The Dubai Executive Council has issued a decision to cap school fees by five to seven per cent, depending on the school’s performance, state news agency WAM reported.
According to the new mandate, the annual increase in tuition fees should not exceed seven per cent for schools rated ‘outstanding’ by Dubai’s education watchdog Knowledge and Human Development Authority (KHDA).
Schools rated as ‘good’ would be allowed to hike fees by six per cent while those graded as ‘acceptable and ‘unsatisfactory’ would be permitted a five per cent increase in fees.
The schools will not be allowed to raise the fees if the cost of education index, which is measured by the operating expenses of schools, is zero or negative, the council said.
The fee cap has been introduced to curb unjustified increase in school fees and to provide competitive rates of profitability in the emirate’s education sector, officials said.
It will allow the current private schools to be profitable and sustainable while helping them to attract new investors, the council added.
The fee cap is also expected to curb the general inflation rate in Dubai, as it will control the inflation in the emirate’s education sector, the statement said.
A rising population has created a demand for schools in the emirate and in the UAE, adding to the rate of inflation.
According to a HSBC survey released last year, the majority of expats polled said that the cost of education is higher in the UAE than their country of origin.
The UAE is also one of the fastest growing private education markets in the world with a value of $1.9 billion in 2012.
Dubai’s largest schools operator GEMS Education recently announced plans to build six schools a year to take advantage of the UAE’s booming private education industry.