Private schools can no longer increase fees by more than 5% annually: CM Bhagwant Singh Mann
CHANDIGARH, 3rd June 2026: In a landmark move aimed at ending arbitrary fee hikes by private schools and providing long-awaited relief to lakhs of families across Punjab, the Bhagwant Mann Government has announced a sweeping regulatory framework that caps annual fee increases at 5%, mandates refunds of excess fees collected from parents wherever schools breached the annual limit during the last three years, and prescribes stringent penalties that can ultimately lead to cancellation of a school’s recognition.
Chief Minister Bhagwant Singh Mann announced that the Punjab Government will introduce the proposed legislation—described as the country’s toughest law against arbitrary fee hikes by private schools—in the upcoming Assembly session. The law will apply to all private schools across Punjab. Significantly, the 5% ceiling will cover not only tuition fees but all mandatory charges and funds collected by schools, closing avenues that institutions have often used to burden parents with additional costs. CM Bhagwant Singh Mann said that the previous Congress government’s 2019 amendments enabled unchecked fee hikes by private schools. He asserted that the new law will restore accountability in the education sector, protect parents from exploitation, and permanently stop the harassment of children and families over school fees.
arbitrary fee hikes : School Fees Refund! Punjab Govt’s Big Order
Taking to X, CM Bhagwant Singh Mann stated: “After the tragic incident in Amritsar, I have received hundreds of calls from parents over the past 24 hours regarding arbitrary fee hikes by private schools. Considering the future of our children and the immense distress being faced by parents, your Government has taken a very important and stringent decision.”
Chief Minister Bhagwant Mann capped annual fee hikes in private schools at 5% and ordered schools that increased fees by more than 15% over the past three years to immediately return the excess amount to parents. To ensure the effective implementation of this decision, we will soon bring an Ordinance. The 5% cap will not apply only to tuition fees but will also cover all other mandatory funds and charges collected by schools.”
Private Schools Beware! Punjab Govt Cracks Down
“”Punjab will enforce the strictest school regulation in the country, and the government will not grant any school an exemption. we will no longer tolerate the exploitation of parents and students in the name of education,” the post concluded.
CM Mann addressed a press conference and said that the Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, currently governs the fee structure of private unaided schools. The government amended the Act in 2019.However, he noted that successive governments failed to implement the law effectively, allowing schools to impose excessive fee hikes on parents.
The Chief Minister stated, “The Punjab Government has decided to put a cap of 5% on annual fee hikes so that no school can increase fees beyond this limit. We will bring an Ordinance in this regard. Schools that have increased fees by more than 15% during the last three years will face strict action. “The original 2016 Act capped fee hikes at 8% of the previous year’s fee, but the previous government diluted this safeguard by introducing amendments.”
CM Mann Cracks Down on School Fee Hikes!
The Chief Minister stated that the 2019 amendment allowed schools to increase fees beyond the prescribed limit through a disclosure mechanism, which required schools to publicly display proposed fee hikes on notice boards, school websites, and the website of the Department of School Education before admissions commenced. Although the law required schools to disclose fee increases transparently, authorities rarely implemented these provisions.”As a result, parents continued to face unjustified and excessive fee burdens,” he added.
CM Bhagwant Singh Mann ordered officials to review all pending fee-hike complaints and take immediate action. “The Regulatory Body will keep a close watch on excessive fee hikes. It will ensure that any increase in fees is justified by actual expenditure or developmental activities and does not result in profiteering. The government will ensure that schools use funds collected from students only for approved purposes.”In cases of serious violations, schools can face penalties, withdrawal of recognition or affiliation, and orders to refund excess fees collected from students,” he said.
Ordinance will end the exploitation of students
Calling the move a historic intervention in the education sector, the Chief Minister said the Ordinance will end the exploitation of students, especially those from economically weaker sections. He stated, “This legislation will stop the exploitation of students and their families. Educational institutions must not push any child into despair by demanding exorbitant fees or adopting high-handed practices.” Punjab will have the toughest law in the country against unregulated fee hikes by private schools,” he asserted.
*How the New Fee Regulation Framework Will Impact Parents, Students and Private Schools*
The proposed Ordinance builds upon the Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, which governs fee structures in private unaided schools across Punjab. While the Act allows schools to determine their own fees, it explicitly prohibits profiteering and the collection of capitation fees. Under the original law, annual fee hikes could not exceed 8% of the previous year’s fee.In 2019, the government introduced amendments that allowed schools to raise fees beyond the prescribed limit through a disclosure mechanism. The rules required schools to publish proposed fee hikes on their notice boards, websites and the Department of School Education’s website before starting the admission process. However, according to the Punjab Government, authorities rarely enforced these provisions, allowing many institutions to increase fees without effective oversight.
annual fee hikes will be capped at 5%.
Under the new framework proposed by the Punjab Government, annual fee hikes will be capped at 5%. The government has also indicated that schools which increased fees by more than 15% during the last three years may face scrutiny and action. All pending complaints relating to excessive fee hikes are expected to be examined by the authorities.
Parents already have the legal right to challenge fee hikes before a district-level Regulatory Body. Under the existing law, complaints must be scrutinised within 15 days of receipt and decided within 60 days. The Regulatory Body enjoys powers equivalent to those of a civil court while examining cases. The body is headed by the Deputy Commissioner or Additional Deputy Commissioner of the district and includes the District Education Officer (Secondary) as Member Secretary, along with two nominated members.
Schools found violating the law face a graded penalty system
The law also grants significant oversight powers to the Regulatory Body. The committee ensures that schools keep fee structures within reasonable limits, prevents profiteering, examines excessive fee hikes, verifies whether schools justify increases through higher expenditure or development activities, and ensures that schools do not divert money collected from students to non-educational purposes.
Schools found violating the law face a graded penalty system. For a first violation, fines can range from ₹30,000 for primary schools to ₹1 lakh for senior secondary schools. Repeat violations attract higher penalties, ranging from ₹60,000 to ₹2 lakh. In cases of a third violation, authorities may withdraw a school’s recognition or affiliation in addition to imposing financial penalties. The Regulatory Body also has the power to order the refund of excess fees collected from parents.
The Punjab Government is also examining mechanisms for financial audits of private schools. One proposal under consideration involves empanelling Chartered Accountants to review schools’ financial records from the previous three to five years, including fee collections, expenditure, salaries, infrastructure investments, reserves and related-party transactions.”Such audits would enable authorities to verify whether schools justified fee hikes and properly utilized the collected funds for educational purposes.”
The government proposes this Ordinance to strengthen enforcement of these provisions, tighten oversight of private schools, increase transparency in fee fixation, and give parents a stronger mechanism to challenge arbitrary fee hikes. The Ordinance also aims to ensure that educational institutions operate without profiteering.
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