Fee fixation
in private technical institutions
General principles of fee determination
The policy guidelines seek to ensure a fair fee structure to all
concerned, that is, the students/their guardians, the management, and faculty
members/employees. A bedrock of the policy is also to avoid commercialisation
and profit-making while simultaneously ensuring maintenance of standards and
upkeep of facilities/assets. Keeping these as prime considerations, the following
have been identified as the broad general principles for fixing of fees:
·
Prevention of profit making and ensuring the principle
of no-profit - no-loss
·
Without diluting the fundamental concern of avoiding
commercialisation, to make allowance in the fee so as to provide for
replacement and upgradation of facilities
·
Providing for a transparent and intelligible procedure
for fee determination
·
Bringing all private unaided institutions within the
purview of the scheme
·
Involving the state governments concerned in the
process of fee determination.
Applicability
The policy guidelines apply to the following:
·
Self-financing institutions imparting technical
education as defined under the AICTE Act, including institutions imparting
Post-Graduate Education in Management
·
Colleges, affiliated to the universities, operating on
‘no grant -in-aid' basis
·
Deemed to be universities operating on self-financing
basis
Committee in charge for determination of fees
Tuition and other fees for a professional college or class of
professional colleges are determined by a state-level committee, which consists
of the following members:
·
The vice chancellor of one of the universities in the
state, nominated by the state government
·
One of the secretaries in-charge of the Technical
education and finance departments of the State government or their nominees
·
Three experts, one each in economics, cost
accountancy, and institutional finance, nominated by the AICTE
·
Director of Technical Education of the State
·
Other eminent persons (eg. retired judges of Supreme
Court etc.)
Procedure adopted by the committee
The committee will give an opportunity to the institutions concerned to
furnish such material as they consider relevant for fixing the fees. The
committee has the power to demand information and details, which it considers
relevant, from the institutions. To carry out its functions smoothly, the
bodies put down action-calendars and deadlines for compliance of the
institutions concerned and for completing the committee's own tasks.
The committee can determine different rates of fee for institutions
falling in different classes, if a classification is justified on intelligible
and objective criteria, and is free to fix different rates for institutions
located in rural areas. The UGC and AICTE, as the case may be, will have power
to call for information and clarifications from the committees.
While determining the fees chargeable, the committee is duty bound to
ensure that fee does not become a source of profit or commercialisation for the
institutions concerned. This approach is in conformity with the pronouncements
of the court in cases dealing with fee determination.
Fee determination
The total fee will be based on two broad categories - tuition fees and
development fees. Besides this, the management of the institutions can realise
the actual costs of boarding and mess from students, provided the costs are
deemed reasonable by the relevant committee.
Tuition fees will seek to recover the actual cost of imparting
education. While assessing a fair tuition fee, the committee will take the
following factors into account:
·
Salary and allowances including bonus, if admissible,
to teaching and non-teaching employees
·
Expenditure on administrative services
·
Cost of maintenance of laboratories including
consumables
·
Contingent expenditure including statutory
requirements like audit fee etc.
·
Cost of acquisition of books and journals for
libraries
·
Maintenance of buildings and other assets including
rents and tariffs
The UGC and AICTE will forthwith prepare norms relating to staffing and
scale of expenditure for other items, wherever such norms have not so far been
worked out, to the extent feasible. In case it is difficult to lay down
specific quantified norms, the relevant committee will satisfy itself about the
adequacy and reasonableness of the expenditure involved, and will ensure that
the figures are not inflated.
As the policy prohibits commercialisation and profit making, the
institutions concerned cannot claim any return on investments. This, however,
should not come in the way of the institutions in mobilising resources for
replacement and up-gradation of assets. It is also considered desirable that
the development fee could aid partial capital cost recovery for the management
(but not a return on investment) and serve as a resource for upkeep and
replacement.
Development fee may be at flat rates, determined every 3 years by the
AICTE and UGC, as the case may be. Different rates may be prescribed for
free/merit”, and ‘foreign/NRI' seat holders. These bodies can also classify
institutions in different categories for the purposes of prescribing different
slabs.
In the first 10 years, it would be open to the managements to
appropriate up to half of the proceeds of the development fee or the actual
capital cost, whichever is lower. The remaining half will have to be utilised
for up-gradation and replacements in the first 10 years, and thereafter the
entire proceeds will have to be utilised for the same purposes.
As the fee chargeable will be notified by the relevant committee, it is
the duty of the statutory body concerned to communicate the rate of development
fee to such bodies well in advance to enable the committee to suitably
incorporate such rates in its notification. The UGC/AICTE will take into
account the views and suggestions of the private institutions, the state
government and interested members of public while determining these rates.
Maintenance of fee accounts
Institutions are required to maintain two accounts - maintenance
accounts and development accounts. The proceeds of tuition fees and cost
recovery of boarding etc will be credited to the maintenance account. This
account will be maintained in two parts - (a) pay and allowance and (b) other
expenditure. All recurring expenditure will be met from this accounts and
brought to account under these two parts.
At least half the proceeds of development fee will be credited to the
development account in the first 10 years, after which this account will
receive the entire proceeds of this fee. Miscellaneous receipts of the
institution would also be credited to the same account. The proceeds of this
fee would be utilised for procurement of equipments, books and journals and
acquisition of assets. It will be open to the management to debit expenditure on
improvement of faculty also to this account.
The regulations of UGC and the AICTE will provide for audit of accounts
of the relevant institutions to ensure that the financial management conforms
to the broad framework of these guidelines and regulations.
Other procedural matters concerned with levy of fee
Fee once fixed will be valid for a period of 3 years, and will be
payable in advance for a semester. Every December, each committee will specify
the total fees payable per semester for the next year in two newspapers having
wide circulation in the state concerned. This exercise should be carried out
annually despite the fact that the rates once fixed will be in force for 3
years.
Institutions which levy fees at rates higher than those fixed, or fail
to maintain accounts in the required manner, or are otherwise found to
contravene the provisions of the appropriate regulations, are liable to have
their permission/affiliation cancelled.
