Decoding the FIITJEE fiasco: Is the brick-and-mortar coaching model crumbling?

The FIITJEE salary delays is one layer of a larger underlying issue in the brick and mortar coaching model for entrance exams.

In an internal mail to employees, the Delhi-headquartered coaching institute delayed salaries for 50 per cent of employees citing various reasons, from employees not getting the required numbers for coaching aspirants to saving investor money.

The institute since 1992 has become synonymous with preparation for the Joint Entrance Exam (JEE) of entering prestigious engineering institutions including the Indian Institute of Technology (IITs). 

But what has led to this slump in tuition infrastructure?

The Ground Reality: What have students experienced? 

According to former students, entrance exam coaching for engineering and medical streams is an unsaid norm for class 11 and 12 students, wherein they choose either an established brand name or an institute close to their home.

But there have been instances of students as young as in class 6 being enrolled in competitive exam coaching for engineering and medical exams. 

Some prominent school chains also allow for dummy schooling, where the main focus is on exam preparation.

Incidentally in January this year, the Central Government has pushed out guidelines for coaching centres wherein no coaching centres can provide admission to students under the age of 16. 

Word of mouth, brand name due to toppers produced each year and large seminars followed by follow-up calls by sales team are determiners for choosing the institute.

“When I first enrolled in FIITJEE, the fees seemed exorbitant. The ratio of teachers to students was disappointingly low. The constant barrage of tests only seemed to amplify stress rather than foster genuine learning. It's disheartening to see how coaching institutes like FIITJEE have transformed into mere profit-driven enterprises, losing sight of their original purpose of imparting quality education,” a former student shared. 

A discriminatory environment for aspirants was also visible during examinations, an engineering student from Mumbai shared.

“Bigger coaching centres like IIT-PACE used to bring their students in private buses to exam centres, arrange refreshments in breaks, helped them revise and clear doubts till the last minute. Often it is said, these classes used to have different divisions basis the performance of the students and past grades,” he said.

The Aftermath: What do educators feel?

Inderpal Kaur, Principal at Sanskruti School in Madhya Pradesh’s Ashok Nagar shared that for every 100 students in class 10, only 20-30 per cent are left in class 11 and 12.

“This is because the rest migrate to coaching hubs Indore or Kota in Rajasthan. Since seats are limited and students face tough pressures and competition, the students eventually come back. (to our school),” she noted.

There is intrinsic and extrinsic pressure on parents for sending students to these coaching institutes, she noted, which stems from their expectations and societal pressure. It is important for students to complete schooling before going for higher education, she shared, since children need to be mature enough for handling stress.

“Students withdrawing admission from these institutes is probably the cause behind the fee pressure on these coaching centres,” she said.

The coming years should not be confined to the Science stream, Kaur said, with the National Education Policy opening options for other professions in the creative realm.

Emphasising on the element of competition involved in coaching centres,  Dr. Mudassir Nazir, Deputy Dean at the Faculty of Law in Galgotias University said coaching centres need to be regulated.

“Teaching may be sacrosanct, but the harsh reality is that these centres are running a commercial business with hubs in Mukherjee Nagar and Karol Bagh,” Nazir said.

The situation is worse for institutes which run out of residential areas, having crammed room setups.  There is also more emphasis on advertising, rather than focusing on spending on studentsl, even as these institutes charge hefty amounts ranging from Rs 3 to 5 lakhs. 

“This leads to parents believing their wards can also qualify for the exams,” Nazir said.

 Schools and universities have boards and the University Grants Commission (UGC) to govern them, he said, but the sector is more or less unorganised with no parity in salaries, monopoly in the model and even land and property rules not in place in case of a calamity.

The Affected Employees: What are their rights?

A company can defer salary payments for two months but only in case of overbearing losses, after which it is mandatory for them to pay salaries, even if that means they need to sell assets for the same, according to Shashishekhar Tripathi, a Corporate Lawyer at a Noida-based employment agency.

One overlooked aspect employers incorporate in offer letters are performance parameters, which can be subjective and ambiguous.

“Companies may utilise these undisclosed parameters as a defense for layoffs,” he added.

 Abhishek A Rastogi, founder of Rastogi Chambers said even as the employment contract is a legal valid contract, this does not include a situation where the employer does clear salary dues.

“As a corollary, the only remedy which remains with the employees is to drag the employer to the court for the payments due,” he said.

The issue of non-payment goes beyond the purview of simple work contracts, according to lawyer and entrepreneur Rouble Chhabra, which brings in a need for indemnity contracts on behalf of employees.

An indemnity contract provides compensation to the aggrieved party, in this case the employee, for loss caused due to actions of the other party, the employer.

The other option employees have, Chhabra said, is to approach the labour court under Section 33(C) of the Industrial Disputes Act, 1947 within 1 year from the date of non-payment of salary, she said.

“The next recourse is to file a civil suit for recovery under Order 37 of the CPC Act,” she added.

Shift Against Brick and Mortar?

Kavita Sharma, co-founder and CEO of Ziyyara Edtech said the salary delays stem from the education industry model running short of a forecast on expenses and sales.

“The education industry does not work for 12 months, resulting in the model running short during the 3 months of vacation, which calls for a planning for these months ahead,” she said.

The issue of salary delays seen in many such institutes, Sharma said, stems from not prioritising employees in teaching and operations, and also the availability of more options in online-based learning.

This shift against brick-and-mortar coaching centers can be attributed to the rise in online learning platforms, and options to attain digital education as opposed to traditional coaching centres, according to Founder and CEO Assiduus Global and angel investor Somdutta Singh. 

“Brick-and-mortar coaching centers often incur significant overhead costs such as rent, utilities, and maintenance. Online platforms eliminate many of these expenses, making them more cost-effective for both students and investors,” she said. 

Compared to brick-and-mortar establishments, she said, online learning platforms have lower overhead costs, resulting in higher profit margins which attracts investments due to higher returns with lower operational expenses. 

Scrutinising the financial stability and management practices of companies is essential to mitigate risks associated with cash flow concerns and operational challenges. This comes amid edtech titan BYJU'S in investor ire for its business operations. 

The once $22 billion-valued edtech, which revolutionised coaching for competitive exams ranging from IIT-JEE and CAT to UPSC, was also in news for delaying employee salaries, parents protesting against non-refunds and exorbitant advertising.

But amid a debate on what structure is most viable for students, Edtech company Physics Wallah said it caters to students studying in both offline and online modes.

The edtech for competitive exams preparation has an omnichannel model of preparation through coaching centres and in-app doubt resolution.

Ankit Gupta, CEO for Physics Wallah Offline said its Vidyapeeth centres with a pan-Indian presence provide quality education to students within proximity.

“Our centers cater to students studying in both offline and online modes, with the same lectures, study material, and facility of doubt resolution available on the app as well,” he said.

Is Engineering Key to Success?

Abhijeet Mukherjee, CEO of UK-based edtech Zamit said students should not be dependent on tuition, but it seems to be the norm especially for them to get through highly competitive exams.

“One of the other reasons why there is an inclined focus towards rigorous coaching for such institutions is due to competition in private sector jobs, and parents’ aspirations. Secondly, entrepreneurship is still not being accepted as a wise option,” he said.

While most parents are aware of career options, he said parents from tier-II and III are not as well versed with the employment scenario.

Sharing that many times, engineers have asked him for advice on ‘what next’ after going through the engineering drill, he said the reason for this is career thinking beginning after getting through the course.

“Being an engineer or doctor is not a parameter of success, he emphasised.