In a landmark move aimed at ending arbitrary fee hikes by private schools and providing long-awaited relief to lakhs of families across Punjab, the Bhagwant Mann Government has announced a sweeping regulatory framework that caps annual fee increases at 5%, mandates refunds of excess fees collected from parents wherever schools breached the annual limit during the last three years, and prescribes stringent penalties that can ultimately lead to cancellation of a school’s recognition.
The proposed legislation, which CM Bhagwant Singh Mann declared as the country’s toughest law against arbitrary fee hikes by private schools, will be introduced in the upcoming Assembly session and will apply to all private schools across Punjab. Significantly, the 5% ceiling will cover not only tuition fees but all mandatory charges and funds collected by schools, closing avenues that institutions have often used to burden parents with additional costs. Stating that the unchecked fee hikes were enabled by amendments introduced by the previous Congress Government in 2019, CM Bhagwant Singh Mann asserted that the new law would restore accountability in the education sector, protect parents from exploitation, and permanently end the harassment of children and families over school fees.
Taking to X, CM Bhagwant Singh Mann stated: “After the tragic incident in Amritsar, I have received hundreds of calls from parents over the past 24 hours regarding arbitrary fee hikes by private schools. Considering the future of our children and the immense distress being faced by parents, your Government has taken a very important and stringent decision.”
The Chief Minister further wrote: “No private school in Punjab will now be allowed to increase its annual fee by more than 5%. Furthermore, schools that have increased fees by more than 15% over the last three years will be required to immediately refund the excess amount collected from parents.
To ensure the effective implementation of this decision, we will soon bring an Ordinance. The 5% cap will not apply only to tuition fees but will also cover all other mandatory funds and charges collected by schools.” “This will be the strictest regulation of its kind anywhere in the country, and no school will be granted any exemption.
The exploitation of parents and students in the name of education will no longer be tolerated in Punjab,” the post concluded. Addressing a press conference, Punjab Chief Minister Bhagwant Singh Mann said that the fee structure of private unaided schools is currently governed by the Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, which was amended in 2019.
However, he noted that successive governments failed to implement the law effectively, allowing schools to impose excessive fee hikes on parents. The Chief Minister stated, “The Punjab Government has decided to put a cap of 5% on annual fee hikes so that no school can increase fees beyond this limit.
We will bring an Ordinance in this regard. Schools that have increased fees by more than 15% during the last three years will face strict action. The original 2016 Act clearly stipulated that fee hikes should not exceed 8% of the previous year’s fee, but this provision was diluted through amendments introduced by the previous government.”
The Chief Minister stated that the 2019 amendment allowed schools to increase fees beyond the prescribed limit through a disclosure mechanism, which required schools to publicly display proposed fee hikes on notice boards, school websites, and the website of the Department of School Education before admissions commenced.
“Though the law mandated transparency regarding fee increases, these provisions were rarely implemented in practice. As a result, parents continued to face unjustified and excessive fee burdens,” he added. CM Bhagwant Singh Mann said that all pending complaints related to fee hikes would now be examined and acted upon.
“The Regulatory Body will keep a close watch on excessive fee hikes. It will ensure that any increase in fees is justified by actual expenditure or developmental activities and does not result in profiteering. It will also ensure that funds collected from students are not diverted for any other purpose.
In cases of serious violations, schools can face penalties, withdrawal of recognition or affiliation, and orders to refund excess fees collected from students,” he said. Describing the move as a historic intervention in the education sector, the Chief Minister said the Ordinance is aimed at ending the exploitation of students, particularly those belonging to economically weaker sections.
“This legislation is intended to stop the exploitation of students and their families. No child should ever be pushed into despair because of the high-handedness of institutions demanding exorbitant fees. Punjab will have the toughest law in the country against unregulated fee hikes by private schools,” he asserted.
How the New Fee Regulation Framework Will Impact Parents, Students and Private Schools
The proposed Ordinance builds upon the Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, which governs fee structures in private unaided schools across Punjab. While the Act allows schools to determine their own fees, it explicitly prohibits profiteering and the collection of capitation fees.
Under the original law, annual fee hikes could not exceed 8% of the previous year’s fee. However, amendments introduced in 2019 allowed schools to increase fees beyond this limit through a disclosure mechanism that required proposed fee hikes to be displayed on school notice boards, school websites and the website of the Department of School Education before the admission process began.
According to the Punjab Government, these provisions were rarely enforced in practice, resulting in unchecked fee increases in many institutions. Under the new framework proposed by the Punjab Government, annual fee hikes will be capped at 5%.
The government has also indicated that schools which increased fees by more than 15% during the last three years may face scrutiny and action. All pending complaints relating to excessive fee hikes are expected to be examined by the authorities.
Parents already have the legal right to challenge fee hikes before a district-level Regulatory Body. Under the existing law, complaints must be scrutinised within 15 days of receipt and decided within 60 days. The Regulatory Body enjoys powers equivalent to those of a civil court while examining cases.
The body is headed by the Deputy Commissioner or Additional Deputy Commissioner of the district and includes the District Education Officer (Secondary) as Member Secretary, along with two nominated members. The law also grants significant oversight powers to the Regulatory Body.
It is empowered to ensure that school fee structures remain within reasonable limits, prevent profiteering, examine excessive fee hikes, verify whether increases are justified by higher expenditure or developmental activities, and ensure that money collected from students is not diverted for purposes unrelated to education.
Schools found violating the law face a graded penalty system. For a first violation, fines can range from ₹30,000 for primary schools to ₹1 lakh for senior secondary schools. Repeat violations attract higher penalties, ranging from ₹60,000 to ₹2 lakh.
In cases of a third violation, authorities may withdraw a school’s recognition or affiliation in addition to imposing financial penalties. The Regulatory Body also has the power to order the refund of excess fees collected from parents. The Punjab Government is also examining mechanisms for financial audits of private schools.
One proposal under consideration involves empanelling Chartered Accountants to review schools’ financial records from the previous three to five years, including fee collections, expenditure, salaries, infrastructure investments, reserves and related-party transactions.
Such audits would help determine whether fee hikes were genuinely justified and whether collected funds were utilised for educational purposes. The proposed Ordinance is intended to strengthen enforcement of these provisions, tighten oversight of private schools, provide greater transparency in fee fixation, and offer parents a stronger mechanism to challenge arbitrary fee increases while ensuring that educational institutions operate without profiteering.