School Fee increases BLOCKED by KHDA Regulator in Major Push to Support Struggling Families. Prices Fall and Inflation Risks being “Baked-in” as Pandemic Impacts Continue to take their Toll.
Dubai’s school regulator has announced that school fee rises will not be permitted for the next academic year. The decision will be a relief to families, many of which are struggling with the impacts of Covid. The block on fee increases, however, will be a serious blow to schools struggling with a population decline during the pandemic that has seen many struggle with fixed overheads. Many schools were relying on being able to raise fees to make ends meet, this even before the push from teachers for justifiable wage rises following their show of extraordinary collective commitment to children and courage during the pandemic.
The announcement follows the release of the annual Education Cost Index (ECI) highlighting the negative inflation rate for cost of goods and services that now seems baked into the UAE economy after a second year year refusal to rise.
Whilst families will benefit from the combination of negative inflation and no fee increases, schools will struggle because for most schools over 75% of their fixed costs come from teacher salaries. Many schools have had to lose teachers and the days of annual salary increases are becoming a long distant memory. We have also been notified of countless examples of school shelving capital investment plans and investment in new facilities following the impacts of Covid – even from the UAE’s most outstanding Tier 1 schools.
The decision to block school increases is not absolute. In very exceptional cases – which have to be justified through a complex and forensic application to the KHDA, the KHDA will permit increases. One reason for allowing increases is where the regulator accepts that not doing will result in damage to the education received by children or the closure of otherwise high performing schools.
The decision follows an identical point blank refusal to increase fees by ADEK, the regulator of schools in Abu Dhabi.
For parents struggling, it is worth noting that many schools are making available temporary bursaries to ensure that no child is forced to leave a school because of, for example, a temporary loss of employment by one or more parents. Understandably, however, this does generally involve parents being transparent with schools on their financial affairs, which many parents find difficult.
As a whole, the current trend, for parents who have not suffered negative impacts under Covid, is extremely positive. Many schools have places, leading to price competition to attract families. The result has been an ongoing increase in the number of parents moving schools to secure both a better education for their children and a reduction in fees. The School regulators, however, have had no choice but to block rises in school fees in order to protect UAE society from generating an even sharper divide between have and have-nots – those who have not, and have, been hurt by the Covid pandemic. For many families, financial pressures remain crippling. For others, they have never been better off, particularly those who have been able to work from home and avoid the costs of travel and office costs.
Positively, Dubai continues to operate an education system that is globally outperforming many of its peers. Many UAE schools are unambiguously world-class and the UAE continues to attract an influx of Tier 1 new schools, including the Royal Grammar School Guildford Dubai, reviewed here, which opens in Dubai this September.
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