Cap on private school fees hike, refund for ‘extra’ fees: What’s in Punjab’s new ordinance?

It further mandates refunds in cases where fee increases have exceeded 15% over the last three years, and treats all charges (such as transport and building fees) as part of tuition fees. Stringent penalties, including derecognition, have been announced for violations.

Mann stated that a dedicated portal would become operational immediately and all private schools would be required to upload details of fees charged during the past four years within 10 days. The information would then be scrutinised over the following month.

The government had initially considered amending the rules framed under the 2016 Act. However, after examining the potential legal objections, it concluded that several proposed changes would not survive judicial scrutiny, unless incorporated into the parent legislation itself.

An Ordinance is introduced when the state legislature is not in session. It carries the same force as an Act until it is approved by the State Legislative Assembly and remains valid for six weeks from the date the next session starts.

What exactly is considered as fees under the amended law?

The Ordinance considerably expands the definition of fees so that schools cannot avoid regulation by collecting money under different names or categories. Instead of limiting itself to tuition fees, the law now covers almost every compulsory payment.

This includes development charges, annual charges, activity fees, smart class or technology charges, laboratory and library fees, examination charges, transport charges where transport is not separately contracted, and any other compulsory amount collected directly by the school or indirectly through an associated trust or society.

Only genuine refundable security deposits that are actually returned to parents have been kept outside this definition.

What is the new cap on fee hikes?

The Ordinance allows private schools to increase their total fee by up to 5% over the fee charged in the previous academic year without prior approval. The government says this recognises the need for a reasonable annual increase to meet rising operational costs, while preventing arbitrary or excessive hikes.

However, any school seeking to raise fees by more than 5% can no longer do so on its own. It will have to approach the District Regulatory Body headed by Deputy Commissioners at least six months before the start of the academic session, justify the proposed increase and secure written approval before implementing it.

While considering such a request, the body can order a forensic audit of the school’s accounts. It can even examine the finances of the trust or society running the institution to determine whether the proposed increase is based on genuine financial needs or if it amounts to profiteering. Until the authority takes a decision, the school must continue charging the existing fee.

Why are schools being asked to refund fees collected over the last three years?

The most significant provision of the Ordinance is the retrospective correction of fee hikes. The government has introduced the concept of “cumulative fee enhancement”, under which it will compare the fee charged during the last three years.

If the overall increase from the beginning of that period to date exceeds 15%, the school will have to refund the excess amount collected from parents within 90 days of the notification of the Ordinance. This provision is expected to affect schools that substantially increased fees in the years following the pandemic.

The government maintains that parents should not continue to bear the burden of what it considers excessive increases merely because they were imposed over several years instead of all at once.

How will the government ensure that schools follow the law?

The Ordinance significantly strengthens the powers of the District Regulatory Bodies, which will now function as the principal enforcement authorities. Apart from examining applications for fee hikes, they will be able to order forensic audits either in response to parent complaints or on their own if they suspect violations.

Schools found to have violated the law can face substantially higher penalties than before. Those failing to refund excess fees despite directions can be fined every day until compliance and, in cases of continued defiance, may even face withdrawal of recognition or affiliation after being given an opportunity to present their case.

The law also seeks to improve transparency by requiring schools to publish their fee structure on their websites and school premises at least 90 days before the beginning of the academic session and communicate any revision to parents through recognised modes such as circulars, email, WhatsApp messages or parent-teacher meetings.