Editorial: Reality check for private universities

Supreme Court’s order seeking greater financial transparency from private universities was long overdue and brings renewed focus on regulation, student interests and accountability

The growing demand for higher education cannot be met by government-funded institutions alone. The private sector has an equally important role to play in expanding educational opportunities for the country’s youth. However, unbridled commercialisation of the education sector by profit-driven private players is a major cause for concern. More often than not, they impose exorbitant fees that are not matched by infrastructure and amenities and resort to misleading self-promotion. While the contribution of the private sector to promoting and expanding higher education cannot be overlooked, what is needed is a proper balance between regulation and responsibility. The Supreme Court’s latest order directing private universities across the country to disclose their financial records is a welcome development. The landmark order ruled that no private university should be allowed to run as a profit-making institution and sought details of how universities generate, manage and use their financial resources. The audited financial records covering the last five years, utilisation of funds, fee structures, surplus investments and payments made to persons not directly involved in educational functions are among the details that have to be presented before the apex court. It has also directed the Centre and State governments to collect detailed information about admissions, fees, use of surplus funds, staff recruitment and grievance-redressal systems of private universities and colleges. With this unprecedented order, the stage is set not only for intense scrutiny of the financial management by private universities but also the conduct of regulators. It’s a reality check that was long overdue.

The top court’s observation that private universities must serve the larger public purpose of education and not operate for profit hits the nail on the head. Robust regulatory oversight to check any exploitation of students is essential. Over the years, a highly competitive private sector has relied on exaggerations and half-truths to attract students. With minimal focus on impactful academic research, there is often misrepresentation of the facilities available and placement statistics. If the lack of faculty development is problematic, more worrying is the reliance on under-qualified and overworked staff. Ultimately, students bear the brunt as their interests are compromised. There are over 470 private universities in the country, apart from several ‘Deemed to be Universities’ that operate under private management. Within a span of 10 years, enrollment in private universities nearly tripled to over 34.6 lakh students, moving their market share from 20 per cent to one-third of all higher education students in India. The University Grants Commission (UGC) regulates private universities primarily through the UGC (Establishment of and Maintenance of Standards in Private Universities) Regulations to ensure educational quality and transparency. Unlike public universities, private entities receive minimal state or central research grants and have to depend heavily on tuition fees to fund research labs. Navigating overlapping compliance checklists between the UGC, AICTE, and state-level councils is a major challenge for private universities.