The dream of higher education in professional programs – engineering, medicine, business administration, pharmacy, nursing etc – was made easier in Telangana by the State Government’s Fee Reimbursement Scheme (FRS). The aim of the initiative first started in the undivided Andhra Pradesh in 2008, is to support students from Scheduled Castes, Scheduled Tribes and Backward Classes to pursue a professional career by supporting their fees.

Professional Courses in Private Colleges

This became necessary as private colleges were encouraged to teach professional courses in the 1980s. By 2009-10, the fee structure even for the so-called “free (government) seats”, which were cheaper, was ₹ 27,000 per annum. Fees for the management quota were three times that amount, making it hard for students from poor families to study professional courses. Technically, under this system, colleges first collect tuition fees from students, who then submit to the government for reimbursement. However, the positions are reversed here. Colleges are forced to accept students without charging them because the government has promised to reimburse them later.

With caste-based reservations constituting 50-60% of the total student intake, engineering institutions (particularly autonomous and affiliated) end up expecting 40-60% of their revenue from the government via the FRS. The revenue generated through the direct collection of tuition fees from general category students is only 50-60% of the total expected revenue.

Details of Reimbursement:

SC and ST Category Students    –  100%

Minority Category & PHC Students –  100%

OBC Category Students – Fixed Amount as Decided by TFRC

EBC Category Students  – Fixed Amount as Decided by TFRC       

General (OC) & Management Quota Students –   NIL                            

Eligibility Criteria: As per the brochure from TS Education Dept

In recent years, however, delays in these payments have put a severe financial burden on private and unaided colleges. Regular operations of these colleges have been affected, and discontent has been rising among both educators and students.

Dark Side of the FRS

The combination of both the caste-based reservations and the fee reimbursement policies, although a boon to students, has become a curse to these professional institutions. Together, both policies have forced all autonomous and affiliated engineering institutions to depend on government scholarships for 40-60% of their overall revenue. 

Engineering institutions in Telangana have been struggling financially for over a decade due to significant delays in the disbursement of fee reimbursements from the government. The release of fee reimbursement dues by the government is often delayed by 3-4 years without any assurance of timely disbursal.

Forced to operate at significantly lower budgets, most institutions merely end up using all their revenue for staff payroll without any investment in infrastructure, technology, research, and development. In a lot of cases, institutions are struggling to even pay faculty salaries for a few months when they run out of direct collections from tuition fees from students. More than Rs. 6,500 Cr, over the last 4 years, is still unpaid to private engineering institutions in the state today.  

In recent years, however, the government has not released funds under the program as planned, instead making small installments. Changes in government reimbursement guidelines have put students and private institutions in a deep financial crisis. At least 75 colleges are up for sale, including 50 in and surroundings of Hyderabad. “The government policies that encourage Higher education through a fee- reimbursement system left hundreds of corporate institutions in the red”. Salaries had to be withheld, which forced many of these colleges to announce their willingness to accept students who did not even pass the entrance exam.

The curse of the fee reimbursements has therefore led to little or no growth among the majority of the private engineering institutions in Telangana as measured by their presence in the top 100 NIRF ranks. In the 2024 ranking, no private engineering college in Telangana was ranked amongst the top 100 in India with only one private university ranked 98th in the country. 

All such engineering institutions will see the light at the end of the tunnel only when they transform themselves into universities. The caste-based reservations and the government fee reimbursements currently do not apply to private universities thereby allowing them full control over their revenue and finances. As per the vision of NEP 2020, the UGC has opened up opportunities for affiliated institutions to evolve into autonomous institutions and later universities. Eligibility for transformation to universities requires institutions to showcase quality standards (as per NAAC and NBA accreditation norms) for over a decade.

However, there is a serious threat to the survival of the majority of the affiliated and autonomous colleges as they compete with the growing number of newly established private state universities.

Impact on Quality of Education

College authorities have already hired educational consulting firms and private agents to help students gain admission to colleges by providing them with numerous tools for example free transportation, free laptops, and subsidized dormitory facilities.

The financial burden on the Ministry of Finance is increasing year by year as the number of institutions increases as well as most students take advantage of the government’s tuition reimbursement scheme. More than 80 percent of enrolled students claim the fee-reimbursement.

Business leaders use consultants and brokers to fill college seats, paying approximately Rs.10,000 to 20,000 each applicant. The students who do not have interest to pursue higher education, these agents force them to enroll in colleges. Additionally, students do not have to pay any enrollment fees, so they receive a token amount to enroll in college regardless of whether they enroll. In most cases, these compulsory enrollments account for approximately 20-30 percent of total enrollment.

A senior government official at the Ministry of Higher Education said many institutions suffer from low standards. Many colleges have become degree production centers rather than knowledge centers. It is also true that only a few institutions in the country meet all criteria in terms of infrastructure, laboratories, libraries, and efficient and regular faculty.

The Way Forward

The Government of Telangana need to consider itself to be at a crucial juncture for engineering education in Telangana, as it will be witnessing the slow death of private engineering colleges and the dominance of state and deemed-to-be private universities. This paradigm shift will completely undo all the benefits of the caste-based reservation and fee reimbursement policies over the last decade in increasing access to engineering education for students from marginalized and low socioeconomic communities.

The government’s recognition and support of these institutions is absolutely critical through thoughtful restructuring of the implementation of FRS.

Three strategies are required to solve the problem

• First one would be, in place of spending millions of amounts on Higher education in the form of fee-reimbursement for vulnerable classes, this amount would have been diverted to all segments of the people by establishing high quality primary and secondary schools across the state. The cause is that the quality of higher education eventually depends on the quality of primary and secondary education.
• Second, specific national and international standard bodies should be established within the framework of public-private partnerships to strengthen higher education.
• To achieve better inclusion in higher education, only eligible students below the poverty line are given the opportunity to receive free education at these institutions.

Alternatively as some studies indicate better employment opportunities received by the students who were beneficiaries of FRS, the following may be suggested:

• Part of the fee (25-50%) may be paid by the parents and may be returned upon refund by the Government.
• The fee amount may be treated as an interest-free loan to the student and will be repaid one or two years after completion of the course. To facilitate / monitor the payment and repayment of the fee amount, an independent agency may be assigned. This is in practice in some states Bihar, Kerala etc.
• The whole process may be tagged to the CSR funds of industries, especially Public Sector Undertakings (PSUs).
• Government of India is allowing students to take bank loans from scheduled banks at an annual rate of around 4%. If the State Government acts as a collateral / guarantor and pay interest amount annually, the candidate will have to pay after completion of the course.
• As recommended by the Professional Colleges Managements Associations, let the student / parent pay the fee to the institution (may be in installments) and the reimbursement be made directly to the student / parent through bank.

The FRS as part of the heritage that the new Telangana has inherited. But it was not without the disappointment that came with it. Timely disbursal of the student scholarships will give impetus to the financial stability and therefore growth of engineering institutions in Telangana. It’s never too late to hope for collaborative efforts between the government and engineering institutions to position Telangana as one of the best destinations in India for high-quality education

Dr. A. Raghuram Rao

Life Member, FGG” (Views are personal)