In Depth: How an Acclaimed Education Experiment in Beijing Ended Up on the Brink

[para. 1] The newly renovated ETU Enlighten School campus in Beijing presents a lively scene on the outside, with children playing, but is battling a significant financial crisis internally. Teachers have gone months without pay, the cofounder is banned from the school, and what was once a leading private education experiment in China faces collapse.

[para. 2][para. 3][para. 4] ETU is a private K-12 school that emerged from a merger this year between ETU School and Centennial Enlighten Bilingual School, reflecting aspirations captured in slogans about cultivating joyful, engaged students. The founders, Li Yinuo and Shen Huazhang, established ETU School nine years ago, inspired by their US educational experiences. Their mission was holistic, student-oriented education, appealing to parents dissatisfied with China’s exam-driven public system. Over time, tuition rose from 150,000 yuan ($21,000) to 188,000 yuan per year.

[para. 5][para. 6][para. 7] In November, ETU’s financial problems became public. Founder Li admitted the school had little cash left since October and could not pay salaries or suppliers. Shen, handling operations, was banned from campus by the merger partner. Though Li managed to raise some funds via livestreaming and loans, many questioned both her commitment—she lives abroad—and the underlying causes of the cash crunch, especially after years of high tuition and multiple investment rounds.

[para. 8][para. 9][para. 10][para. 11] Both Li and Shen had strong professional backgrounds before founding ETU, with successful social media ventures and experience in consulting, philanthropy, and tech. ETU School’s founding in 2016 resonated widely, rapidly attracting students and investment. The period also coincided with governmental encouragement for private schools and a global boom in innovative educational models, including references to AltSchool, an American tech education startup that inspired ETU.

[para. 12][para. 13][para. 14][para. 15] The school benefited from China’s push towards private education and rising demand, securing multimillion-dollar investments. The founders maintained clear roles: Li as visionary and Shen overseeing technology. Shen’s earlier entrepreneurial efforts included developing a proprietary educational app for ETU, in hopes of creating a scalable technological platform.

[para. 16][para. 17] However, new Chinese regulations in 2016 and 2017 required compulsory education (grades 1–9) to be non-profit, transforming the business models of private schools. Thus, the financial incentives lay in high schools or auxiliary businesses, as was pursued by both ETU and Enlighten School.

[para. 18][para. 19][para. 20][para. 21][para. 22][para. 23] ETU struggled with operational hurdles: finding licensed and adequate campuses, frequent moves, and adapting to regulatory changes. Notably, partnerships for campus space, such as with BISS International School, brought temporary stability but also costs and new complications. The regulatory crackdown in 2021 nearly eliminated for-profit compulsory education, causing investor flight. This coincided with Li’s gradual withdrawal from daily management and physical absence from China (moving to the US and later Japan), and Shen taking over.

[para. 24][para. 25][para. 26][para. 27][para. 28] By 2024, seeking stability, ETU merged with Enlighten School, hoping to benefit from Enlighten's licenses and facilities. The merger, supported by 100 million yuan from two parent-investors, fell apart within a year amid ongoing financial problems.

[para. 29][para. 30][para. 31][para. 32][para. 33] The crisis revealed deep fiscal troubles, as large investments in technology, campus relocation, and the financial obligations of partnerships, including a 42 million yuan parent investment and covering legacy debts of partners, drained resources. Drops in enrollment post-merger, management instability, and parent-investor disputes further undermined finances. Allegations emerged of misuse of school funds for loans and debt repayment, leaving staff and parents unclear about where tuition revenue—estimated between 60 million and 100 million yuan—had gone.

[para. 34][para. 35][para. 36] Internal disagreements, shifting business models, and unfulfilled ambitions contributed to the school’s unstable trajectory. Despite grand visions, the founders consistently faced sobering financial and regulatory realities, ultimately leaving the school’s future—and that of its students and teachers—hanging in the balance.