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Dubai puts cap on school fee hike

Annual hike to be not more than 5-7% depending on performance: DEC

Schools in Dubai will not be allowed more than an annual 5-7 per cent hike in fees based on performance rates awarded by the Knowledge and Human Development Authority (KHDA) and even when the education cost index (ECI) records high costs.

The Dubai Executive Council (DEC) announced its decision on Sunday to place the school fee cap depending on the schools’ performance. An official said that the annual school fee hike must not cross the rating awarded by the KHDA based on the school’s performance evaluation index.

Parents, according to the annual school fee rise cap, would only have to bear a maximum of 5-7 per cent hike annually during the over-inflation times while investors would have to bear much more than that percentage.

Schools rated ‘outstanding’ shall be given a seven per cent increase, school rated ‘good’ will be given six per cent, schools rated ‘acceptable’ and ‘poor’ shall be given five per cent. These projections released by the DEC add that if the cost of education index is negative or zero, then no increase will be allowed.

The education costs index is measured by gauging the operational charges paid by a school. The resolution explained that a framework would be developed to give the schools the right to apply for restructuring their fees if the inflation rates negatively impacts the profitability and development of their services.

The education costs index for the year 2013 saw an increase by 1.74 per cent as compared to 2012, based on the reports released by the Dubai Statistical Centre (DSC) and the KHDA.

According to Abdulla Al Shaibani, Secretary-General of DEC, the decision is aimed at keeping the vision of good education at an acceptable fee to students and guardians. “The function of the council is to adopt policies that will contribute to meeting the needs of Emiratis and residents in Dubai and increase the competitiveness of the emirate socially and economically,” he said.

This decision, he said would encourage schools rated ‘outstanding’ and ‘good’ to carry on by giving them better profit rates than schools rated ‘acceptable’ and ‘poor’. The cap would also help regulate the general inflation rate in the emirate by restraining the inflation on education within acceptable levels.

According to the KHDA’s current fee framework, outstanding schools will be eligible for up to a 3.48 per cent raise, good schools are eligible for up to 2.61 per cent and the rest will be granted up to a 1.74 per cent rise. In a statement issued to the Press, the authority said that every school in Dubai has been directly informed of the changes by the KHDA.

Some of the school authorities that Khaleej Times tried to get in touch with for a response on the decision said that they are still trying to fully understand the ruling and a detailed circular will be issues to parents and stakeholders.

Staff salaries accounted for 60 per cent out of the operational charges at private schools, followed by rent, maintenance fee, and electricity and water bill, along with other factors that have been included in the calculation of the education costs index.

dhanusha@khaleejtimes.com