In today’s Finshots, we tell you why the Ministry of Education has finally issued guidelines to curb the practices of coaching centres.
Before we begin, if you're someone who loves to keep tabs on what's happening in the world of business and finance, then hit subscribe if you haven't already. We strip stories off the jargon and deliver crisp financial insights straight to your inbox. Just one mail every morning. Promise!
If you’re already a subscriber or you’re reading this on the app, you can just go ahead and read the story.
The Story
In 2023, 26 students committed suicide in the coaching capital of India — Kota. That’s one death every two weeks.
And maybe this record-high suicide rate was the final straw. Because the government has decided to do something about it. Last week, the Ministry of Education laid down a whole host of new guidelines to bring coaching centres under its thumb.
But before we tell you what these guidelines entail, we first need to address how we ended up in this mess, no?
Well, it all probably began in the 1980s with Bansal Classes (and no, we’re not blaming them in any way). A former engineer left his job at a nylon-making company after a health issue struck him. And he decided to put his engineering skills to use and help students prepare for exams. He began taking private classes in his dining room. Soon, his students began to clear the competitive exams and head to greener pastures. His fame spread far and wide. And by 2012, Bansal Classes had become an 8-storied behemoth that raked in over ₹100 crores yearly.
But this success was attracting others who wanted a piece of this extremely lucrative pie too. Maybe people realized that spending on education was quite inelastic in the country. That parents would choose to not spend on healthcare if their incomes were hurt. But education wasn’t to be disrupted.
And we’re not making this up. It’s something that India’s Economic Survey highlighted.
Maybe it’s because parents believed that getting a coveted engineering or medical degree would be the start of a better life for their children. They were willing to shell the big bucks. But the problem here was that the competition was insane. Heck, in 2022, for the NEET exam, which is the gateway to medical school, 18 lakh students vied for a puny 92,000 seats.
So coaching centres doubled down on their sales pitch. They decided to expand their cohorts. High schoolers weren’t enough. You needed to catch ’em young. So ‘Foundation Courses’ began. Students as young as 12 would enrol. That’s around the 6th grade. The parents didn’t complain because if starting early meant getting an edge over their other aspirants, so be it.
Okay, but what about regular school you ask?
Well, in many cases, the coaching centres had a secret handshake with schools. They’d teach them everything there was to know. And the school would let them sit for public exams — the 10th and 12th grades.
Coaching centres became quasi-schools. And the industry boomed — It turned into a ₹60,000 crore juggernaut.
But the pressure that came with these models was insane.
As The Ken points out, the coaching institute Allen has this weird system for its hostels. If you do well and rank better than your peers, you get to stay. Otherwise, you get booted out.
Just think about how would that affect the psyche of students?
But many centres didn’t care about any of this. They were there to rake in money. It was big business. So random centres began mushrooming across all parts of the country. And many of them paid no heed to safety norms. A few years ago, a coaching centre in Surat burnt down and killed 20 students — the structure had an illegal construction on the terrace, wooden staircases, no fire extinguishers, nothing.
Students were just a money-making machine.
So yeah, you can see why the government finally felt the need to intervene. And here’s a sampler of the guidelines.
For starters, coaching centres need to pay attention to the mental health of their students. They can’t just wash their hands off saying that it’s the parents who must first figure out if the child can handle the pressure or not. They want them to conduct workshops.
Then it says that coaching institutes can’t enroll students below the age of 16. Basically, students need to have cleared their 10th-grade exams before joining these centres.
And if they’re seen to be promising results, then that’s a red flag. The centres indulging in such dubious guarantees will be fined.
Also, centres must ensure that there’s a minimum of one square meter area for each student in a class. And that all fire and building safety norms are in place.
Sounds good, doesn’t it? Hopefully, this could help improve conditions and the lives of students. Even if it’s just by a tiny bit.
But coaching centres are already worried about some of these rules.
They’re saying stuff like, “Oh, the exams are hard. We can’t coach them adequately in a year or two. Students need a longer rope to adjust to the pressures of the competition.”
And you might be forgiven for thinking that they’ve got the best interests of the students at heart.
But it’s mostly just business. Students below the age of 16 make up around 20–40% of the population at many of these coaching centres. If these rules are enforced, that’s a large chunk of money that'll fly out of the window.
And you can bet they’ll fight tooth and nail to protect themselves.
So yeah, we don’t know if these guidelines will end up like previous attempts at regulation. In 2012, the then minister of state for education called the coaching industry a monster and proposed a law to rein them in but nothing really materialised. In 2015, when cases of suicide ballooned in Kota, the Rajasthan government stepped in to formulate the rules. But it took 8 years for some form of regulation to shape up. And in Bihar, where coaching centres need to be registered since 2010, it still doesn’t seem to be happening.
So will this time be any different?
For the sake of the students, let’s hope so.
Until then…
PS: Watch the Netflix show called Kota Factory. It tries to lay bare all the problems of coaching centres. And the makers even decided to make it a black-and-white series. Just to drive home the point that the lives of students who end up in these coaching centres are devoid of colour and joy.
Don't forget to share this story on WhatsApp, LinkedIn, and X (formerly Twitter)
📢Finshots is now on WhatsApp Channels. Click here to follow us and get your daily financial fix in just 3 minutes.
Why Millennials Should Buy Term Life Insurance
Nearly 83% of Indian millennials don't have term life insurance!!!
The reason?
Well, some think it's too expensive. Others haven't even heard of it. And the rest fear spam calls and the misselling of insurance products.
But a term policy is crucial for nearly every Indian household. When you buy a term insurance product, you pay a small fee every year to protect your downside.
And in the event of your passing, the insurance company pays out a large sum of money to your family or your loved ones. In fact, if you're young, you can get a policy with 1 Cr+ cover at a nominal premium of just 10k a year.
But who can you trust with buying a term plan?
Well, the gentleman who left the above review- spoke to our team at Ditto.
With Ditto, you get access to:
- Spam-free advice guarantee
- 100% free consultation from the industry's top insurance experts
- 24/7 assistance when filing a claim from our support team
You too can talk to Ditto's advisors now, by clicking the link here
