Lack of revenue, enrollments put private universities in hot water

Highlights

• Pandemic puts private universities in financial trouble
• Income shock lowers number of new enrollments
• Numerous students unable to pay tuition, other fees 
• Many universities paying teachers, staff out of pocket
• Some institutes left rented campuses over fund crisis
• Even solvent universities losing out on a lot of revenue

Private universities have long been considered a booming business, evident by the fact that in urban areas those are as abundant as grocery stores. But aside from a few top-notch institutions, many are now struggling with financial issues triggered by Covid-19 restrictions.

Some of the more solvent universities have been regularly paying salary to their teachers and staff since these institutions shut down in March last year, but even they do not have the funds to continue operations in such a way if the pandemic lingers on, insiders have said.

Families of countless students have been hit hard financially by the income shock, making it difficult for learners to enroll in new semesters, pay tuition fees and bear other related expenses. This loss of only revenue has become an existential threat for several institutions. 

The World University of Bangladesh is one of the establishments facing such a dilemma. The institution had admitted 500 students under the spring semester [May, June, July, and August] in 2020, but during the same period this year, it enrolled only 150 learners.

To make matters worse, students who are already enrolled have not been paying their tuition fees properly since March 2020. So far, only 10%-15% students have paid their full tuition fees in time.

Facing an unprecedented financial crisis, the university had to leave its two rented buildings located in Dhaka's Panthapath area. The institution is now operating from their under construction campus in Uttara.

Providing more details, World University of Bangladesh's Vice-Chancellor Prof Dr Abdul Mannan Chowdhury told The Business Standard, "We have never suffered from such a severe crisis of funds.

"The university is staying afloat solely on loans, and the situation is dire. We have already left two rented buildings due to shortage of money. We will go out of business if the Covid-19 pandemic situation does not improve quickly."

Even solvent universities losing revenue

The United International University said they have not yet suffered any financial issues due to the Covid-19 restrictions, but regardless of their solvency, they are concerned about the mounting operating costs.

The university's Vice-Chancellor Dr Chowdhury Mofizur Rahman said, "The institution has been paying the salary of teachers and staff on a regular basis ever since the restrictions began. However, it will be tough to keep going like this if the Covid-19 pandemic does not end soon."

Some private universities such as Brac University, American International University Bangladesh, and Independent University Bangladesh are not suffering from any financial issues, but they too are losing out on a lot of revenue, insiders have said. 

For example, the North South University (NSU) did not face any shortage of students amid the restrictions, as the volume of new enrollments for each semester remained mostly consistent with the pre-pandemic numbers.

But the university is losing revenue as numerous students could not pay the tuition and other fees in time due income shock triggered by the pandemic. 

On the matter, NSU Vice-Chancellor Prof Dr Atiqul Islam said, "New enrollments have decreased slightly, but the issue is not putting any burden on our ability to operate academic activities.

"We have lost a large amount of revenue, but we will always stand beside our students. The university is offering a 20% waiver to all the students amid the pandemic. We have also supported all students who lost their parents since March 2020."

There are 105 private universities in Bangladesh, and they have more than 3.6 lakh undergraduate and graduate students. More than 16,000 teachers and 13,000 employees are working at those institutions.

New enrollments drop significantly

Despite closing all educational institutions last year as part of the Covid-19 restrictions, the education ministry had permitted all academic activities to continue online. 

However, students who passed their HSC exams in 2020 are still waiting to participate in admission tests at public universities. This issue is preventing them from applying at private institutions, insiders have said.

Also, that year's HSC results were published after seven months, further decreasing the volume of enrollments. 

Studying at a private university is significantly more expensive compared to a public one. Income shock triggered by Covid-19 is one of the major reasons behind the low number of new enrollments at private institutions, insiders added.

Poverty in Bangladesh almost doubled to 42% in December 2020 from 21.6% in 2018, according to a survey conducted by the South Asian Network on Economic Modeling (SANEM) published in January this year.

Responding to a query, Association of Private Universities of Bangladesh's (APUB) President Sheikh Kabir Hossain said, "The enrollment of fresh students to at least 40 private universities in the spring semester has decreased by 70% when compared year-on-year.

"The majority of these institutions are just trying to survive the crisis, and their financial situation is dire. We are building the future generation of Bangladesh, who will rise to serve the nation in the coming days. The government should offer its support to this sector."

He continued, "Though we requested financial support from the government through loans, we are yet to receive a response in this regard. So, we have sought permission from the authorities to withdraw our fixed deposit.

"If the government does not provide any aid, I fear that many private universities will have to shut their doors for good."

Hope is fading, rent is coming due

Board of Trustees Chairman at the University of Global Village, Md Imran Chowdhury said, "The amount of fees paid by students since the closure of educational institutions has been very poor. We use five rented buildings for academic and residential purposes, but the rent remains due for more than six months. 

"We had held out hope that a good number of students would enroll here after the publication of the HSC result. But it looks like they are waiting to participate in public universities' admission tests."

The Vice-Chancellor of Stamford University Bangladesh, Prof Mohammad Ali Naqi said, "The university authorities have been struggling to pay full salaries to the teachers since the restrictions were announced. 

"But paying them sometimes becomes impossible as the number of students enrolling is decreasing with each new semester. We need at least 600 students each semester, but we are getting less than 200 now."

The university will not be able to continue paying the teachers if such a situation continues, he said, adding, "Though our expenses have decreased due to online classes, our revenue has dropped too. I do not know how much longer we will be able to survive."

Some private universities cut their teachers' salary by 30%-60% last year to stay afloat amid the pandemic. This pay cut forced many part-time teachers to leave their jobs. Even the permanent teachers are concerned over losing their employment, insiders told The Business Standard.