Gov’t imposes tight cap on fee rises for high-end int’l, private schools: Private and international schools that charge tuition fees of EGP 35k and above will not be allowed to hike fees by more than 6% for this academic year, down from the previous 7% cap, according to a statement sent to journalists by the Education Ministry.

A tiered system: Schools with fees of less than EGP 35k are permitted to hike fees by a larger percentage. Fee hikes are capped at:

  • Up to 7% for schools charging EGP 25 - 35k ;
  • Up to 10% for schools charging EGP 20 - 25k ;
  • Up to 12% for schools charging EGP 15 - 20k ;
  • Up to 15% for schools charging EGP 10 - 15k ;
  • Up to 20% for schools charging EGP 5 - 10k ;
  • Up to 25% for schools charging less than EGP 5k.

Industry reax: One school chief summed it up yesterday: “What planet are they living on? … Haven’t they noticed the inflation rate?”

In context: The hikes are well below the current rate of inflation, which hit an all-time high of 36.5% y-o-y in July — and which a Reuters poll of economists suggests was even higher in August.

Parents have been waiting for the bill: Many schools delayed announcing their fees for thecoming year well into the summer, as they waited to see if there would be further movement in the USD-EGP exchange rate. Several schools were also in talks with the Education Ministry to approve their fees, sources in the sector recently told Enterprise.

REMEMBER- Schools regulated by the Education Ministry (a group that excludes many schools owned by parent associations, such as BISC and MBIS, and other external bodies, such as Cairo American College) are required to get ministry approval each year on their tuition fees before announcing them to parents.

A potted history of fee caps: The Education Ministry introduced the earlier 7% fee cap in 2017 and began imposing it in the 2019-2020 academic year for all schools under its jurisdiction, after parents lobbied to end what they called unjust increases. Private schools under the ministry’s jurisdiction have been lobbying the ministry for the past few years to revise the cap in light of rising inflation and, more recently, the EGP devaluation. They reached a compromise last year to adjust the baseline from which fee hikes are calculated and allow many schools to apply for exemptions.

The problem for schools: They, like other businesses, are being eaten alive by inflation — and many of them have USD-denominated costs ranging from teacher salaries to materials and many of their online tools.

Some struggling schools are getting a pass: “Schools that can provide proof of incurring losses can apply to the Education Ministry for exemptions from the current caps and in some cases the requests came back with approvals for increases of between 15-60%,” Karim Mostafa, CEO of education management company Eduhive, told us yesterday.

Schools with lower fees have more room to maneuver: The move to allow higher increases for schools that charge tuition of less than EGP 25k came after several school owners voiced concerns to the ministry that the former 7% cap could force them to shut down in the face of rising costs, Private Schools Owners Association Chairman Badawy Allam told us.

While others find ways around fee caps: Some schools levy additional fees that don’t fall under the technical umbrella of tuition — giving them more leeway for increases — while others are reportedly using loopholes in how they report their tuition fees to the government as they look to create a buffer against soaring costs.

This won’t be popular among many school administrators: Sources we spoke to in the sector yesterday are concerned that the cap will hinder their ability to face financial challenges that lie ahead. We’ll take an in-depth look at what the decision means for private schools in next week’s Blackboard, our weekly vertical covering the education sector.

Gov’t school fees will stay more or less flat: Government schools will see an increase of EGP 7 in annual fees across the board, per a ministry decree. Following the adjustment, fees for government schools vary from EGP 213 to EGP 528, depending on the type of school and grade. Children of teachers are entitled to a 50% fee reduction, while some others are exempt from fees, including children with special needs and whose families receive social support from the government.

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