Last Straw: The Case of Private School Ownership in Nepal

On November 18, 2014:

The impending bill to amend the Education Act, with a significant focus on transferring the ownership of private schools to respective communities, has aroused a vibrant debate on the future of public-private partnerships in education. While the government appears eager to launch a massive public discourse on effective policy design, lawmakers lobbying on behalf of the private education sector have raised serious objections regarding the proposed change. However, there remains an emergent need to evaluate the grounds for a potential policy amendment, and the widespread repercussions in the field of education.

Five months back, the Nepalese government hinted at possibly amending the Education Act when announcing the policies and programs for the current fiscal year at the Constituent Assembly convention. In theory, vague promises outlining ambitious goals are made every year; however, this specific agenda regarding private school ownership drew more attention because the official document explicitly mentioned that "necessary amendment will be made to prevailing Education Act."

Recently, private school operators submitted a five-point memorandum to the Ministry of Education, demanding that the existing legal mechanism of private school registration be maintained. Moreover, the lawmakers in support of private schools have vigorously voiced their dissent against the government's plan of possibly transferring the private school ownership into a cooperative modality. Further, they have claimed that any such transformation of the private school ownership will be an absolute breach of Right to Property, safeguarded by the Interim Constitution of Nepal.

The Ministry of Education's primary interest in having private academic institutions registered as cooperatives stems from the notion that private education sector is no longer social service oriented. On the other hand, the lawmakers' vehement dissidence originates from their primary occupation: sixteen members in the current Constituent Assembly own private schools and have thrived in the education sector for over twenty years. Under these circumstances, it is essential that one conducts a comprehensive analysis in an insightful and nonpartisan manner, given the politically contentious nature of policy spanning private school ownership.

Although the number of government schools in Nepal is five times as large as that of private schools, government schools suffer from poor infrastructure and dismal test scores of the students, relative to their counterparts. Anecdotal evidence suggests that an increasing number of private schools have grown tremendously in recent years, attracting a larger student population to their rigorous training in English as well as a myriad of extra-curricular activities. This has, unfortunately, led to a growing animosity towards most of the private schools that charge exorbitant prices, thus resulting to massive profits. Consequently, the government's vision towards making private institutions more accountable towards the society is much needed.

In the past, the government has taken certain steps towards ensuring equitable access of education. Six years ago, the finance ministry levied education service tax, amounting to five per cent of the fees collected from students, aimed at investing the collected sum towards improving learning outcomes of children residing in remote parts of the country. The government, however, subsequently lowered the tax rate to a meager 1% in response to active protests from private school operators and the guardians.

However, the government has not succeeded in executing policy changes in practice, specifically not being able to monitor the operations of an increasing number of private schools. Worse, it has consistently failed to improve the learning outcomes of children attending public schools, evident from the School Leaving Examination marks for the last ten years. Given that the government's efforts to improve the deteriorating public education sector have gone awry, it's underlying interest in transferring the private school ownership to respective communities lacks sufficient grounds.

Even though transforming private school ownership to empower the communities appears to gain massive populist support, the likelihood of government successfully implementing such a policy paradigm remains bleak, specifically in the context of the recent past. Rather, skeptics interpret this government stunt as a desperate mechanism to dispel dismal public school performances from the minds of the general population.

On the other side, private academic institutions registered as profit-oriented entities under the Company Act have unabashedly exhibited their sheer reluctance towards taxation in the past. To exemplify, their call on the government to scrap the 5% educational tax rested on an ideology that the state should not impose taxes in education, a fundamental right as per the constitution. Isn't a private school owner hypocritical for talking about equitable access to education while charging exorbitant fees unaffordable by the average Nepali household?

Additionally, private schools appear to use test scores in the nationwide exams as a primary toolbox to assess their contributions towards the society. It is true that, on an average, a child attending private school significantly outperforms her counterpart in the public school, as per the academic mark sheets. However, students in private schools often come from relatively wealthier families with more educated and motivated parents. A direct comparison of student achievement across school types would, therefore, provide a misleading picture of the relative effectiveness of private schools over government schools.

Undoubtedly, the current euphoria surrounding the nonfeasible plan of transferring private school ownership to respective communities is justifiably premature. This necessitates that lawmakers lobbying on behalf of the private schools work in solidarity with the government towards facilitating healthy reforms in the Education Act. They should also refrain from encouraging private school proprietors to launch street protests and shut down classes in the name of political pressure.

Moreover, the government needs to proceed with caution before carrying out any policy mechanism hastily, even if it is aimed at enhancing equitable access to education. More importantly, it behooves the state policy makers to focus predominantly on improving learning outcomes of children attending public schools.

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