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News: Government has issued an advisory to citizens that caution should be exercised while using the services of companies that offer online and remote learning courses.
These companies have been accused of delaying refunds, suppressing information about auto-debit facilities and luring subscribers to sign up for tuitions without explaining the financial implications.
What is the need for such an advisory?
Sector has seen very high growth, specially with the closure of schools during the pandemic.
The K-12 (kindergarten to class 12) segment operates largely unregulated and has seen the most unfettered growth.
China has put a lot of restrictions on the Edtech companies, one of which is that they can’t raise foreign capital. This has redirected investor interest towards India. Example: Sector attracted $4 billion in funding since 2020 compared with around $500 million in 2019. Moreover, India now boasts five edtech unicorns against just one in the pre-pandemic era.
What are the challenges in regulating Edtech sector?
Edtech has a wide presence and has been growing exponentially which makes regulating it a complex task.
The business model in Edtech sector is more conducive to delivering revenues rather than quality education, with investors typically seeking an exit in five years.
What is the way forward?
Government should plan for standards-setting and certification process for online schooling
Need for introducing long lock-in for investors.
There is need for a more extensive campaign that spreads awareness regarding this advisory to more and more people. This will save many parents in lower-income families from financial ruin.
Govt should introduce public distance learning education modules, as this will increase access to education specially for the disadvantaged.
Source: This post is based on the article “Edtech’s teachable moment” published in Business standard on 28th Dec 2021.