Caixin
Jan 20, 2021 05:57 AM
BUSINESS & TECH

China’s Education Ministry Weighs Tightening Supervision of Tutoring Sector

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What’s new: China’s Ministry of Education will work with related government departments to strengthen supervision of tutoring institutions after the collapse of several tutoring companies left thousands of employees jobless and due back wages with students and parents seeking refunds of prepaid tuition.

Some online tutoring companies were recently summoned to a meeting with government agencies in Beijing, Caixin learned. Among the regulators’ concerns are huge advertising spending and misappropriation of prepaid tuition by tutoring companies.

The education administrative department has no right to supervise tutoring companies’ use of funds and cannot make effective judgments of their operating conditions, an official at the Ministry of Education said. It will be too late for relevant departments to intervene after the collapse of these companies, the official said.

A district of Beijing last week rolled out a platform for consumers to monitor their prepaid tuition to tutoring companies. A first batch of 51 extracurricular tutoring companies are included in the platform. Once a tutoring company has any abnormal fund activities, consumers will receive alerts. Several local governments in other cities have taken similar monitoring measures.

The background: China’s online education sector has boomed in recent years, seizing on a culture that places strong emphasis on education, especially for the young. The rapid development of online technologies helped companies to get up and running quickly and attract sizable student bodies. But the easy entry resulted in stiff competition that left most of the newer arrivals losing money.

Xueba100.com, an eight-year-old tutoring company, ran out of money and ceased most operations Jan. 1 after failing to raise funds from investors. This came just two months after another private tutoring company, Youwin Education, similarly crumbled, prompting hundreds of parents to turn up at the company’s Beijing headquarters to demand their money back.

At a national education work conference earlier this month, the Ministry of Education proposed to make great efforts to regulate and rectify after-school training institutions and formulate a governance plan as soon as possible.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

Related: Zhang Kailei Wants to Give Away His Tutoring Company

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