India Employer Forum

Human Capital

Revitalizing Education Policy: Why Increasing Quantity Can Improve Quality

  • By: India Employer Forum
  • Date: 12 July 2024

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Recent developments in education policy, though well-intentioned, overlook the crucial link between quantity and quality. The government’s scrutiny of “deemed universities” has not only sparked lengthy legal battles but also empowered state education ministers to exploit institutions for financial gain. Regulatory bodies like AICTE are penalizing institutions such as Manipal for admitting 173 MBA students out of 7,830 applicants, exceeding the sanctioned 120 seats. Additionally, AICTE’s new regulation caps new engineering colleges at 540 students, mandating 60 students per discipline regardless of varying demand. This outdated approach attempts to control demand and supply, stifling competition and innovation in the education sector.

Promising Trends in Education

Despite these challenges, there are promising signs of change in education. Employers are receiving an influx of meeting requests from college administrators eager to improve student placements. Unfortunately, many of these administrators are from questionable backgrounds, viewing educational institutions merely as revenue-generating assets. Yet, this exploitative model is faltering. Over 100 engineering colleges in South India have admitted fewer than 10 students this year. Coaching businesses in Kanpur have seen a 40% decline due to the 65,000 seats offered by UP Technical University. Marketing seminars for school principals on securing admissions are not only being held but are fully booked. Many of the 1,200+ AICTE-certified MBA schools report a reluctance among students to pay full tuition fees. This has forced institutions to differentiate themselves through various initiatives like ragging-free campuses, better faculty ratios, infrastructure improvements, and more.

Shifting Strategies Among Educational Institutions

Significantly, many school and college trustees are now reassessing their revenue potential against the value of their assets. This realization is driving them to consider management contracts or leasing their facilities to professional educational groups. Others are opting to liquidate their real estate assets. An advice industry has emerged to guide trustees through the complex process of monetizing their land. Many trustees have historically masked for-profit ventures as non-profit charities and are likely to find ways to withdraw their investments. This shift is not negative; it will weed out uncommitted entrepreneurs and attract long-term investors focused on building lasting brand value and enhancing customer experience.

Public Policy Implications

The implications for public policy are evident: the new Education Regulatory Authority must embrace the trend where quantity fosters quality. This can be achieved by reducing entry barriers and dismantling the license raj that has restricted competition and turned students into captives rather than clients. Lowering these barriers should include a one-time opportunity for current management to transfer control of trusts, convert to Section 25 companies, exit the business, or consider for-profit incorporation under specific circumstances. The focus should shift from micromanaging student capacity to fostering an environment where quality and differentiation can develop over time.

Encouraging Education Entrepreneurship

In India, a child’s most crucial decision often seems to be choosing the right parents. The sustainable solution to this issue lies in encouraging a surge of educational entrepreneurship. Like all entrepreneurship, education involves testing hypotheses; you cannot confirm what works without disproving what doesn’t. Addressing the trifecta of cost, quality, and scale in education requires diverse business models and multiple attempts with varying approaches—non-profit, non-loss, low-profit, and standard-profit. Ultimately, the most expensive education is no education, and a subpar school is better than none. Therefore, education policy must prioritize quantity over quality in the short term to achieve long-term benefits.

Conclusion: The Future of Education Policy

The transformation of educational institutions, driven by a focus on quantity, has the potential to enhance the quality of education significantly. By encouraging competition, reducing regulatory barriers, and fostering a diverse range of educational models, policymakers can create an environment where quality education is accessible to all. The future of education policy lies in embracing these changes and supporting innovative approaches to education that prioritize both quantity and quality.

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