Rising Profits, Shrinking Access: How Long Will India’s Fee-Driven Education Growth Last?

A recent report by CRISIL Ratings paints a glowing picture of India’s education sector. Revenues are expected to grow by 11–13% over the next two years, driven by rising student enrolments and continuous fee hikes. From K–12 schooling to engineering and medical education, demand remains strong across segments. Private institutions appear financially stable, with steady cash flows and low debt.

But the real question is: Is this “growth” actually expanding access to education, or is it merely strengthening institutional balance sheets?

Fee hikes: The heaviest burden on parents

According to the report, rising inflation in urban areas is pushing schools to raise fees regularly. This income-driven growth model hits middle-class families the hardest—households already struggling to keep pace with the cost of living.

While increasing fees may be the easiest path to higher revenues for institutions, does it not make education increasingly unaffordable? The projected 9–10% annual revenue growth in the private K–12 segment highlights this very trend.

Growth is real, but so are rising costs

Alongside higher revenues, institutional expenses are also rising rapidly—staff salaries, administrative costs, and capital expenditure on new classrooms and infrastructure. This is why operating margins are expected to remain “stable” at around 27–28%.

In other words, while institutions earn more, there is little indication that students or teachers will see proportionate improvements.

Rising demand, limited opportunities

Another key takeaway from the report is that demand for engineering courses remains strong despite global economic uncertainty. Medical courses continue to see demand far exceeding supply. Even with government efforts to increase MBBS seats, thousands still compete for every available spot.

Meanwhile, demand for nursing, pharmacy, and paramedical courses remains moderate—an alarming sign, considering these fields form the backbone of India’s healthcare workforce.

Financially sound, but socially fair?

The most reassuring aspect of the CRISIL report is that institutions are expected to maintain strong cash flows without needing additional borrowing. Gearing levels and interest coverage ratios remain healthy.

But who is actually benefiting from this financial strength? Are more schools and colleges opening in rural areas? Are fees becoming more affordable? Is quality education becoming accessible to all?

The answers to these questions are far less encouraging.

The future of the fee-based growth model

Privatisation in Indian education has accelerated rapidly. But its social cost deserves equal attention. A sector boasting double-digit growth can only be considered truly successful if it invests more in quality and transformation, reduces the financial burden on the middle and lower classes, gives equal importance to public institutions, and ensures better pay and job stability for teachers and non-teaching staff.

Rising revenues alone do not strengthen education. Education becomes strong when it becomes more accessible, more equitable, and more meaningful.

CRISIL’s report offers a positive snapshot of the sector’s financial health, but it also reveals a parallel reality—education is becoming increasingly expensive, and the heaviest burden is falling on the poor and the middle class. This growth model urgently needs rebalancing.

Education should not be about profit-making—it should be about capacity-building. Until that balance is restored, the gap between economic growth and social reality in India’s education system will only widen.