When the Education Minister, Kapil Sibal terms the 100% cutoffs as "irrational" and a setback, it is he who is being irrational. The colleges announcing these high cutoffs are being as rational as they can be under the circumstances. If a few tens of thousands of students are chasing a few hundreds or may be a couple of thousand seats in colleges in Delhi, the colleges have no choice but to announce a cutoff to filter out students. Of course, everyone wants to study in a reputed educational institution.
The much sought after Shriram College of Commerce in Delhi announced that the cutoff marks for the B.Com Honours course in their college would be 100%. It seemed that anyone who scored 99.5% wasn't good enough to join that course. The college principal tried in vain on national television to defend his college arguing that the cutoff applies only to a very miniscule number of students who had not studied any of the commerce subjects in Class XII, yet wanted to apply for a B.Com course in their college. Even a 100% cutoff may not be enough to solve the college's problem if the number of seats for such students were just a handful and there were far more than a handful of such students who had scored 100%. In such a situation, it would effectively have to be admission by lottery with, the college needing to resort not to marks, but a random draw of lots to pick a handful of the students who had scored 100% out of hundreds of such students.
The IIT JEE with a lakhs of students fighting for thousands of seats is another high cutoff at play.
Today, we are living in an age of high cutoffs, just as much as an age of high reservation in educational institutions. The solution to address both these problems is fairly obvious. It is the supply, stupid! We've been through policy constrained supply shortages in the past in other sectors like food, telecom and transport and have found our way out of the rut we were stuck in .We need to do the same again in education. To the Government's credit, it has been trying to do its bit by trying to expand the number of IITs and setting up a few new institutions from scratch, but that is just a drop in the ocean.
What can we do to make high cutoffs and high levels of reservations redundant? Here are a few ideas worth considering and debating.
- Expand the supply of education rapidly.
More institutions will mean more students will have access to education. The rapid expansion of the supply of engineering colleges in Tamil Nadu in the early nineties has demonstrated a large number of people gained access to engineering education that was till then unavailable to them due to sheer shortage of institutions. Of course, there were quality and execution challenges in the process. When there is rapid expansion, variable quality and poor execution are inevitable in the short term, but they can be addressed over the long term by taking appropriate steps as outlined below.
- Permit a diversity of options in institutional structuring and funding
The Government today knows that it is in no position to expand the supply of education rapidly all by itself. It simply does not have the finances to do so.
We must allow educational institutions to be set up and run by the Central and State Governments, private players or through public-private partnerships of all varieties. Educational institutions should also be given the freedom to choose to incorporate themselves as non-profits, for-profits or any other mixed variety, as trusts, charities or companies. This flexibility in institutional structuring and funding will attract a large number of social and commercial entrepreneurs to the education sector who in turn will attract a huge level of investment into the sector to help expand supply rapidly.
Setting up and running educational institutions can be declared as a "priority sector" so that public sector and private sector banks can freely fund the capital expenditure required to set up thousands of new educational institutions and also to fund the working capital required to run the existing and new institutions (Currently, only educational loans to students are termed as priority sector). Even you and I should be allowed to invest in a education sector mutual fund which could aggregate the investments of a huge number of citizens like us and fund experienced educational entrepreneurs to set up and run more institutions for a reasonable rate of return.
- Ensure high quality standards through strong regulation. But DO NOT regulate the growth of institutions.
We must set up a national Registrar of Educational Institutions (REI) akin to the Registrar of Companies to regulate all accredited schools and colleges. The REI will be responsible for regulating all Government, Private and PPP run educational institutions. Every accredited educational institution (both in school education and higher education) will need to register with the REI and set up a board of directors who will be responsible for the institution and liable for statutory compliance. This registration process will be fairly straightforward to start a new institution - as easy as the procedure to set up a new private limited company.
Quality must be constantly monitored not only in terms of the availability of infrastructure, finances or the general reputation of the educational institution, but also through the results of output testing of the knowledge levels and understanding of the students passing out, through standardised state-wide or nation-wide tests.
Every educational institution will be mandated to get itself rated once a year by a professional rating agency certified to do so by the REI. Every institution's rating shall be made public by the rating agency. The rating agencies will not be commissioned and paid by the educational institutions themselves- but will be allotted at random by the REI to prevent the institutions from shopping around for a sympathetic agency. The rating agencies will be paid by charging every student in an institution a small rating fee per year which will be paid to the rating agency. The educational institutions will not be allowed to suppress the rating agency's opinion/rating. If an institution is dissatisfied with a rating, it may petition a tribunal under the REI and the tribunal will decide whether to let the published rating remain or if the institution needs to be re-rated by another rating agency.
- Mandate and ensure information disclosure and an extremely high degree of transparency to eliminate information asymmetry.
The REI will require mandatory annual financial audits of every educational institution by a firm of chartered accountants and the audit reports will be made public. The REI will also mandate e-filing of detailed quarterly and annual reports of the assets and liabilities, the finances, fee structure, academic and administrative performance of each and every institution. The REI will make public all the information filed with it by publishing it on the Internet for anyone to access. Parents and other interested parties will be able to review the school's performance on an ongoing basis. Those for-profit schools that make profits will have to be fully transparent about their income, expenditure and profits. This level of transparency will result in intense competition, thereby keeping the school managements on their toes. Anything that one good school does well can be picked up and copied by other schools, thereby raising quality standards overall and preventing monopolies or inefficiencies through lack of information. There will still be loopholes or even structural lacunae that may enable some schools to generate higher than average profits, but such loopholes and lacunae can be addressed with appropriate legislation or policy as and when they are discovered.
- Enable transfer of control of educational institutions from managements of poorly run institutions to those of well run institutions.
Most importantly, by enabling corporate structuring in the form of commercial entities along with a high degree of transparency, experienced school managements will be in a position to take over poorly run schools by paying the managements of such schools a consideration for buy out. Such changes of ownership and the consideration paid will also be made transparent to the public. The Government may also permit government schools to be taken over on contract by private school managements under this model, with the Government providing the funding and the private schools taking care of running the school. One of our biggest challenges today is to unlock the potential of poorly run government and private educational institutions. A lot of money has been invested in these institutions over the years and yet they are not being run well. In the purely non-profit regime, the managements of such poorly run schools (whether they are the government or private parties) have no incentive to cede control to any other party since they cannot personally profit by taking financial or other compensation for handing over the schools to some other management.
