Punjab caps private school fee hikes at 5%, mandates refunds for past excesses

The Punjab government has introduced a new Ordinance to regulate fee increases in private schools, capping annual hikes at 5% and requiring refunds for excessive charges collected over the past three years. The Ordinance amends the Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, and came into immediate effect upon promulgation by the Governor.

The move follows reports of a 17-year-old student's alleged suicide due to pressure over pending fees, and complaints from parents about arbitrary fee hikes. Chief Minister Bhagwant Mann stated that the Ordinance addresses these concerns. Punjab has approximately 32 lakh students in 7,800 private schools.

Under the new rules, private schools cannot increase total fees by more than 5% over the previous academic year without prior approval. Any increase exceeding 5% must be submitted to the District Regulatory Body, headed by Deputy Commissioners, at least six months before the academic session. The school must justify the hike, and the body can order a forensic audit of the school's finances, including those of its managing trust or society, to prevent profiteering. Until a decision is made, the current fee structure remains.

The Ordinance significantly expands the definition of 'fees' to include development charges, annual charges, activity fees, smart class or technology charges, laboratory and library fees, examination charges, transport charges (unless separately contracted), and any other compulsory payments collected directly or indirectly by the school. Only genuine refundable security deposits are excluded.

In a crucial provision, schools must refund any fee increases exceeding 15% over the last three years. This retroactive measure aims to address past grievances. The government has announced stringent penalties for violations, including derecognition of the institution.

A dedicated portal will be operational immediately. All private schools must upload details of fees charged over the past four years within 10 days. The government will scrutinize this data over the following month. The Ordinance was necessary because the government concluded that proposed amendments to existing rules would not withstand judicial scrutiny unless incorporated into the parent legislation. As an Ordinance, it has the same force as an Act until approved by the State Legislative Assembly, and remains valid for six weeks from the start of the next session.