Govt warns institutes against tying up with edtech firms for distance courses

The University Grants Commission on Sunday warned universities across the country that it was against the law for edtech firms to offer courses on institutions’ behalf. 

“The UGC (Open and Distance Learning Programmes and Online Programmes) Regulations mandate that (Higher Education Institutions) shall not offer (Online Distance Learning) and/or Online programme(s) under any franchise arrangement and the HEIs themselves are completely responsible for the programme(s),” UGC Secretary Rajnish Jain cautioned in a letter to all colleges in India.

“[I]t has come to the notice of UGC recently that some EdTech companies are giving advertisements in newspaper / social media/television etc. that they are offering degree and diploma programmes in ODL/Online modes in association with some universities/institutions recognized/entitled by the UGC,” Jain wrote. 

It is unclear what edtech companies the UGC is referring to, or the universities that they have tied up with. Entrackr has filed a request with the UGC for a copy of the ads that were brought to their notice, and will get back with more details if we receive them.

Edtech firms move to self-regulate

Pressure is beginning to build up on the government to evaluate the impact of the edtech ecosystem, which has hurriedly moved to self-regulate along the lines of streaming services and social media companies in an apparent effort to forestall regulatory scrutiny. In December, the government put out an advisory warning students and parents to reconsider buying material from edtech companies, and to not “blindly trust the advertisements of the ed-tech companies.”

The India edtech Consortium, which is spearheading this industry effort, is reportedly composed of firms like Byju’s, Unacademy, and Eruditus. Per a MediaNama report, a second tier will hear appeals on complaints from customers of these firms, and this body will have a retired judge and an IAS officer, following the template of similar appeal bodies in place for OTT streaming services and social media companies. A code of conduct is also reportedly in the works, but no details have been made public yet.

The firms should worry, as government scrutiny can lead to wide-ranging consequences — as a part of a crackdown on technology companies, China last year mandated edtech firms to operate on a non-profit basis; in India, while no such clampdown has been mandated, pushback could start at state level against firms, especially in the K-12 category, if judged necessary.

This self-regulation push comes even as the edtech sector has grown to become a multi billion dollar business, fueled in part by school shutdowns that made online learning resources more popular, and an influx in funding — as our data-tracking platform Fintrackr shows, of 250 acquisitions by startups in 2021, the edtech sector, and Byju’s in particular, led the pack in terms of announced spending: the firm appears to have splurged over $2.5 billion last year, including in buying Aakash Educational Services, one of India’s biggest coaching center chains for competitive examinations.

At Entrackr, we have stressed earlier too that post the unexpected windfall in the form of the Covid inspired shift to online learning aside, the real test for many edtech firms will come when schools and colleges open full time. There is bound to be a pushback against edtech firms, and  it remains to be seen if the ‘cooperation’ seen in recent years sustains. 

A key issue might be the lucrative executive education segment, which has seen a major push by edtech firms like Upgrad, Eruditus and more. This is an area where tie-ups with UGC/AICTE affiliated universities is most visible, and as long as these are kept outside the ambit of the ‘ban’ edtechs will breathe easy.