Hyderabad school fees soar: Parents choosing to opt for schools offering no-cost EMIs to pay fees

A growing number of parents in Hyderabad are turning to installment plans offered by city schools due to soaring fees. This trend, initially emerging during the pandemic, has gained traction, with more schools raising fees. Many schools are now charging between anywhere between Rs 1.5 lakh to Rs 7 lakh per annum.

Here's how it functions: Schools collaborate with various fintech platforms providing no-cost EMIs or flexible payment options. Upon agreement with the platform, the school receives the annual fee upfront, allowing parents to repay in installments over a fixed period.

Parents find these plans advantageous, alleviating financial strain by breaking down payments into 12 smaller cycles, compared to larger, biannual or triannual schedules.

Also read/watch - Deadline for adding a nominee to your mutual fund and demat account is 31st December; check process

In an interview to TOI, Rachana Tiwari Shukla, whose child attends an Attapur K12 school, shares, "Opting for this allows me to pay around ₹12,000 monthly, rather than a lump sum of ₹45,000 every three months for my child in class 1. The company didn't impose additional fees."

For some, the availability of EMI options influences school choices. An IT professional, parent to a fourth grader, in an another interview to TOI explains, "Among five shortlisted schools, we chose one offering monthly payments through GrayQuest. Rising fees made us prefer breaking down payments."

Accoding to the same report, School administrations see this as mutually beneficial. Simi Nagi, principal of Pallavi Model School, notes the convenience for parents and streamlined payment processes. Pallavi Model School has partnered with Jodo pay, with 10% parental enrollment. At Future Kids School, Bandana Mushunuri, director of finance, cites a 30-40% adoption rate for EMIs.

Also read/watch - Markets extend rally for seventh week; Sensex crosses 71,000 for first time, closes nearly 1000 points up

However, investor Vishal Goel advises cautiousness. He emphasizes that while schools offer flexibility in fees, parents should approach these trends warily due to potentially unseen costs, noting that tie-ups can escalate operational expenses for schools.

For parents who are exploring such schemes here are some things to keep in mind to ensure that you don't end up paying extra charges.

1. Read the fine print of the contract in detail
2. Check for any hidden costs in the contract
3. Check the pentalty amount for non-payment of an EMI installment - this could be very high
4. Check if there is any penalty for pre-paying the EMI