Central Govt Cautions Parents Against Ed-Tech Companies


In the absence of a regulatory body, ed-tech startups have been mushrooming in India, particularly in the last two years of the pandemic.

As the pandemic disrupted the traditional brick-and-mortar education, the ed-tech startups rushed to help schools transition from offline to online.

However, there have been various claims made by the students and parents about the companies’ duping people with “free services”, and even lack of refunds and deficiency of services; and parents being pushed into a debt burden.

“It has come to the notice of the Department of School Education and Literacy that some ed-tech companies are luring parents in the garb of offering free services and getting the Electronic Fund Transfer (EFT) mandate signed or activating the Auto-debit feature, especially targeting the vulnerable families,” the Ministry of Human Resource Development stated in a notification on Thursday.

“The parents, students and all stakeholders in school education have to be careful while deciding on opting for online content and coaching being offered by a host of ed-tech companies,” the HRD ministry said.

According to KPMG, there are more than 3,500 ed-tech startups in India today.

India’s ed-tech sector is poised to become a $30 billion industry in the next 10 years, according to RBSA Advisor, a transaction advisory firm. According to the report, vigorous growth will drive the growth in the K-12 ed-tech opportunity in the user base.

Earlier this month, a report filed by the BBC questioned ed-tech unicorn BYJU’s glorious run in India. The world’s highest-valued ed-tech start-up has more than six million paying users, and a 85 per cent renewal rate.

The BBC spoke to many parents, according to whom the ed-tech giant’s promised services never materialised. This includes its one-on-one tutoring and mentoring. The hard sales tactics employed by the company gave rise to parents’ insecurities, and added to their debt burden, the report said. However, the company denied the allegations.

Reports have also shown that since the lockdown, BYJU’s added over 33 million users to its platform to touch the 75 million-mark, while Unacademy’s user base tripled to 40 million users by January 2021. In the first nine months of FY 2020-2021, UpGrad, a platform providing online courses for upskilling, grew 100 per cent in terms of number of users.

Some ed-tech companies also offer the free-premium business model where a lot of services seem free at first, but to gain continuous learning access, students have to opt for a paid subscription. The HRD ministry advised parents to avoid automatic debit option for payment of subscription fee as it may result in a child accessing the paid features without realising that he/she is no longer accessing the free services.

The ministry also issued a slew of other advisories for the parents, which include: “asking for a tax invoice statement for the purchase of educational devices; a detailed background check of the ed-tech company; verifying the quality of the content provided by the ed-tech companies and making sure that it is in line with the syllabus; activating parental controls and safety features”.

Further the ministry also cautioned the parents to “not blindly trust the advertisements of the ed-tech companies; not sign up for any loans of which you are not aware; not install any mobile ed-tech applications without verifying the authenticity; avoid adding your data like emails, contact numbers, card details, addresses etc. online; not share any personal videos and photos”.

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