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.

During the last few months, the crisis has been reflected in the decline of economic activity, which in August registered a year-on-year variation of -8%, and in the level of unemployment, which for the quarter from June to August reached 23%, a proportion that doubled that reported for the same quarter in 2019.

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According to estimates by the Association of Private Educational Centers (ACEP), it is estimated that students who have withdrawn from private schools number between 8,800 and 10,600.

You may be interested in "Study of University Career Preferences in Central America".

Faced with the drop in student numbers, schools applied strategies to retain their customers. Beatriz Ramirez, Spokesperson for the ACEP, told 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."

See "Schools: Which Locations Show Greatest Potential?"

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 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%."

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