Punjab has capped annual private school fee hikes at 5 per cent.
Schools exceeding 15 per cent of fee hike over three years must refund parents.
All compulsory charges will be counted while calculating total school fees
Punjab has capped annual fee increases by private unaided schools at 5 per cent and ordered institutions that breached a cumulative 15 per cent limit over the past three years to refund the excess amount to parents.
The Punjab Regulation of Fee of Unaided Educational Institutions (Amendment) Ordinance, 2026, received Governor Gulab Chand Kataria’s approval after being cleared by the state Cabinet in June. Chief Minister Bhagwant Mann said it would take effect immediately and apply to around 7,800 private schools across Punjab.
“We will not allow ‘vidya mafia’ to be created,” Mann said, adding that private schools could not be allowed to become “factories for profit only”. However, the relief promised to parents will ultimately depend on audits, timely refunds and consistent enforcement.
What Does Punjab’s New Ordinance Say?
The ordinance amends Punjab’s 2016 law regulating fees charged by unaided educational institutions. Its central provision replaces the earlier 8 per cent annual ceiling with an ordinary limit of 5 per cent. The original law had empowered regulatory bodies to examine excessive fees, prevent profiteering and order refunds.
Schools must submit details of fees collected during the previous four years within 10 days through an Education Department portal. The government will scrutinise these disclosures and conduct audits to identify excessive increases or compulsory charges collected under different labels.
Mann said violations could attract fines ranging from Rs 50,000 to Rs 1 lakh. Continued non-compliance could eventually lead to the withdrawal of a school’s recognition or affiliation. The government has said alternative arrangements would be made to ensure students do not suffer if such action is taken.
Why Has The Definition Of “School Fees” Been Expanded?
The broader definition is intended to prevent schools from keeping tuition increases within the prescribed limit while collecting additional money under other names.
Under the amended framework, almost every compulsory payment can be counted as part of a school’s fee. This includes building funds, annual charges, activity fees, technology charges, laboratory and library fees, examination expenses and certain transport charges.
The original law already defined fees broadly as amounts charged “directly or indirectly”. The ordinance provides greater clarity over the individual charges that fall within that definition.
“Any mandatory payment collected from parents will be treated as fee, irrespective of whether it is shown as tuition fee, building fund, transport fee, computer fee, sports fee or under any other head,” Mann said.
Only genuine refundable security deposits that are actually returned to parents will remain outside the definition.
Who Will Get Refunds?
Parents whose children attended schools where the total fee rose by more than 15 per cent during the relevant three-year period will be entitled to receive the excess amount.
“Those private schools that have increased fees by more than 15 per cent over past three-year period will be required to refund the excess amount to parents,” Mann said.
Explaining the calculation, he added: “For example if a school increased fee by 25 per cent during past three years, then they will have to refund parents the excess 10 percent.”
The provision examines the cumulative increase instead of looking at each academic year separately. Mann said schools would not be allowed to avoid repayment by adjusting the excess collection against future fees.
The exact refund due to each family will be determined after the government examines the fee records and audits the schools concerned.
Can Schools Still Increase Fees?
Schools can raise their total fee by up to 5 per cent over the previous academic year without seeking approval. Any increase beyond that level will require prior permission from the district regulatory authority.
Mann said schools that have invested in infrastructure such as new buildings, libraries or smart classrooms may seek approval for an increase of up to 8 per cent. They would have to justify the expenditure and return to the ordinary 5 per cent limit after recovering the investment.
The regulatory authority may examine the institution’s accounts, including the finances of the trust or society managing it, before approving a higher increase. Until a decision is taken, the school must continue charging its existing fee.
Schools will also not be allowed to force parents to buy uniforms, books or other supplies from selected sellers. They may prescribe a uniform’s colour and design, but families must remain free to choose the vendor.
How Is The New Regulatory Mechanism Different?
The amended system gives district regulatory bodies a more proactive enforcement role. They can demand records, interact with parents, inspect fee collections and order forensic audits when they suspect unauthorised charges or profiteering.
The committees will also examine whether schools are complying with admission requirements for children from Economically Weaker Sections. Schools must publicly disclose their fee structures and communicate revisions to parents before the academic session begins.
The biggest change is therefore not merely the lower 5 per cent cap. The ordinance combines retrospective refunds, wider fee coverage, advance scrutiny, stronger auditing powers and tougher penalties.
