How are private, int’l schools navigating the caps on tuition hikes? The Education Ministry last week announced that it will keep the limits up to which private and international schools were permitted to raise their tuition fees in effect for the 2024-2025 academic year.

Background: The Education Ministry in September 2023 introduced a tiered system of caps on tuition fee increases at private and international schools, with higher-priced schools facing tighter limits. The tiered system expanded upon an earlier 7% fee cap following years of lobbying by schools to revise the cap in light of rising inflation and the EGP devaluation. The initial cap was introduced in 2017 and imposed for the first time in the 2019-2020 academic year after parents lobbied to end what they called unjust increases.

#1- For international schools-

• Up to 10% for schools charging EGP 30k-50k;
• Up to 8% for schools charging EGP 50k-80k;
• Up to 7% for schools charging EGP 80k-120k;
• Up to 6% for schools charging EGP 120k-200k;
• Up to 5% for schools charging over EGP 200k.

#2- For private Arabic and language schools-

• Up to 25% for schools charging less than EGP 5k;
• Up to 20% for schools charging EGP 5k-10k;
• Up to 15% for schools charging EGP 10k-15k;
• Up to 12% for schools charging EGP 15k-20k;
• Up to 10% for schools charging EGP 20k-25k;
• Up to 7% for schools charging EGP 25k-35k;
• Up to 6% for schools charging over EGP 35k.

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

The rationale: The Education Ministry is aware of how inflationary pressures are impacting private and international schools, but tuition increases that match the current inflation rate would put a lot of pressure on Egyptian families, a source from the ministry told Enterprise. While taking the decision, the ministry was sure to maintain a balance between the financial capabilities of families and schools’ need to raise fees, the source said, explaining that schools that offer additional services and activities on top of educational services are most impacted by the decision, seeing as their operational costs are much higher than the rest.

Some say the permitted increases are insufficient: Players in the education sector we spoke to agreed that the allowed increases are significantly below inflation rates and fail to meet the needs of those operating in the sector — however, they expressed their respect for the decision and its implementation.

But the government’s decision was expected, Private School Owners Association Deputy Chairman Badawy Allam tells us, with the association having called for the continuation of the tiered system with exceptions for schools whose fees fall under EGP 10k.

Parents were unhappy with the decision: There was significant backlash from parents over the decision, Allam said. Parents want the increases to stop altogether. However, Allam emphasized that schools, like other businesses, have a lot of financial responsibilities that have been impacted by inflation like utilities, salaries, and maintenance fees, and that the rising prices have affected all sectors.

International schools in particular were disappointed with the decision: The increases fell short of the hopes of international school operators, for which tuition fees comprise around 90% of revenues, British International College of Cairo CEO Ahmed Samir told Enterprise. Additionally, the profit margin from books, activities, and uniforms has dropped as inflation continues to rise, he added.

Schools will have to rethink their spending: Schools will have to cut down on their annual maintenance fees, Samir continued, adding that that decision will heavily impact schools’ bottom lines and some could even incur losses.

And then there’s the issue of salaries: School owners have requested an exemption from immediately complying with the new minimum wage for teachers and staff, Allam said, adding that they will be raising their wages gradually over a few years until they meet the minimum wage.

Schools will also resort to slashing raises: Schools have cut down on their plans to raise salaries and turned down foreign teachers’ requests for raises — a move which saw a lot of them resign, Samir said. Foreign teachers are paid the EGP equivalent of between GBP 2-3k, a sum that has become a huge burden on school operators especially following the float of the EGP.

TO KEEP INVESTORS INTERESTED-

The turbulence international schools are witnessing is scaring away investors: The government needs to engage in dialogue with investors in the education sector to determine their needs. Current circumstances have pushed away potential new investors in the sector, Samir said.

Investors need incentives — and assurance: Investors need to be sure of the sector’s profitability ahead of pouring any funds into it, those we spoke to said. Samir also mentioned a range of incentives that could reel investors in, like tax breaks, reduced utility costs, more affordable land, and a cut down on restrictions in the sector. Meanwhile, Allam proposed scrapping the obligatory 1% of annual revenue that schools now need to pay to the government’s Support Education Fund, adding that it could instead be taken from a company’s bottom line rather than its overall revenue.

Things need to change and quickly: Samir expressed concern that inflationary pressures, exchange rate instability, and lack of incentives may lead to the withdrawal of several investors from the sector.

Your top education stories for the week:

• New Egyptian curricula in international schools: Education Minister Mohamed Abdellatif issued a decision this week putting forward new regulations regarding the implementation of Egyptian curricula in international schools, including Arabic, religious studies, history, and social studies.
• E-finance has launched a number of financial services for parents and students to usher in the new school year, Al Ahram reports. The state-owned fintech player’s services for the education sector include a payment platform for school fees, the provision of widespread payment points, and a centralized system for collecting and tracking school expenses.
• The government has plans to expand the network of Japanese schools in the country to 1.7k by the end of the fiscal year 2026-2027, according to a Planning and International Cooperation Ministry statement. There are also plans to set up 62 Japanese technological and vocational schools by then.