Progressive introduction of an approval mechanism for collection of charges other than school fees by private schools

     The education system in Hong Kong offers parents diversified choices, among which private schools (including international schools) have been playing a unique role in offering local or non-local curricula according to their school aims and mission. Different from schools funded by the Government, private schools operate on a market-driven basis and enjoy greater flexibility and autonomy in various aspects, such as financial arrangement, mode of operation, student admission and curriculum design. When deciding whether to opt for these schools, parents have to prudently consider the level of school fees and other charges they need to pay (e.g. through schools’ issue of debentures, collection of capital levies and fees for nomination right) in addition to their children’s educational needs. There have been cases of disputes between parents and private schools over school services. Once these cases come to the notice of the Education Bureau (EDB), they would be followed up by the bureau having regard to the actual circumstances. While the EDB will scrutinise school fees proposals from private schools, it is progressively introducing a comprehensive application and approval mechanism to regulate private schools’ collection of charges other than school fees.

Other charges only be collected for schools’ long-term development needs

     All along, some private schools have been securing funds to meet their financial requirements in relation to learning and teaching, school development, school premises facilities, infrastructure projects, etc., by taking out loans and running various fundraising schemes. The funds thus procured are mainly used to build up a reserve to support long-term school development needs and major school improvement works such as construction of academic buildings.

 
     In recent years, private schools have resorted to more diverse means (such as issue of debentures, collection of capital levies and fees for nomination right) to raise funds. Such practices have not only aroused the concerns of parents and the EDB, the Office of the Ombudsman also released a Direct Investigation Report on the matter.

EDB working on a comprehensive application and approval mechanism to address concerns over collection of other charges

     In light of the public concerns and the views of the Office of the Ombudsman, the EDB is drawing up a comprehensive application and approval mechanism to regulate private schools’ collection of other charges such as capital levies, fees for nomination rights and debentures. Given private schools’ unique mode of operation, the EDB will consider their actual circumstances and needs when putting in place the mechanism so as to avoid causing excessive impact on school operation or development plan. In the process, care will also be taken to safeguard parents’ interests. 

     The EDB has been maintaining communication with the private school sector on the framework of the proposed mechanism since November 2020 to learn about schools’ actual operation in collecting other charges and their views on the matter. In principle, the comprehensive approval mechanism embodies four key principles, namely compliance requirements, school governance, information transparency and safeguard of parents’ interests. For example, on enhancing transparency, in addition to ensuring that the collection of other charges is complied with the Education Ordinance, Education Regulations and other relevant legislations, schools will be required to keep parents clearly informed of the type and amount of the charges, the redemption arrangements (if applicable), the use of the funds raised, parents’ rights and interests, agreement terms, etc. Parents’ concerns should be properly addressed to enable them to make informed choices, including whether to enrol their children in the private school concerned and whether to join the relevant fundraising schemes, and help them assess the risk factors involved in participating in a fundraising scheme.

Transitional arrangement prior to implementation of the new application and approval mechanism

     While the EDB is working on the comprehensive application and approval mechanism, a transitional arrangement was introduced last year for the collection of other charges starting from the 2020/21 school year. Under this arrangement, private schools are required to submit applications to the EDB. Approvals will only be granted upon taking into account, among others, the purpose and use of other charges; whether parents have been consulted or informed of the justifications and arrangements for running fundraising schemes prior to collection; whether parents’ concerns have been properly addressed, etc.

Consider the continuous operation of schools when exercising parents’ right to choose a school of their choices

     As self-financed establishments, private schools are required to bear all of their own operating expenses. Their operation and financial position are directly affected by various factors including staff salaries, school premises rental, maintenance expenses, etc. Against the background of a declining school-age population, some schools have felt the impact in terms of student enrolment and attrition. If under-enrolment persists in the long run, the financial position and operation of the affected private schools will be inevitably run into problems and closure may result, no matter whether other charges have been collected. This has happened before. For this reason, before enrolling their children in private schools or participating in any fundraising scheme offered by these schools, parents are advised to gather information about the schools by learning about the purpose of and justifications for running fundraising schemes; reading carefully the details and agreement terms of the schemes; obtaining from the schools more information about their financial position, etc. Such knowledge will help parents assess the possible risks involved and their level of confidence in the schools’ continuous operation, and in turn safeguard their own rights and interests.

18 November 2021