Friday, December 12, 2014

Capping Jordan’s private schools tuition fees: A myth-based Government action!


Jordan’s educational sector is massive. In 2013, 1.726 million students attended government, quasi government and private schools across Jordan. 69% of students attend governmental schools, 24.6% attend private schools and 6.5% attend UN funded UNRWA schools in the refugee camps. Total expenditures of the governmental schools totaled 758 million JDs in 2013.

Overcrowding remains a problem in government and UNRWA schools. In 2013, 8% of Government schools still used the double shift system where students are split between a morning shift and an afternoon shift. In UNRWA school, the double shift system spans an alarming 90% of its schools. In private schools, double shifts do not exist.

What of the educational quality difference between public and private schools? The best indicator remains a mystery: Despite officially writing to the Ministry of Education to get the overall Tawjihi pass rate for private schools and public schools separately, the ministry was adamant in not supplying this data point in specific. The simple figure of the pass rate for private schools students in Tawhiji vs. that of government schools seems to be a state guarded secret that an official letter and 2 months of follows-ups could not reveal! There are tell-tale signs though: In the recent 2014 Tawjhi results, 342 public schools had a zero% pass rate in Tawjihi. Moreover, all but one of the top scorers in the scientific stream came from private schools.

Reliance on private schools varies by region in Jordan. Nationally, private schools had 425,000 students across Jordan, with the majority being in Amman. In Amman, only 55% of students attend government schools (lowest rate in the country) while in Mafraq 92% of students attend government schools (highest rate in country). The rest of the students – not enrolled in government schools- are primarily served by private schools.

A big myth on education in Jordan is that public schools are free. In fact, government schools are far from free: On average government schools effectively collected a tuition fee of 637 JDs per student in 2013. These tuition fees are paid by tax payers (Government tax receipts), donor countries (aid funds) and future tax payers (Jordan’s public debt). The Government school system received 758 million JDs in 2013 in funding from the central government (the budget for Government education). I.e. the operational expenses of the Government schools amounted to 637 JDs per student in 2013. And this does not take into account the cost (and opportunity cost) of real-estate used by the Government schools. According to statement by the association of private schools, 90% of private schools in Jordan have annual tuition fees of less than 1,000 JDs per student, a figure that is not too far from public schools.

The draft bylaw that classifies private schools and puts caps on their tuition fees based on their classification is misguided. The government _whose own record in education is dismal and far from cost effective_ seems to think it has the recipe for optimizing private sector education. It is wrong. The private schools sector is a competitive and for profit sector that should be left free of government meddling in setting the prices of the educational services provided. Private schools owners tie up expensive real-estate in Jordan’s major cities to provide educational services in demand by large swathes of the population. They also pay taxes, create jobs and incur major operational costs in addition to relieving the government budget from massive extra costs tied to serving a quarter of the student population. They have a right to seek a respectable return on investment. Else they are better off selling that real-estate to housing projects and exiting the educational sector all together. Making a profit does not preclude them from being good educators.

Setting price caps, in a fully competitive sector, is bad policy. The notion that offering educational services must not be profit seeking, or self sustaining, could also result in a much reduced supply of private schools. Furthermore, price caps, if set well-above average tuition fees may actually back fire and result in higher tuition fees as schools raise fees citing the government approved/recommended tuition cap! Government oversight of private schools is of course still needed. Schools must abide by rules and regulations that insure respectable educational standards are followed.

There is no denying that tuition fees of private schools remain an issue for parents. On this, the Government can help by mandating 12 year tuition fees contracts. This is far different from setting or capping tuition fees. In a 12 year tuition fees framework contract, parents would be given the full tuition fees scale for all grades when their children enroll in the school. The school would be allowed to increase tuition fees for already enrolled students by a maximum rate every year (capped at the official inflation rate of that year). Every year, the private school will be free to change its tuition fees scale for all new enrolling students. In this approach, a school whose success drives more demand for its services can raise its rates for new incoming students as it sees fit, without penalizing existing students already enrolled in it by a massive rise. This is especially suitable because the existing students’ word of mouth and achievements are influential in enhancing the school’s reputation and brand. If the school sets its tuition fees rates well above what is considered reasonable, parents of prospective new students will shop around for other options. While students already enrolled in the school will be shielded by the 12 year tuition contract.


A final point on accountability. Badly run private schools will never be sustainable. Parents who pay tuition fees are much more likely to move their kids to different schools if they feel they are not getting good value for money. Private schools that lose money will eventually go out of business. It is in the government schools that accountability is lowest: Funding is guaranteed regardless of academic results and the students are a captive audience with little options as they cannot afford the alternative. It is in introducing accountability in government schools that the efforts of the ministry should be focused, not on meddling with private schools tuitions whose results far outshine those of the government ones.  

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