Financial Sustainability of Non-State Schools during the 2020 Global Pandemic: “Raising Chickens”

Many schools around the world are still closed.  As they slowly reopen, being prepared for future events that might interrupt education is key to current and future plans. An NGO I work with recently completed a study entitled: Education Interrupted:  Edify’s Roadmap to Continuing Learning during the 2020 Pandemic. The report describes the results of interviews with 388 school leaders in eleven nations in the Global South during one week in May when all schools were closed due to COVID-19.  School leaders expressed three major concerns: 1) the health and safety of students and staff; 2) the school’s financial sustainability; and, 3) learning loss.  Using the results of the study, the NGO developed a plan to support schools in these three areas.

This is the second blog of a three-part series. In an earlier blog Maxie Gluckman and I described school leaders’ concerns regarding the health and safety of students and staff as they slowly begin to reopen their schools. The third blog in the series will examine the many roles technology must play to support student learning. Here I discuss the second of their three major concerns– financial sustainability.

Paying School Fees

Since the schools we surveyed are low-fee independent schools, or nonstate schools, a key concern expressed by school leaders was parents’ having difficulty in paying school fees. As a result of not receiving fees, school proprietors face the challenge of continuing to pay staff salaries, purchasing needed materials, paying rent, and repaying outstanding loans.

Recovering School Fees: “How will we be able to pay teachers?” 

Currently, most schools are concerned that they will not be able to “recover fees” that were already owed before the schools closed, as well as fees owed during the months of closure. Many schools do not currently have the funds to pay teachers, and they fear that many parents who are “informal workers” will not be able to pay for the remainder of the previous term, never mind for the upcoming term. As one leader noted, “some parents have shared that they would rather keep their children receiving remote instruction in exchange for lower tuition cost.”

Numerous times school leaders talked about the importance of their schools being financially sustainable. One proprietor commented, “Our school has been struggling under normal conditions before this crisis, and it may not continue because we do not have basic materials and funding.” The following comment is typical of many others: “We need financial sustainability. Currently, schools are closed. No classes. No fees. No income. If this situation continues any longer, many of the schools, including us, will not be able to survive.”

Prof. Paula Cordeiro University of San Diego, Dr. Alfred Ampah-Mensah, Cape Coast University & Adwoa Nyantakyiwaa, Edify, Participating in the Annual Edify Leadership Institute

Declining Enrollments: “We need to get all students to come back.”

The majority of school leaders are greatly concerned that they will have a considerable decline in enrollment once schools re-open as families might go to “to a public school or a less expensive private one.” While some schools have been offering discounts (upwards of 30%), this has had variable success. Some school leaders reported that parents could not afford the school fee even with a 40% discount. Others expressed that “parents expect discounts on school fees in order to continue for the next school year,” but lamented that in many cases, “this would make it impossible for the school to continue growing.”

One proprietor commented, “Some parents prefer to lose the school year rather than having to pay for a non-face-to-face service. If social distancing continues, the school will probably face a great loss of students.” A few schools reported already having been informed that students were leaving, “We have five students who have left the school.” Another school leader commented, “Parents will likely run out of savings for the next school year and will have no choice but to send their children to a government-run school. Some parents have already done so.”

Paying Teachers: “…raising chickens…”

School leaders worry that their enrollments will drop; thus, their revenue will decrease, and this, in turn, will result in an inability to pay teachers. In many cases, teachers have only partially been paid while schools are closed or not paid at all; thus, they are owed back wages. This comment is common of the sentiment expressed by a large number of school leaders “…I have not paid my teachers’ salaries since March 2020.” One commented, “I am also concerned about how I will pay my teachers when I am only getting 50% fees since February 2020.” Another stated, “I have paid teachers’ salaries until March 2020, but not in April and May 2020. I will have to pay them when we re-open.”

Proprietors expressed concerns for these salary arrears noting, “My real concern is teacher payment. They need their money because they all are working, but parents are not paying the requested money.” Another noted, “Since we have not received any school fees since March, I have no income and funding for teachers’ salaries. Also, I have outstanding loans I need to pay. Hence, since lockdown, my husband and I started raising chickens—about 400, which are now about 1kg in weight. When I am able to sell them, I should be able to pay my staff at least part of their salary.”

From a ‘Gallery Walk’ during a 2019 training for school leaders, Kigali Rwanda: the dispositions of a quality teacher

Losing Teachers: “We may lose most of our good teachers.”

Proprietors noted that salary arrears might lead to losing teachers as it is “difficult on their side to go without pay for a long period. We may lose most of our good teachers either to other schools or sectors, which may be a challenge when schools re-open.” Another school leader commented, “With a population of 30 teachers, we could not afford to pay all their salaries as normal. We think this may affect the teachers’ morale when we plan to re-open in September. Also, the majority of our staff comes from foreign countries, and they went home before lockdown; therefore, it may be hard for them to return with the border closures for foreigners and a quarantine of 14 days for returning residents.”

Loans: “How can I free myself from the bank?”

Many school leaders expressed deep concern about not being able to repay their current loans. Some commented that their “payment is far overdue,” questioning how they might “raise funds to pay the loan” or “settle with the bank.” This concern has also carried over into personal finances as one school leader commented, “My personal debt or liability is rising as I have borrowed for my teachers’ March salary. If the school does not re-open soon and we do not get school fees from students, how will I pay off my personal loans?”

Some contemplated applying for new loans in order to pay teachers, but applying for these loans is a challenge. One school leader commented, “Our application for a loan to pay our teachers at our partner bank was turned down. We are worried about how our teachers will stay motivated when we cannot pay them until school re-opens in September.” A few reported that their government has said loans are available to private schools, “The government has promised a relief package to private schools in the form of a loan. It has not yet happened.” A few school leaders report that they “…have been able to continue paying teachers thanks to a state loan” they applied for. However, according to the economic projections they developed, it will not be enough to start a new school year. In a few cases, school leaders report looking for new ways to generate income. One leader in India commented that through “a private school association, we have submitted an MOU to the Education Minister for 50% budgetary support for teachers’ salary, and we will see what happens.”

Other Financial Challenges: “We will likely lose the premises.”

Other financial challenges have also emerged with the pandemic. As one school leader noted, “we have verbally agreed with owners of our school premises to halt the rent fee, [but] we are not sure whether they will keep that and wait for September. And if that is not the case, we are likely to lose the premises.” Several proprietors also lamented the state of the physical plant, commenting that extending the time to school re-opening “will see our structures needing more repairs, yet we have no income as of now.” Those that were under construction when the pandemic broke out may not have been able to continue, as one leader noted the construction of two new classrooms “had taken all the income yet parents had not completed school fee payment. Since the first term is to be repeated, we shall have no chance to demand these debts, hence it will result in a loss for the school, which may lead to a few services being provided once the school re-opens.”

Next Steps…

As school closures continue the fact that so many non-state schools could not fully pay their teachers has been weighing on the minds of these school leaders for months.  Some governments and NGOs have provided low-interest loans while in other nations loans continue to be unavailable. We don’t yet know how many schools will never reopen or how many teachers and students will leave schools, but we do know that in the long-term finding alternative revenue sources to augment tuition revenue is crucial. A few schools have social enterprises (e.g., a bakery in which culinary students sell baked goods; a school garden selling vegetables and fruit, charging community members to use the computer lab) that help in diversifying revenue sources. We also know that schools need to be innovative in the tuition models figuring out their value proposition is vital to their survival.  For the NGO reported here, they are offering trainings and resources to stimulate innovation.  We hope other NGOs, corporations and government agencies do the same.

Meet Paula Cordeiro: Paula A. Cordeiro

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