Like every economy in the world, the UAE is beginning to see the impacts of inflationary pressures. Many of us have seen fuel costs, the basket of goods in our shopping, rent and leisure costs already rising – and, so too, many of us, as parents, are feeling the pinch.
The one area of our lives that has so far been immune from increases in cost have been school fees – this because the vast majority of schools, which are for-profit, have their fees directly linked to the Education Cost Index (ECI) issued by the Dubai Statistics Center. Currently Dubai has around 215 for profit schools and 15 not-for-profit schools. The not-for-profit schools can choose to request fee increases at any time – their fee levels are not restricted by the ECI.
The ECI measures annual changes in the costs of running a school, including salaries, rent and utilities. This year the ECI has been set at -1.01%, meaning that school costs actually went down by around 1% in the past year. This is, in large part, because many schools, responding to Covid-19, reduced or froze teacher salaries and, in many causes, reduced their fees.
According to the KHDA’s Fee Framework, outstanding schools are eligible to increase school by up to double the ECI, very good schools are eligible to increase fees by up to 1.75 times the ECI, good schools by up to 1.5 times the ECI and remaining schools can increase schools by up to the level of the ECI. Schools always retain the choice whether to increase school fees, or not.
The ECI takes into account school operating costs which include teacher salaries, rent, maintenance, electricity and water charges and a basket of other commodities that are not published.
No one has a crystal ball, but unless global inflationary pressures wither away by March 2023, or unless the KHDA and Dubai government moderate the ECI, it is hard to see school fees remaining static for the 2023-24 academic year. The only question is by how much they will rise.
Many not-for-profit schools, because they operate without the restrictions of the ECI, have jumped early. Dubai College has increased fees by 5%. Dubai English Speak College has increased fees by 5.5%. Dubai English Speaking School has increased fees by 8.5%. These are all outstanding schools, every one of them has secured the very highest Top Schools Award for Outstanding Schooling in their class – they set the bar for what a Tier 1 outstanding education can deliver for students. They are also highly responsible schools – they would not have imposed school fee increases unless they deemed it unavoidable to maintain standards. We expect other not-for-profits to follow suit, but this is not certain. Some may choose, voluntarily, to defer the pain for parents until 2023-24 and mirror those allowed under the ECI.
Are schools, all schools, not-for-profit or for-profit, justified in needing to increase fees? In almost all cases, regretfully, yes. The impact of frozen fees has been serious:
- Teachers have seen their salaries frozen, or in some cases reduced. They are struggling – and particularly now that inflationary pressures are creeping into the economy.
- School buildings and facilities need maintenance. If school fees do not rise, something has to give. Many schools have chosen to forego capital costs to try and protect teachers.
- Schools need to invest in new facilities and infrastructure. Many schools had no choice, for example, but to invest heavily in new digital and on-line technologies to meet the impacts of lockdown and need for on-line learning. But schools also have capital plans, that see them investing in new sports and performing arts facilities for example, these designed to improve the education of their students. Many plan to offer new qualifications and subject pathways to better meet the needs of their students. When these are cancelled or frozen, it is students that suffer.
- Even in weaker schools, higher fees means more resources to put things right.
It is hard to see how school fees, in either the for-profit, or not-for-profit sectors can remain frozen for a fourth year without something having to give.
The take-away from this is that parents in for-profit schools, at a time when inflation is beginning to take its toll and the outlook looks worrying, should count themselves lucky that they have a year to prepare for the fee increases that are almost certainly coming. Those in many not-for-profits will not have that luxury. It is time to prepare.
So what can parents do? Ultimately the end game here, without massive and unlikely government intervention, is that employers are going to need to raise salaries if they are going to avoid a brain drain away from the UAE or cause employees significant hardship. The issue is whether these will match the projected increases in fees. Governments, as a rule, do not want to see bumper pay increases – it can lead to spiralling inflation. There is a balance to be struck. But private sector employers may have no choice. It is time for employees to prepare for salary reviews and pay negotiation, armed with the latest and projected cost of living figures. It may well also be time to start budgeting.
What sort of level of fee increases can we expect? Again, no one has a crystal ball. In the UK, for example, inflation is currently at 9%, and the expectation is that it will break into double figures to around 13%. Many argue that the inflation level, for the average citizen in the UK, is already in real terms 20% plus. Many believe that the UAE will not see that sort of level of price inflation, but 5% is certainly not implausible. That would mean, in outstanding schools, fee increases of 10% if directly mapped onto the ECI. In many ways this will depend on whether schools choose to increase the wages of their teachers early before the ECI is measured – and teachers, with the cost of living rising, have strong cases for schools to do this.
The UAE government has done all it can to control inflation – and our natural resources have given it significantly more fire power than many economies – but the UAE is part of a global economy, and the ability of any government to control inflation is limited. The war in Ukraine, and its impact on food and energy prices and availability, is of particular concern.
The mission statement of SchoolsCompared.com is to help parents choose the right school for their children. Our wider editorial views and lobbying are driven by the interests of parents, above all else. Often this means we will come into conflict with schools. In this case, however, the two are, broadly, aligned. Schools need fee increases to protect the quality of education they can provide for children. In that sense, parents need schools to increase fees too. However, the issue is timing and the individual circumstances of parents. Parents need time to negotiate with employers. That time has started now.
But we think schools can now do more to better respond to the needs of families. There is no doubt, over Covid-19, all schools responded powerfully, to varying degrees, and within the limits of what they could afford, to help families. Dubai College and DESSC, the two school groups that have already increased fees, both helped parents significantly. But as school fees now begin rising we need all schools to do more to assist those families who, through no fault of their own, face intransigent employers or circumstances including redundancy and changes to family circumstances.
Currently, many schools we know now, and historically, have helped families, whether by reducing or deferring fees. At least one school we know has set up a UK charity to begin working with its alumni to raise funds for scholarships – which could potentially lead to bursaries so that they can openly step in when parents face precisely these sorts of circumstances. Currently these sorts of agreements are not transparent. No school we are aware of has published an open bursary framework guiding parents on the process of applying for fee reductions if they face difficulties.
Many parents, as a result, battle on, unaware that the vast majority of schools will help when parents run into unplanned-for, serious financial difficulties. In some cases parents are means tested, in other cases, an informal conversation takes place. Often fee reductions can be significant, offering parents respite over the short term whilst they resolve the issues facing them. Where there are long term issues, you would be surprised how kind schools can be – ultimately, schools are run by educationalists who place the interest of children first.
The issue is that, whilst these remain informal and bursary arrangements unpublished, struggling parents face only worry and a lack of certainty. Schools argue with us privately that they do not wish to advertise bursaries because they would be deluged with applications. But would they? How many parents want to face the humbling experience of requesting a reduction in fees, or revealing their personal and private financial circumstances. We believe very few – only those who are seriously struggling.
Many wealthy parents are very keen on school fee increases. They want increased investment, expanded qualification choices and subject breadth, new facilities – and they also want to see teachers and school leadership rewarded. So too, in theory, do parents who simply cannot afford increases in fees. We think introducing transparent bursaries for parents facing exceptional changes in financial circumstances would significantly bring schools and parents of all means together. We would also like to see an increase in scholarships provision and more work by our outstanding schools with the other schools and the broader community to share resources and drive up standards. Finally, we need employers, many of which have children at UAE schools, to recognise that they have a vital role in increasing salaries. We are all linked.
The issue here is timing.
Schools, if at all possible, should begin to increase the fees of teachers, not waiting for fee increases. The same holds true of investment. This will force a rise in the ECI and fees will rise.
Employers need to increase salaries sooner rather than later. We can see the increasing costs of living around us all.
As schools announce fee increases, there should be transparent, published bursary programmes to protect financially vulnerable families and their parents, means tested if necessary to avoid a projected deluge of applications that we think unlikely. Redundancy, a change in family circumstances and health issues can happen to any of us, including the most wealthy. Schools are in a privileged position of extraordinary responsibility – and children must come first.
We also need schools to start speaking with parents now about the need for fee increases. We would like to see formal, serious and genuine consultations with parents before fee increases are introduced. The most outstanding schools speak about always engaging with parents – this is a key area that should be included within that ambition.
In Dubai they say if you build it, they will come.
It is time to start building.
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If you are a family facing hardship and want to comment on increases in school fees please email me at [email protected] We always protect our sources if you wish to remain anonymous.
If your school has, or is, introducing a bursary framework, please email me at [email protected]
For more information on school fee increases at DESSC, see here.
For more on School fee increases at Dubai College, see here.
For our Guide to school fee increases and the differences between not-for-profit and for-profit schools, see here.
On more about the decision of one of our most loved not-for-profits to become for-profit, see here.