The Impact of the Crisis on the Education Business
Due to the economic crisis generated by the covid-19 outbreak, it is estimated that between 10% and 12% of students in private institutions in Costa Rica have stopped demanding the services, and tuition fees have gone down.
Wednesday, October 21, 2020
When the first cases were detected in the country in March, the authorities began to decree restrictions on mobility and productive activities, a situation that generated a severe economic crisis.
In this scenario, several school clients have not been able to continue paying their monthly fees and have opted to withdraw. According to estimates by the Association of Private Educational Centers (ACEP), it is estimated that students who have withdrawn from private schools number between 8,800 and 10,600.
Faced with the drop in student numbers, schools applied strategies to retain their customers. Beatriz Ramirez, Spokesperson for the ACEP, told Nacion.com that in many cases they gave "... discounts that generally reached the population of affected households for up to 5 months and, subsequently, according to the needs of each one and the activities they were carrying out and the level of affectation."
The drop in tuition fees was evident in the Consumer Price Index, since in August the "Education" expenditure division registered a -4% variation. The publication Nacion.com details that "... the INEC determined that, in August, the average cost of primary education fell 8% with respect to July, that of secondary education, 7.65%, and that of preschool, 9.66%."
Strengthening the confidence of economic agents through a solution to the problem of public finances and moving forward with the process of vaccinating the population are key factors for the Costa Rican economy to recover quickly in the new year.
The spread of covid-19 and the restrictions imposed at the local and global levels severely affected most of Costa Rica's productive sectors, to the extent that the unemployment rate climbed to historical levels, several businesses were closed and economic activity fell sharply.
The health and economic crisis has forced private schools and universities in Central American countries to cut back on staff, invest in platforms for virtual classes, offer payment facilities and increase their presence in the digital environment.
Because of the spread of covid-19, in most countries in the region, face-to-face classes at all educational levels have been suspended since mid-March 2020.
When the local economy begins to return to the new normality, as isolation and mobility restrictions are relaxed, it is estimated that the demand for electricity by Honduran households will have decreased by 11%.
Using a demand/income sensitivity model developed by the Trade Intelligence Unit of CentralAmericaData, it is possible to project the variations in demand by Honduran households for different goods and services as the most critical phases of the spread of covid-19 are overcome and the measures restricting mobility in the country are lifted.
Tuition and enrollment fees of 43 private educational institutions teaching Pre-school, Primary, PreMiddle and Middle (Bachelor).
The Authority for Consumer Protection and Antitrust, ACODECO, has carried out a non-probability sampling trial, which is based on a list of 43 private colleges who were sent note to invite them to participate in a survey which is carried out annually on registration and tuition fees of private schools in the City of Panama.