How does the private education sector envision the road ahead? Faced with high operational costs and strained by the float of the EGP, private and international schools are awaiting the Education Ministry’s decision on how much they can hike tuition fees for the 2024-2025 academic year. While some players seek an extension of last year's tiered system of caps on annual hikes of tuition fees, others are advocating for steeper hikes. We spoke with a number of education sector veterans to find out what their demands are, what other challenges they are facing, and how the government can help out.

Remember: The Education Ministry in September 2023 introduced a tiered system of caps ontuition fee increases at private schools, with higher-priced schools facing tighter limits. Schools charging EGP 35k and above were limited to a 6% increase for the current academic year, while schools that charged smaller fees were allowed to increase fees at a greater level all the way to 25% for schools charging less than EGP 25k. For high-end int’l schools, fee increases for schools charging EGP 200k or more were capped at 5%, while schools charging less could increase fees by up to 10% depending on how much they charged.

The caveat: Schools that fall outside of the ministry’s purview — among them institutions owned by associations and other bodies, such as CAC, MBIS, and BISC — were not impacted by the caps.

Some schools are calling for the caps to be eased: While some private school owners believe that reinstating last year’s maximum allowable increase would be sufficient, others have taken a more hawkish stance. British International College of Cairo CEO Ahmed Samir believes that an increase of no less than 40% is needed — even if that means implementing a one-off hike limited to the upcoming academic year to mitigate current financial headwinds.

Where the requests stand: The Education Ministry is currently deliberating on tuition fees for the next academic year and is expected to issue a decision following the Thanaweya Amma exams — which run until 20 July — a government source told Enterprise. The ministry maintains an open dialogue with private school owners, both to consider their requests and to ensure decisions ultimately safeguard parents from excessive fee hikes, the source added.

The likely outcome? The source expects the government to reinstate the tiered system of tuition fee hike caps for the next academic year.

Schools are stuck between a rock and a hard place: Many private schools are now either being offered for sale or face the threat of shutting down amid soaring inflation and a weakening EGP, which have seen the cost of wages, materials, and maintenance rise significantly, Private School Owners Association Deputy Chairman Badawy Allam told Enterprise. These financial strains are compounded by schools’ inability to hike tuition fees as they await the ministry’s decision.

A precarious situation: A key concern is schools ramping up the costs of extracurricular activities, uniforms, or other expenses to bypass fee regulations, said Magda Nasr, a former member of the House of Representatives’ Education Committee. The road ahead demands a measured approach that strikes a balance between the quality of education and parents’ financial limitations, she explained, adding that an open dialogue between the ministry, schools, and parents is needed.

PULSE CHECK ON THE PRIVATE ED SECTOR-

Private schools make up a small slice of the pie: Private schools constitute 15-20% of the schools in the country, Allam said, adding that this participation rate is unsatisfactory considering Egypt’s high population density. By contrast, in neighboring countries like Jordan, private schools make up 70% of schools.

There is a large gap between supply and demand at the K-12 level, Nasr said, explaining that the country needs more private schools to accommodate the educational needs of its growing population without compromising quality.

Incentives are needed: To encourage private investment in the education sector, the government can offer pre-equipped land for schools across governorates with flexible payment options, Allam suggested. Launching a comprehensive incentive program would reignite interest in the sector, he said, pointing to a decline in new school memberships within the association in the past two years.

HEADWINDS-

Building requirements are stringent: Building requirements issued by the General Authorityfor Educational Buildings hinder the growth of private schools, Allam said. One such requirement is minimum land area, which stands at 1.25k sqm for private Arabic schools and 2.5k sqm for language schools. Additionally, classrooms must be at least 40 sqm and well-ventilated. Because the land available within residential areas is both limited and expensive, these restrictions force private players to build schools in distant locations or even desert areas. In Cairo, new schools are often built in the new administrative capital or in the city’s north, where land is costly. Lowering the minimum area requirement could lead to a significant increase in the numbers of schools in urban areas, he suggested.

Land scarcity isn't just a private sector problem, a high-ranking government official told Enterprise. The second phase of the public-private partnership (PPP) education program is facing delays due to land shortages across governorates, the source said.

Remember: The state will offer 24 land plots for private sector players to set up 24 schools within the coming weeks under the PPP education program, which was introduced back in 2016 to boost private sector involvement in the education sector. Under the framework, the government will provide private sector operators with land and licenses, while the operators will build and operate the schools.

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