International schools should not be able to scam parents

The school recently announced that it did not have enough money to sustain operations and unfortunately needed to end the school year early on April 26, a full month before the normal year-end date.

Like many other parents, Tu invested a hefty amount to let her child study in a private international school, with hopes that the high-end environment would help with his studying.

At AIS, Tu and other parents have loaned the school a large amount of money, ranging from VND1 billion ($78,700) to VND10 billion, without interest. In exchange, their children could study at AIS "free of cost." The money is supposed to be returned upon the children's graduation. In essence, parents are investing in the school, with the interest being the tuition fee of their children.

Besides the initial loans, on March 30, as AIS was on the brink of insolvency, the school asked parents to deposit an accumulated amount of VND125 billion ($4.92 million) to sustain its operation until the end of the school year. Unfortunately, the money was not a guarantee for the children’s education, as the school eventually had to close early.

From an economic perspective, parents are making a financial risk, with potential gains or losses. This investment also carries an inherent social risk to their children’s education prospects.

Once parents send their children to private schools, which follow international curricula, different from the public school system in Vietnam, the children are unlikely to be able to make a switch, due to a difference in education approach.

It is a one-way ticket. If there is any disruption in the middle of the education journey, the children suffer the most, and not every family has the means to deal with the consequences of these disruptions.

Essentially, the private education system is commercially driven. Private schools are a service provider, their products, with an advertised quality and cost, are sold to families.

Due to this commercial nature, at any time, the school may fail to provide the agreed-upon quality, or the family may not be able to afford the education costs of private schools anymore.

In the AIS case, while parents are concerned about the financial investment that they deposited at the school, they are likely more worried about the education prospects of their children.

They would then continue to finance the school, an investment that is more intuitive than logical. This creates an unbalanced relationship between AIS and the families, in which the families have a lot more to lose. In one way, we can say that AIS is holding themselves and all students to ransom.

The financial milestone that AIS set for parents was quite arbitrary: "VND125 billion" so that the school could "survive until the end of the 2023-2024 school year."

AIS is sending a loud and clear message: their survival is entirely dependent on the parents’ continuous financing. To parents, this is a lose-lose gamble, they either lose money or they lose their children’s education prospects. When the arbitrary VND125 billion financial lifeline required by AIS was not delivered by parents, AIS just closed the school, and parents were once again put in a precarious position.

After the VND125 billion, after the 2023-2024 school year ended, what next? How would the next school year turn out? In any case, there is an imbalance in the relationship between AIS and the parents. AIS holds the students’ future as a hostage in their business venture, leveraging the society’s future generations for financial incentives.

While the students and families would find a way forward, the AIS case should be considered seriously by policymakers to prevent similar cases from occurring in the future.

First, education service providers need to prove their financial operation capability beforehand. Second, if parents provide financial loans or investments in the education service provider, they should exercise their rights in corporate operations.

In private education, transparency is the key to solving the "educational hostage" situation that is going on in AIS, both in the parent-school relationship and the school operation.

*Vo Nhat Vinh is an R&D expert based in France.