The Business of Education: Are Schools More About Profit Than Students?

You drop your child off at school every morning, and somewhere in the back of your mind, a question keeps nagging at you: "Am I paying for my child's education or someone's business expansion?" If you're thinking this, you're not alone. Millions of parents are grappling with the same uncomfortable reality.

The numbers tell a story that's hard to ignore. 44% of Indian parents report that their children's schools have hiked fees by 50-80% in just three years, according to a recent LocalCircles survey. Meanwhile, student enrollment has actually dropped from 26.02 crore in 2018-19 to 24.8 crore in 2023-24, a 6% decline, despite fees having skyrocketed.

So what's really happening? Are schools becoming businesses first and educational institutions second?

In tier 1 and tier 2 cities, private school tuition fees range from Rs 2,500 to Rs 8,000 per month. But here's what schools don't tell you upfront: this is just the beginning.

Parents are blindsided by what the industry calls "additional charges." Maintenance fees, lab fees, technology fees, and the list goes on. One school shared a fee structure where nursery admission costs Rs 55,600, plus a Rs 8,400 "parent orientation fee".

A 2021 survey found that 60% of parents expressed dissatisfaction with rising education costs, yet they feel trapped. The fear of their child being left behind in an increasingly competitive world keeps them paying these escalating fees.

Indian edtech startups alone received $3.94 billion in investment across 155 deals in FY22. The government allocated Rs 73,498 crore for school education in Budget 2024-25, the largest allocation ever. Education has clearly become a sector that attracts serious money.

But who's really benefiting from this investment boom?

Schools have discovered that education, unlike other businesses, has a captive audience. You can't exactly boycott education, as your child needs to go to school. This creates what economists call "inelastic demand"; no matter how much prices rise, parents have to pay.

Private schools justify their fee hikes by pointing to infrastructure improvements and better facilities. Schools claim they need 10% annual fee increases to improve infrastructure and attract qualified permanent faculty. While these are legitimate concerns, the question remains: are these improvements truly benefiting students, or are they marketing tools to justify higher fees?

Beyond tuition fees lies a list of charges that can double your education budget. Books from specific publishers, uniforms from designated stores, mandatory extracurricular activities, technology fees for tablets that may or may not be used effectively, and annual trips that cost more than many families' monthly income.

Parents are increasingly complaining about hidden costs, with some resorting to loans just to afford decent schools for their children. When education requires a loan, we need to ask: have we crossed the line from education to exploitation?

Coaching classes have been blamed for the neglect of school education, putting students under mental stress and adding financial burden on parents. Here's the cruel irony: schools that charge premium fees often don't prepare students adequately for competitive exams, forcing parents to pay additional coaching fees.

This creates a vicious cycle. Parents pay high school fees, then pay again for coaching classes because the expensive school education isn't sufficient. Some families spend more on coaching than on school fees, which is a clear indication that something is fundamentally wrong with the system.

While schools focus on profit margins, what's happening to actual learning? The emphasis on infrastructure over education, facilities over faculty quality, and marketing over meaningful education is creating a generation of students who are customers first, learners second.

Students are experiencing unusually high stress levels, not just from academic pressure, but also from the awareness that their parents are struggling financially to afford their education. This adds an emotional burden that no child should carry.

It's time we ask schools the hard questions they've been avoiding:

This isn't just an Indian problem, but India's situation is particularly challenging due to the vast economic disparities. While countries like Finland and Singapore focus on making quality education accessible, India seems to be moving toward making it a luxury commodity.

India serves 24.8 crore students across 14.72 lakh schools, making it one of the world's largest education systems, yet access to quality education is becoming more exclusive rather than inclusive.

First, demand transparency. Schools should provide detailed fee breakdowns and justification for increases. Form parent committees that can collectively question unreasonable fee hikes.

Second, evaluate what you're actually paying for. Is the expensive school delivering better learning outcomes, or just better marketing? Sometimes, a less expensive school with dedicated teachers delivers better education than a fancy campus with poor teaching quality.

Third, lobby for regulatory oversight. Education should have price controls and quality standards, just like other essential services.

Education is indeed a business, but it should be a business that serves students first. The current model, where schools prioritize profit margins over learning outcomes, is unsustainable and unfair to families.

We need schools that view parents as partners, not customers to be exploited. We need educational institutions that justify their fees through transparent accounting and measurable improvements in student learning, not just fancy buildings and marketing campaigns.

The question "Are schools more about profit than students?" shouldn't be rhetorical. It demands an answer from every school charging premium fees while delivering mediocre results.

As parents, we have the right to demand value for our money and transparency in fee structures. Our children deserve schools that invest in their future, not just their own profit margins. It's time to hold schools accountable and ensure that education remains about learning, not just earning.