Education Institutes Ordered To Cut Ties With Indian Edtech Startups

As online learning continues to be the primary driver of education in the post-pandemic market, concerns about dominance and abuse of market power are being raised by Indian government bodies and authorities. This time the focus has fallen on higher education or college degree and diploma programmes being offered by edtech startups in India.

In another setback for edtech startups, the University Grants Commission, which recognises and authorises higher educational institutions (HEls) in India, has urged such HEIs to withdraw any degree or diploma programmes being offered in partnership with edtech companies.

“The regulations mandate that these HEIs shall not offer ODL and/or Online programme(s) under any franchise arrangement and the HEIs themselves are completely responsible for the programme(s).”

The UGC claimed that certain edtech companies are running ads in newspapers and social media about degree and diploma programmes being offered in online or distance learning mode. As per the UGC (Open and Distance Learning Programmes and Online Programmes) Regulations, 2020 and its amendments, franchise agreements with edtech companies are not permissible and action will be taken against defaulting edtech companies as well as HEIs.

Cracking Down On Edtech

In December, India’s education ministry issued an advisory about edtech platforms, saying some firms were targeting families by getting the electronic fund transfer (EFT) mandates signed to activate the auto-debit feature. Edtech companies offering free services have to be carefully evaluated, the Ministry of Education stated in a notification, and urged parents, students, and all stakeholders to be cautious while deciding on opting for online learning or coaching through edtech platforms.

“Some edtech companies may offer the free-premium business model where a lot of their services might seem to be free at first glance but to gain continuous learning access, students have to opt for a paid subscription,” the ministry had stated at the time.

It further said that students and parents should ask for tax invoice statements and other details when purchasing devices such as edtech-branded tablets pre-loaded with content or apps. The ministry also recommended that subscribers do a detailed background check of edtech companies and their content quality before subscribing.

Parents are also advised to help their child understand features and marketing strategies by education apps that are being used to encourage more spending. “Record the evidence of spam calls/ forced signup for any education packages without complete consent for filing a grievance,” the advisory said.

Earlier this month, education minister Dharmendra Pradhan also hinted that the government is working on an edtech policy, similar to the ones to regulate ecommerce and other sectors. “I have asked all departments to issue strict advisories in this regard. We are also talking to the Ministry of Electronics and Information and Technology as well as the law department about how we can have a common policy on edtech platforms in India,” the minister had said, adding that edtech startups are creating a monopoly-like situation in India and exploiting students.

As per Inc42’s 2021 Annual Tech Funding Report, edtech startups in India raised over $4.7 Bn in 2021, or over 10% of the total funding amount for the year. K-12, skill development and test preparation emerged as the most-funded edtech sub-sectors, with over $3 Bn invested in test prep startups alone in the past year.