KATHMANDU: The government of Nepal views school-level education as a universal public good, in line with the nation as a multiethnic, multilingual, and welfare-oriented socialist state. Nepal’s constitution also declares that all students must receive free basic education (grades 1–8) and free secondary education (grades 9–12).

However, in reality, there is a stark mismatch between constitutional ideals and the actual delivery of education in both private and public institutions. Inefficiency, weak accountability, and deteriorating academic performance of students plague public schools in Nepal.

On the other hand, private educational institutions in Nepal function with a competitive market logic, where they derive their existential legitimacy from performance indicators such as quality outcomes, parental satisfaction, cost-benefit calculations, and perceived returns on investment.

From their perspective, it is a natural feature of a competitive education market, where students and parents consciously pay for better facilities, teaching, and future prospects for their children. Hence, the coexistence of public and private schools reflects two competing logics in school-level education in Nepal.

Furthermore, a fragmented school-level system has been brought about in Nepal by the dual realities of a somewhat competent private sector that offers exclusive educational services to those who can afford them and public schools that claim egalitarian values yet are inadequate in different quality standards.

And, to bridge the gap over his fragmentation and to reform school-level education from the perspective of inclusivity, egalitarianism, and rights-based access, the government of Nepal has proposed the School Education Bill, currently under parliamentary approval.

Nonetheless, a number of significant proposals in the School Education Bill, which is presently being discussed in the Federal Parliament, have sparked intense discussions and demonstrations. The most contentious is the mandate that private schools, particularly those registered under the Company Act, must gradually transition into non-profit entities.

Challenges of ‘not-for-profit’ policy for private schools in Nepal

Predominately, the commercialization of school-level education in Nepal has been framed within the class division that segregates children based on the ability of their family to afford premium education in private schools. This has led to a major policy proposal to convert all private schools into ‘not-for-profit’ entities registered under a trust model. The not-for-profit model in school education seeks to re-establish education as a public service rather than a business. While the intent is to promote equity and inclusiveness, private school operators argue that the inability to legally declare and distribute profits significantly impacts the financial viability of private educational ventures, and such a rule could eventually hinder their ability to attract investment, innovate, expand, and offer competitive salaries to teachers.

Similarly, as institutions are legally restricted from generating and distributing profits, private schools will find it difficult to secure sufficient funds from banks and other financial institutions for upgrading their essential resources such as modern infrastructure, well-equipped laboratories, libraries, and advanced teaching materials.

Again, the risk there is that these private schools may collect high donations and charge development fees for their large-scale infrastructure development or expansion.

Comparably, this policy favors well-established private schools that have already accumulated assets over aspiring institutions that require private investments in their initial setup and growth phases.

In India the legal framework mandates private schools to operate on a ‘not-for-profit’ basis. India’s Right to Education (RTE) Act, 2009, makes it mandatory for private schools to reserve 25% of their seats for children from marginalized and disadvantaged groups.

However, within this legal mechanism, private schools in India have found various ways to make exorbitant profits through opaque financial practices. Since private schools in Nepal have a stronger market share than in India, they would also explore various policy loopholes and find different ways around, over, and under the not-for-profit directive to re-commercialize the school-level education regardless of the legal status of their schools.

Why simply changing the legal status of a private school is not enough?

A top-down policy that mandates a fundamental shift in institutional identity from a company to a non-profit trust merely redirects, rather than resolves, the chronic inefficiency of the public school system in Nepal. Hence, the success of the not-for-profit rule aimed at educational reform for inclusive and equitable school-level education invariably hinges on a simultaneous, aggressive, and effective strengthening of the public school. Rather than simply imposing policy over private schools, the government needs to invest sufficiently in public schools for better infrastructure, improved teacher management, and a robust monitoring framework to ensure all schools, regardless of their ownership model, provide equitable, inclusive, and quality education to their students.

In conclusion, for the not-for-profit rule to be effective in the Nepali context, it must be part of a broader and well-enforced policy that not only effectively regulates the private schools but also significantly increases public investment, reforms teacher management, and improves the overall educational quality of community schools.

Here, it is important for all the stakeholders of school-level education to realize that deep-rooted disparities within the dual school-level education system in Nepal have so far failed to guarantee high-quality education for all of its students. However, the solution to this issue is not as simple as altering the legal status of private schools.

The solution requires a comprehensive strategy that balances private investment with the public-service mission of schools and encourages the growth of high-quality educational institutions in Nepal.

Besides, the government needs to shift their approach from confrontation to effective public-private collaborations where both private and public schools can assist each other with essential educational resources, teacher training, curriculum design, operational services, and infrastructure development. In addition, the government can adopt an incentive-based approach that offers significant tax benefits, grants, and preferential funding to private institutions that voluntarily transition to a non-profit model.