Investing in education – Balancing profit and quality – Part 2: Consequences of chasing profit

Play the "capital mobilization" trick

Mr. PTH (residing in Da Kao Ward, District 1, Ho Chi Minh City) said that he has 3 children studying at the American International School (AISVN). Of these, 2 have graduated and 1 is currently in 7th grade. Mr. H.'s children study under a loan contract totaling 280,000 USD (nearly 7 billion VND) with full documents. The contract clearly states: "The school does not collect tuition fees when students study at the school. After the students graduate, the school will repay the capital within 30 days...".

However, up to now, after 3 years, the school has repeatedly made commitments but has not yet repaid the loan. There are many cases of lending money to the school in the form of capital mobilization like Mr. H. Up to this point, all have not been repaid as committed in the contract.

The AISVN incident is not an isolated incident. Previously, many parents whose children studied at Choi Xanh International Primary-Middle-High School (in Hoi An City, Quang Nam Province) also unexpectedly received an email notification from Ms. Catherine Clare Mckinley (52 years old, British nationality, authorized person to run the school) with the content: all students have been transferred to APU American International School Da Nang after this school organized enrollment and collected tuition fees of more than 14 billion VND.

The old location of Green Shoots International School (Hoi An City, Quang Nam Province) has been demolished by the leasing unit. Photo: XUAN QUYNH

The announcement also stated that Ms. Catherine is no longer running the school. However, APU Danang American International School has refused to accept students from Choi Xanh International Primary-Middle-High School because it does not directly receive tuition fees from parents. The conflicting information has caused parents to panic, and they have sent petitions to the police to report signs of tuition fee embezzlement...

A former leader of the Ministry of Education and Training said that capital mobilization at private high schools has been happening in many schools and has existed for a long time. This is an agreement between parents and schools but has many potential risks leading to failure if the mobilized money is invested in other areas by investors.

Meanwhile, in the 2024-2025 school year, detailed information on tuition fees of 83 private high schools (including schools with foreign elements) in Ho Chi Minh City also made many parents worried, because most schools increased tuition fees compared to the previous school year. For example, some schools have "huge" tuition fees such as North American International High School with 59.6 million VND/student/month; South Australian High School with 55.1 million VND/student/month; Tesla High School with 53 million VND/student/month... The question is how much tuition fees must non-public schools increase to be "whistled" by the management agency?

Mr. Tran Khac Huy, Head of the Financial Planning Department (Ho Chi Minh City Department of Education and Training), informed that private schools are allowed to increase tuition fees and educational service fees at the beginning of each school year, but not exceeding the maximum increase according to the regulations of the management agency. If any unit increases tuition fees by more than 10% or increases service fees and educational support fees by more than 15% compared to the previous school year, the Department of Education and Training will remind and request to adjust the increase to not exceed the regulations.

However, tuition fees and educational service fees of non-public schools are implemented based on agreements with parents. The Department of Education and Training does not have the authority to intervene in the fees of schools, but only controls whether the annual increase rate exceeds the regulations. The review of operating conditions at the beginning of each school year is to have a basis for assigning enrollment targets, but cannot intervene in the tuition increase roadmap of schools.

In trouble with the law

Investors (also known as school owners, for private schools) have full authority to decide on salaries for staff, teachers, tuition fees, infrastructure investment plans, etc. Therefore, when a school owner is chasing profits, they will do anything to have a large source of income, even buying and selling degrees.

From October 2018 to April 2022, MNV (33 years old, residing in Thanh Loc ward, District 12, Ho Chi Minh City) established many units at the same time: Truong Son Human Resources Company Limited, Truong Son Technical Economics School, Saigon Technical Economics Company Limited, Saigon Technical Economics School, Saigon Technical Testing Center in Quang Ngai province, Viet RDC Education Joint Stock Company, Southern Technical Economics School, Southern Technical Testing Center in Binh Duong province; assigned a number of individuals to work as vice principals and employees.

These units did not organize training and testing according to regulations but sold vocational certificates. V. and many individuals signed, issued, and sold 14,268 certificates of Truong Son Technical Economics School, 8,351 certificates of Southern Technical Economics School, a large number of certificates of Saigon Technical Economics School, and many labor safety cards of the Southern Technical Inspection Center without training and testing, illegally profiting more than 6.2 billion VND. In this case, 69 individuals were sentenced by the court to prison terms ranging from 16 months to 20 years.

Up to now, the case of Dong Do University granting 429 fake English degrees to earn more than 7.1 billion VND is still a valuable lesson for investors. For personal gain, from the end of 2017 to the beginning of 2018, Tran Khac Hung (Chairman of the Board of Directors of the school) organized many meetings with the board of directors, training department, training institute, and finance department to thoroughly grasp the policy of granting degrees without recruiting and training. As a result, the chairman of the board of directors fled, from the principal to those involved were caught up in the law with sentences ranging from 12 months of suspended imprisonment to 12 years in prison.

Before being prosecuted and temporarily detained by the police to investigate the crime of "Fraudulent appropriation of property", Mr. Nguyen Ngoc Thuy (42 years old, Hanoi) - Chairman of EGroup Corporation and General Director of Apax English Joint Stock Company (Apax Leaders) was a famous businessman with the story of dropping out of university and building a trillion-dollar corporation from scratch.

In 2015, Apax Leaders officially entered the English teaching market in Vietnam, quickly rising to the top position thanks to using 100% foreign teachers and thoroughly applying technology. According to statistics, during its "golden" period, Apax Leaders had a system of 130 ESL and IELTS English teaching centers spread across more than 32 provinces and cities across the country with tens of thousands of students studying. However, since the Covid-19 pandemic, this unit has continuously closed many centers, entangled in tuition debt scandals with parents nationwide.

By mid-March 2024, the Department of Education and Training of Ho Chi Minh City requested Apax Leaders to refund a total of about 108 billion VND in tuition fees to parents in Ho Chi Minh City. This unit has paid 14.2 billion VND, still owing 93.8 billion VND. With the above debt, Apax Leaders proposed to pay in 2025, paying 4 billion VND each quarter, divided equally among parents until completion, the remaining debt is carried over to the following year. However, according to parents' feedback, the "debt collection" journey is being prolonged, and it is not known when the tuition fees will be refunded.

According to Associate Professor Dr. Tran Xuan Nhi, former Deputy Minister of Education and Training, in reality, many education investors have become visibly “rich” thanks to educational business activities. In particular, the main contribution to schools is the tuition fees of students. Some universities initially spent only a few hundred million VND to rent facilities, but now it has reached thousands of billions of VND.

Of course, this money is not spent by the school owner but is the profit from the school's operations, the contributions of students, teachers, etc. Therefore, education investors need to demonstrate their social responsibility through reasonable tuition policies, care for poor students, and ensure fair access to education for all learners.

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Currently, some universities and colleges also require students to pay a deposit when admitted through early admission methods. According to Mr. VTL (Di An, Binh Duong), recently, FPT University sent a notice that his child was admitted directly and exempted from tuition fees...

However, the admission notice was accompanied by a request for parents to pay a deposit of 5 million VND. Not only Mr. L., Mr. TDT (District 3, Ho Chi Minh City) also said that his child registered for the IT major based on his academic records, received an admission notice and was asked to pay a deposit of 5 million VND.

PV GROUP

Source: https://www.sggp.org.vn/dau-tu-giao-duc-can-bang-loi-nhuan-va-chat-luong-bai-2-he-luy-khi-chay-theo-loi-nhuan-post755845.html