Why no student complains that he has been compelled to pay an “illegal fee”!

This article was triggered by  two articles in the Hindu Newspaper
http://www.thehindu.com/todays-paper/tp-opinion/privatising-professional-education/article5984119.ece ,
http://www.thehindu.com/todays-paper/tp-opinion/the-case-against-privatisation-of-education/article5995071.ece
and Ravi Iyer’s blog post
http://eklavyasai.blogspot.in/2014/05/recent-articles-in-hindu-arguing-for.html

However, my article here is not a direct comment on the three articles mentioned above. The common issue being discussed is privatization of higher education; but since my comments are in a specific direction of their own, I decided to post this as a stand-alone article.  

I have always been disturbed to hear about malpractices and tax evasion in many private educational institutions. If you ask your acquaintances who have got admission in "good" institutions, you will find that about 50% have paid "voluntary" or involuntary "donations" or "capitation fees". It has always puzzled me that they don’t blow the whistle even after they complete their studies and are safe from retaliation by their institutions. In fact, they don’t seem to harbor any negative feelings about such institutions after they pass out. Usually no one will testify in any court case against “their” institutions initiated by any government department.

Only recently, I understood why this is case. The students and their families feel that the denial of educational opportunity of the type or quality they desire is the worst form of cruelty. For many, it is the denial of right to live their lives in a form acceptable to them – the only life that they are going to live. That is why some of them commit suicide when denied the education they want.  No wonder that paying money, even to an extent it becomes a major burden on their families is the lesser evil. Another reason is that those who take capitation fees don’t look any worse than the politicians who mismanage and exploit public institutions. In fact, many of those who run “profitable” educational institutions are the same politicians!

Policy makers should take all this into account. Government spending on education will never be enough to give quality education to all those who desire it. Students with expectations of a good education will not be willing to accept “no admission” as an alternative! It is their life! They won’t give it up for anything, not even for preventing malpractices and tax fraud in educational institutions.  The right to life and liberty cannot be a reality without the right to education. The country has recognized the right to education of the children of those who cannot afford to pay fees, but the right is equally important to those whose parents are willing to spend one third or more of their life savings to give them a good education.  We all know middle class parents who never bought an apartment or a house, but were willing to spend money out of their provident fund for their childrens’ education.

A related issue is the way many state governments “fix” the fees that private institutions can charge for education. This automatically limits what the institution can do to set high standards. In some states the problem has been “solved”, with the robber barons of education getting control over the state’s decision-making machinery one way or another!  Politicians have also “solved” this problem in another way - anyone can spend a million rupees per year or even more abroad to get the education he/she wants.  The same politicians will not allow any foreign university to function here with any degree of freedom.

What is the solution? I believe that very liberal tax concessions should be given to large public limited companies and to individuals to set up big endowments to set up and support not-for-profit educational institutions without controlling them. Secondly, credible third party evaluation of the quality of education in different institutions should be made available to students. In many countries, student evaluation through credible websites provides such information. Many employers have their own prioritized lists of institutions they go to for campus recruitment. It will be a public service if they publish these lists.

Lastly, educational loans are very important in any modern economy. It is not surprising that the US President Obama keeps referring to educational loans. India has played around with the idea, but has not used it to achieve any big impact so far. See my article on this topic:
http://obvioustruths.blogspot.in/2013/07/bank-loans-for-students-non-starter.html

I understand that banks in India would love to lend money to students, but the problem is one of risk in collecting the money back. Even a small percentage of defaults makes the loans expensive. Here is where the Government can step in – offering the banks a guarantee on repayment of the loan, in return for a legal commitment on the part of the student to repay the Government if he fails to pay the bank. I would propose that the Income Tax Department should collect a certain percent of the taxable income of the borrower along with the tax to recover the defaulted loan with interest over a period of time. Given a Government guarantee on loan repayment, bank loans to students should be far more affordable.

Srinivasan Ramani