. The principal refuted claims that parents are not informed about late fees. "We regularly communicate everything to parents," she said. What about the above-10% fee hike for 2023-24 and the lack of instalment options? We have followed these schedules for years.During the pandemic we did not increase fees. This year we have. So, next year, we won't," she said.The dearth of "good affordable schools" leaves parents to grapple with the question of what quality education is. Sudhir, though, bats for a public education model. "If you have good schools, why would parents not pay? What are good schools anyway? Any school can be turned into an 'achcha' school," he said.